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Sohu.com(SOHU) - 2025 Q1 - Earnings Call Transcript
SOHUSohu.com(SOHU)2025-05-19 12:30

Financial Performance and Key Metrics - In Q1 2025, total revenues were 136million,down3136 million, down 3% year-over-year and up 1% quarter-over-quarter [7] - Marketing services revenues were 14 million, down 15% year-over-year and 27% quarter-over-quarter [7] - Online game revenues were 117million,flatyear−over−yearandup7117 million, flat year-over-year and up 7% quarter-over-quarter [7] - GAAP net income was 182 million compared to a net loss of 25millioninQ12024[8]−Non−GAAPnetlosswas25 million in Q1 2024 [8] - Non-GAAP net loss was 16 million compared to a net loss of 22millioninQ12024[8]BusinessLinePerformance−SohuMediaplatformrevenueswere22 million in Q1 2024 [8] Business Line Performance - Sohu Media platform revenues were 70 million, compared to 20millioninthesamequarterlastyear,withanoperatinglossof20 million in the same quarter last year, with an operating loss of 70 million [19] - Changyou's quarterly revenues were 180million,downfrom180 million, down from 190 million in the same quarter last year, with an operating profit of 55million[19]MarketDataandKeyMetrics−ForQ22025,marketingservicesrevenuesareexpectedtobebetween55 million [19] Market Data and Key Metrics - For Q2 2025, marketing services revenues are expected to be between 60 million and 70million,implyingayear−over−yeardecreaseof1470 million, implying a year-over-year decrease of 14% to 19% [20] - Online game revenues are expected to be between 96 million and 106million,implyingayear−over−yeardecreaseof28106 million, implying a year-over-year decrease of 28% to 35% [20] Company Strategy and Industry Competition - The company is focusing on enhancing its social media platform and leveraging unique IPs for monetization opportunities [6] - The online gaming business is adopting a top game strategy, diversifying its portfolio with various game types, and expanding into global markets [15][16] Management's Comments on Operating Environment and Future Outlook - Management noted that the advertising sentiment is mixed, with the auto sector performing better while luxury goods and alcohol spending is declining [24] - The company expects a similar trend in advertising for the second half of the year, with a focus on accelerating growth through its social network platform [25] - AI is seen as beneficial for the gaming business, improving efficiency in art design and production [29] Other Important Information - The company reversed a tax expense previously recognized, amounting to approximately 199 million, which was an accounting treatment issue rather than a cash flow event [8][42] Q&A Session Summary Question: Recent trend in advertising sentiment and outlook for the second half - Management indicated that the auto sector is performing better, while luxury goods and alcohol spending is declining, with expectations for a similar trend in the second half [24][25] Question: Impact of AI on advertising and online games - Management stated that AI has a marginal impact on the media platform but is beneficial for gaming, improving efficiency in various production aspects [26][29] Question: Details on the tax reversal - The tax reversal was an accounting issue related to uncertainty that has now been resolved, with no actual cash flow involved [42][45] Question: ADR delisting risk and alternative plans - Management noted that the situation is speculative and that they would consider alternatives if necessary, but currently, there are no immediate plans [48][52]