Sohu Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Total Revenue: $136 million, up 7% year-over-year, down 4% quarter-over-quarter.

Marketing Services Revenue: $15 million, down 3% year-over-year, up 21% quarter-over-quarter.

Online Game Revenue: $116 million, up 10% year-over-year, down 7% quarter-over-quarter.

GAAP Net Income: $200,000, compared to a net loss of $20 million in Q2 2025 and a net loss of $4 million in Q1 2026.

Non-GAAP Net Income: $500,000, compared to a net loss of $20 million in Q2 2025 and a net loss of $4 million in Q1 2026.

2Strategic Updates and Business Highlights

Sohu Media Platform: Continued product refinement and hosting of diverse events to enhance user engagement and social features. Notable events included the K-Pop Dancing Festival and the Chinese Costume Hanfu Model Competition, which attracted significant user participation.

Online Games: Successful launches of new content and updates, particularly for the TLBB series, which contributed to revenue exceeding guidance. The company plans to continue enhancing player engagement through further content updates.

Share Repurchase Program: Sohu repurchased 9.4 million ADS for approximately $124 million and announced an open-ended buyback program until the maximum authorized amount of $150 million is reached.

3Forward Guidance and Outlook

Q3 2026 Guidance:

Marketing Services Revenue: Expected between $40 million and $50 million (3% to 10% annual increase, 1% to 8% sequential decrease).

Online Game Revenue: Expected between $105 million and $150 million (29% to 35% annual decrease, 1% to 10% sequential decrease).

Non-GAAP and GAAP net loss expected between $30 million and $23 million.

4Bad News, Challenges, or Points of Concern

Advertising Sentiment: Despite a slight improvement in marketing services revenue, the overall advertising environment remains weak, with advertisers cautious in spending due to macroeconomic conditions.

Declining Game Revenue Outlook: The guidance for online game revenue reflects a significant anticipated decline, raising concerns about the sustainability of growth in this segment.

Operational Losses in Media Platform: The Sohu Media Platform reported an operating loss of $71 million, indicating ongoing challenges in achieving profitability.

5Notable Q&A Insights

Advertising Outlook: Management acknowledged the ongoing weak macroeconomic environment affecting advertising budgets, but noted that Sohu's unique marketing solutions have allowed for some growth.

World Cup Impact: The World Cup is not expected to significantly boost advertising revenue, but Sohu organized events to enhance user engagement.

Gaming Performance: The strong performance in Q2 was attributed to older games exceeding expectations, but a natural decline is anticipated in Q3, which may not align with typical seasonal trends. Overall, while Sohu demonstrated some positive financial metrics in Q2 2026, challenges remain, particularly in the advertising landscape and future revenue projections for online games.