SOHU.COM REPORTS SECOND QUARTER 2025 UNAUDITED FINANCIAL RESULTS
Second Q uarter Highlights
- Total revenues were
US$126 million , down 27% year-over-year and 7% quarter-over-quarter. - Marketing services revenues were US$16 million, down 21% year-over-year and up 14% quarter-over-quarter.
- Online game revenues were US$106 million, down 28% year-over-year and 10% quarter-over-quarter.
- GAAP net loss attributable to
Sohu.com Limited wasUS$20 million , compared with a net loss of US$38 million in the second quarter of 2024 and net income[1] ofUS$182 million in the first quarter of 2025. - Non-GAAP[2] net loss attributable to
Sohu.com Limited wasUS$20 million , compared with a net loss of US$34 million in the second quarter of 2024 and a net loss ofUS$16 million in the first quarter of 2025.
Dr.
|
[1] In the first quarter of 2025, due to the expiration during the quarter of the statutory period for the |
|
[2] Non-GAAP results exclude share-based compensation expense; changes in fair value recognized in the Company's consolidated statements of operations with respect to the Company's investments; and the income tax benefit in connection with the Toll Charge and related accrued interest expense. Explanation of the Company's non-GAAP financial measures and related reconciliations to GAAP financial measures are included in the accompanying "Non-GAAP Disclosure" and "Reconciliations of Non-GAAP Results of Operation Measures to the Nearest Comparable GAAP Measures." |
Second Quarter Financial Results
Revenues
Total revenues were
Marketing services revenues were US$16 million, down 21% year-over-year and up 14% quarter-over-quarter.
Online game revenues were US$106 million, down 28% year-over-year and 10% quarter-over-quarter.
Gross Margin
Both GAAP and non-GAAP gross margin were 78%, compared with 67% in the second quarter of 2024 and 76% in the first quarter of 2025.
Both GAAP and non-GAAP gross margin for the marketing services business were 17%, compared with 20% in the second quarter of 2024 and 10% in the first quarter of 2025.
Both GAAP and non-GAAP gross margin for online games were 86%, compared with 76% in the second quarter of 2024 and 85% in the first quarter of 2025.
Operating Expenses
Both GAAP and non-GAAP operating expenses were US$120 million, down 25% year-over-year and 1% quarter-over-quarter.
Operating Loss
GAAP operating loss was US$22 million, compared with an operating loss of
Non-GAAP operating loss was US$22 million, compared with an operating loss of
Income Tax Expense/(Benefit)
GAAP income tax expense was US$9 million, compared with income tax expense of
Non-GAAP income tax expense was
Net Income/(Loss)
GAAP net loss attributable to
Non-GAAP net loss attributable to
Liquidity and Capital Resources
As of
Supplementary Information for Changyou Results [3]
Second Quarter 2025 Operating Results
- For PC games, total average monthly active user accounts[4] (MAU) were 2.3 million, an increase of 6% year-over-year and flat quarter-over-quarter. Total quarterly aggregate active paying accounts[5] (APA) were 0.9 million, an increase of 8% year-over-year and a decrease of 3% quarter-over-quarter. The year-over-year increases in MAU and APA were mainly due to the improved performance of some of our older games, including
Tian Long Ba Bu ("TLBB") PC, resulting from content updates and optimization launched during recent quarters. - For mobile games, total average MAU were 1.9 million, a decrease of 60% year-over-year and 9% quarter-over-quarter. Total quarterly APA were 0.3 million, a decrease of 72% year-over-year and 9% quarter-over-quarter. The year-over-year decreases in MAU and APA were mainly due to the natural decline of New Westward Journey, which was launched in the Chinese mainland market during the second quarter of 2024. The quarter-over-quarter decreases were mainly due to the natural decline of Journey Renewed: Fate Fantasy, the international version of New Westward Journey, which was launched during the fourth quarter of 2024.
