Sohu.com (SOHU) Q2 2024 earnings summary

Executive summary

• Total revenues reached $172 million in Q2 2024, up 13% year-over-year and 24% quarter-over-quarter, driven by strong online game performance and brand advertising at the high end of guidance.

• Online game revenues surged 24% year-over-year and 25% quarter-over-quarter to $147 million, exceeding expectations.

• Brand advertising revenues declined 17% year-over-year but rose 24% sequentially to $20 million.

• GAAP net loss widened to $38 million from $21 million a year ago and $25 million in the previous quarter; non-GAAP net loss was $34 million.

• Gross margin fell to 67% from 76% a year ago, mainly due to a higher revenue mix from mobile games with higher revenue-sharing costs.

Financial highlights

• GAAP operating loss was $44 million, compared to $23 million in Q2 2023 and $27 million in Q1 2024.

• Non-GAAP operating loss was $45 million, up from $23 million in Q2 2023 and $27 million in Q1 2024.

• Sohu Media and Sohu Video reported $24 million in revenue and a $72 million operating loss; Changyou's online game business and 17173 had $148 million in revenue and $32 million operating profit.

• Cash, cash equivalents, short-term investments, and long-term time deposits totaled $1.3 billion as of June 30, 2024.

• Basic and diluted net loss per ADS was $1.16 (GAAP) and $1.05 (non-GAAP).

Outlook and guidance

• Q3 2024 brand advertising revenues expected between $17 million and $19 million, down 14%–23% year-over-year and 4%–14% sequentially.

• Q3 2024 online game revenues projected at $104 million–$114 million, down 3%–11% year-over-year and 22%–29% sequentially.

• Q3 2024 non-GAAP net loss expected between $30 million and $40 million; GAAP net loss between $34 million and $44 million.