|
[3] "Changyou Results" consist of the results of Changyou's online games business and its 17173.com Website. |
|
[4] Monthly active user accounts refers to the number of registered accounts that are logged in to these games at least once during the month. |
|
[5] Quarterly aggregate active paying accounts refers to the number of accounts from which game points are utilized at least once during the quarter. |
Second Quarter 2025 Unaudited Financial Results
Total revenues were
Both GAAP and non-GAAP gross profit were
GAAP operating expenses were
Non-GAAP operating expenses were
GAAP operating profit was
Non-GAAP operating profit was
Under the previously-announced share repurchase program of up to
Business Outlook
For the third quarter of 2025, Sohu estimates:
- Marketing services revenues to be between
US$14 million andUS$15 million ; this implies an annual decrease of 20% to 25%, and a sequential decrease of 4% to 10%. - Online game revenues to be between US$107 million and US$117 million; this implies an annual decrease of 8% to 16%, and a sequential increase of 1% to 10%.
- Both non-GAAP and GAAP net loss attributable to
Sohu.com Limited to be between US$25 million and US$35 million.
For the third quarter 2025 guidance, the Company has adopted a presumed exchange rate of
This forecast reflects Sohu's management's current and preliminary view, which is subject to substantial uncertainty.
Non-GAAP Disclosure
To supplement the unaudited consolidated financial statements presented in accordance with accounting principles generally accepted in
Sohu's management believes excluding share-based compensation expense; changes in fair value recognized in the Company's consolidated statements of operations with respect to the Company's investments; and the income tax benefit in connection with the Toll Charge and related accrued interest expense from the Company's non-GAAP financial measures is useful for itself and investors. Further, the impact of share-based compensation expense; changes in fair value recognized in the Company's consolidated statements of operations with respect to the Company's investments; and the income tax benefit in connection with the Toll Charge and related accrued interest expense could not be anticipated by management and business line leaders and these expenses were not built into the annual budgets and quarterly forecasts that have been the basis for information Sohu provides to analysts and investors as guidance for future operating performance. As share-based compensation expense, and changes in fair value recognized in the Company's consolidated statements of operations with respect to the Company's investments do not involve subsequent cash outflow or are reflected in the cash flows at the equity transaction level, Sohu does not factor in their impact when evaluating and approving expenditures or when determining the allocation of its resources to its business segments. As a result, in general, the monthly financial results for internal reporting and any performance measures for commissions and bonuses are based on non-GAAP financial measures that exclude share-based compensation expense and changes in fair value recognized in the Company's consolidated statements of operations with respect to the Company's investments, and also exclude the income tax benefit in connection with the Toll Charge and related accrued interest expense.
The non-GAAP financial measures are provided to enhance investors' overall understanding of Sohu's current financial performance and prospects for the future. A limitation of using non-GAAP gross profit, operating profit/(loss), net income/(loss), net income/(loss) attributable to
Notes to Financial Information
Financial information in this press release other than the information indicated as being non-GAAP is derived from Sohu's unaudited financial statements prepared in accordance with GAAP.
Safe Harbor Statement
This announcement contains forward-looking statements. It is currently expected that the Business Outlook will not be updated until release of Sohu's next quarterly earnings announcement; however, Sohu reserves right to update its Business Outlook at any time for any reason. Statements that are not historical facts, including statements about Sohu's beliefs and expectations, are forward-looking statements. These statements are based on current plans, estimates and projections, and therefore you should not place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, instability in global financial and credit markets and its potential impact on the Chinese economy; exchange rate fluctuations, including their potential impact on the Chinese economy and on Sohu's reported
Conference Call and Webcast
Sohu's management team will host a conference call at
The live Webcast and archive of the conference call will be available on the Investor Relations section of Sohu's website at https://investors.sohu.com/.
About Sohu
As a mainstream media platform with social features, Sohu is indispensable to the daily life of millions of Chinese, providing to a vast number of users a network of web properties and community based products, which offer a broad array of content such as news, information, text, picture, video, and live broadcasting. Sohu also attracts users to be highly engaged in content generation and distribution, and actively interact with each other on the platform. Sohu's online games business is conducted by its subsidiary Changyou which develops and operates a diverse portfolio of PC and mobile games, such as the well-known TLBB PC and Legacy TLBB Mobile.
For investor and media inquiries, please contact:
In
Ms.
Tel: +86 (10) 6272-6645
E-mail: ir@contact.sohu.com
In
Ms.
Christensen
Tel: +1 (480) 614-3004
E-mail: linda.bergkamp@christensencomms.com
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|||||||
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CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
|||||||
|
(UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS) |
|||||||
|
|
|
|
|
||||
|
|
|
Three Months Ended |
|
||||
|
|
|
|
|
|
|
|
|
|
Revenues: |
|
|
|
|
|
|
|
|
Marketing services |
$ |
15,624 |
$ |
13,725 |
$ |
19,853 |
|
|
Online games |
|
105,994 |
|
117,347 |
|
146,997 |
|
|
Others |
|
4,649 |
|
4,573 |
|
5,483 |
|
|
Total revenues |
|
126,267 |
|
135,645 |
|
172,333 |
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues: |
|
|
|
|
|
|
|
|
Marketing services (includes share-based |
|
12,979 |
|
12,341 |
|
15,904 |
|
|
Online games |
|
14,544 |
|
18,136 |
|
35,588 |
|
|
Others |
|
768 |
|
2,669 |
|
4,974 |
|
|
Total cost of revenues |
|
28,291 |
|
33,146 |
|
56,466 |
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
97,976 |
|
102,499 |
|
115,867 |
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Product development (includes share-based |
|
58,824 |
|
62,972 |
|
65,209 |
|
|
Sales and marketing (includes share-based |
|
48,545 |
|
45,586 |
|
83,936 |
|
|
General and administrative (includes share-based |
|
12,922 |
|
12,969 |
|
11,012 |
|
|
Total operating expenses |
|
120,291 |
|
121,527 |
|
160,157 |
|
|
|
|
|
|
|
|
|
|
|
Operating loss |
|
(22,315) |
|
(19,028) |
|
(44,290) |
|
|
|
|
|
|
|
|
|
|
|
Other income, net |
|
3,481 |
|
4,199 |
|
5,572 |
|
|
Interest income |
|
7,570 |
|
7,708 |
|
9,561 |
|
|
Exchange difference |
|
185 |
|
(119) |
|
231 |
|
|
Loss before income tax expense |
|
(11,079) |
|
(7,240) |
|
(28,926) |
|
|
|
|
|
|
|
|
|
|
|
Income tax expense/(benefit)[6] |
8,937 |
|
(189,391) |
|
8,731 |
|
|
|
Net income/(loss) |
|
(20,016) |
|
182,151 |
|
(37,657) |
|
|
|
|
|
|
|
|
|
|
|
Less: Net loss attributable to the noncontrolling |
|
- |
|
(9) |
|
- |
|
|
|
|
|
|
|
|
|
|
|
Net income/(loss) attributable to |
|
(20,016) |
|
182,160 |
|
(37,657) |
|
|
|
|
|
|
|
|
|
|
|
Basic net income/(loss) per share/ADS attributable to |
$ |
(0.69) |
$ |
6.07 |
$ |
(1.16) |
|
|
Shares/ADSs used in computing basic net |
|
28,826 |
|
30,008 |
|
32,492 |
|
|
|
|
|
|
|
|
|
|
|
Diluted net income/(loss) per share/ADS attributable to |
$ |
(0.69) |
$ |
6.07 |
$ |
(1.16) |
|
|
Shares/ADSs used in computing diluted net |
|
28,826 |
|
30,008 |
|
32,492 |
|
|
|
|
|
|
|
|
|
|
|
[6] See footnote 1. |
|||||||
|
[7] Each ADS represents one ordinary share. |
|||||||
|
|
||||
|
CONDENSED CONSOLIDATED BALANCE SHEETS |
||||
|
(UNAUDITED, IN THOUSANDS) |
||||
|
|
|
|
|
|
|
|
|
As of |
|
As of |
|
ASSETS |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
$ |
114,277 |
$ |
159,927 |
|
Restricted cash |
|
79 |
|
- |
|
Short-term investments |
|
711,784 |
|
744,498 |
|
Accounts receivable, net |
|
43,443 |
|
53,762 |
|
Prepaid and other current assets |
|
91,372 |
|
83,575 |
|
Total current assets |
|
960,955 |
|
1,041,762 |
|
Fixed assets, net |
|
247,829 |
|
252,860 |
|
Goodwill |
|
47,005 |
|
46,944 |
|
Long-term investments, net |
|
43,496 |
|
43,120 |
|
Intangible assets, net |
|
5,384 |
|
7,695 |
|
Long-term time deposits |
|
361,810 |
|
331,290 |
|
Other assets |
|
10,038 |
|
10,995 |
|
Total assets |
$ |
1,676,517 |
$ |
1,734,666 |
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
Accounts payable |
$ |
35,649 |
$ |
36,043 |
|
Accrued liabilities |
|
92,657 |
|
97,138 |
|
Receipts in advance and deferred revenue |
|
54,739 |
|
51,007 |
|
Accrued salary and benefits |
|
42,269 |
|
47,232 |
|
Taxes payables |
|
11,604 |
|
14,225 |
|
Other short-term liabilities |
|
78,485 |
|
76,322 |
|
Total current liabilities |
$ |
315,403 |
$ |
321,967 |
|
|
|
|
|
|
|
Long-term other payables |
|
2,870 |
|
2,807 |
|
Long-term tax liabilities |
|
295,381 |
|
485,545 |
|
Other long-term liabilities |
|
778 |
|
1,659 |
|
Total long-term liabilities |
$ |
299,029 |
$ |
490,011 |
|
Total liabilities |
$ |
614,432 |
$ |
811,978 |
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY: |
|
|
|
|
|
|
|
1,061,741 |
|
922,335 |
|
Noncontrolling interest |
|
344 |
|
353 |
|
Total shareholders' equity |
$ |
1,062,085 |
$ |
922,688 |
|
|
|
|
|
|
|
Total liabilities and shareholders' equity |
$ |
1,676,517 |
$ |
1,734,666 |
|
|
|
|
|
|
|
|
||||||||||||||||||
|
RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATIONS MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES |
||||||||||||||||||
|
(UNAUDITED, IN THOUSANDS EXCEPT PER SHARE AMOUNTS) |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Three Months Ended |
|
Three Months Ended |
||||||||||||
|
|
|
GAAP |
|
Non-GAAP |
|
Non- |
|
GAAP |
|
Non-GAAP |
|
Non- |
|
GAAP |
|
Non-GAAP |
|
Non- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
(a) |
|
|
|
|
- |
(a) |
|
|
|
|
1 |
(a) |
|
|
Marketing services gross profit |
$ |
2,645 |
$ |
- |
$ |
2,645 |
$ |
1,384 |
$ |
- |
$ |
1,384 |
$ |
3,949 |
$ |
1 |
$ |
3,950 |
|
Marketing services gross margin |
|
17 % |
|
|
|
17 % |
|
10 % |
|
|
|
10 % |
|
20 % |
|
|
|
20 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
(a) |
|
|
|
|
- |
(a) |
|
|
|
|
- |
(a) |
|
|
Online games gross profit |
$ |
91,450 |
$ |
- |
$ |
91,450 |
$ |
99,211 |
$ |
- |
$ |
99,211 |
$ |
111,409 |
$ |
- |
$ |
111,409 |
|
Online games gross margin |
|
86 % |
|
|
|
86 % |
|
85 % |
|
|
|
85 % |
|
76 % |
|
|
|
76 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
(a) |
|
|
|
|
- |
(a) |
|
|
|
|
- |
(a) |
|
|
Others gross profit |
$ |
3,881 |
$ |
- |
$ |
3,881 |
$ |
1,904 |
$ |
- |
$ |
1,904 |
$ |
509 |
$ |
- |
$ |
509 |
|
Others gross margin |
|
83 % |
|
|
|
83 % |
|
42 % |
|
|
|
42 % |
|
9 % |
|
|
|
9 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
(a) |
|
|
|
|
- |
(a) |
|
|
|
|
1 |
(a) |
|
|
Gross profit |
$ |
97,976 |
$ |
- |
$ |
97,976 |
$ |
102,499 |
$ |
- |
$ |
102,499 |
$ |
115,867 |
$ |
1 |
$ |
115,868 |
|
Gross margin |
|
78 % |
|
|
|
78 % |
|
76 % |
|
|
|
76 % |
|
67 % |
|
|
|
67 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
$ |
120,291 |
$ |
(353) |
(a) $ |
119,938 |
$ |
121,527 |
$ |
(392) |
(a) $ |
121,135 |
$ |
160,157 |
$ |
401 |
(a) $ |
160,558 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
353 |
(a) |
|
|
|
|
392 |
(a) |
|
|
|
|
(400) |
(a) |
|
|
Operating loss |
$ |
(22,315) |
$ |
353 |
$ |
(21,962) |
$ |
(19,028) |
$ |
392 |
$ |
(18,636) |
$ |
(44,290) |
$ |
(400) |
$ |
(44,690) |
|
Operating margin |
|
-18 % |
|
|
|
-17 % |
|
-14 % |
|
|
|
-14 % |
|
-26 % |
|
|
|
-26 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense/(benefit) |
$ |
8,937 |
$ |
- |
(c)$ |
8,937 |
$ |
(189,391) |
$ |
199,018 |
(c)$ |
9,627 |
$ |
8,731 |
$ |
(3,764) |
(c)$ |
4,967 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
353 |
(a) |
|
|
|
|
392 |
(a) |
|
|
|
|
(400) |
(a) |
|
|
|
|
|
|
- |
|
|
|
|
|
- |
|
|
|
|
|
131 |
(b) |
|
|
|
|
|
|
- |
|
|
|
|
|
(199,018) |
(c) |
|
|
|
|
3,764 |
(c) |
|
|
Net income/(loss) before non- |
$ |
(20,016) |
$ |
353 |
$ |
(19,663) |
$ |
182,151 |
$ |
(198,626) |
$ |
(16,475) |
$ |
(37,657) |
$ |
3,495 |
$ |
(34,162) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
353 |
(a) |
|
|
|
|
392 |
(a) |
|
|
|
|
(400) |
(a) |
|
|
|
|
|
|
- |
|
|
|
|
|
- |
|
|
|
|
|
131 |
(b) |
|
|
|
|
|
|
- |
|
|
|
|
|
(199,018) |
(c) |
|
|
|
|
3,764 |
(c) |
|
|
Net income/( loss) attributable to |
$ |
(20,016) |
$ |
353 |
$ |
(19,663) |
$ |
182,160 |
$ |
(198,626) |
$ |
(16,466) |
$ |
(37,657) |
$ |
3,495 |
$ |
(34,162) |
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Diluted net income/( loss) per |
$ |
(0.69) |
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(0.68) |
$ |
6.07 |
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(0.55) |
$ |
(1.16) |
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(1.05) |
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Shares/ADSs used in computing |
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28,826 |
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|
28,826 |
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30,008 |
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30,008 |
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32,492 |
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32,492 |
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Note: |
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(a) Share-based compensation expense |
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(b) Change in the fair value of the Company's investments |
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(c) Reversal of the tax expense in connection with the Toll Charge and related accrued interest expense |
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View original content to download multimedia:https://www.prnewswire.com/news-releases/sohucom-reports-second-quarter-2025-unaudited-financial-results-302520450.html
SOURCE
