Sohu.com Q2 Earnings Call Highlights

Sohu.com (NASDAQ:SOHU) reported second-quarter 2026 revenue of $136 million, up 7% from a year earlier but down 4% from the prior quarter, as marketing services and online game revenue both exceeded the company’s previous guidance.

Chairman and Chief Executive Officer Charles Zhang said the company’s marketing services revenue, online game revenue and bottom-line performance surpassed expectations during the quarter. marketing services revenue totaled $15 million, down 3% year over year and up 21% sequentially, while online game revenue reached $116 million, up 10% from a year earlier and down 7% from the first quarter.

GAAP net income attributable to Sohu was $200,000, compared with a net loss of $20 million in the second quarter of 2025 and a $4 million net loss in the first quarter. The result included the reversal of approximately $30 million in tax expense related to previously uncertain tax positions. On a non-GAAP basis, net income attributable to Sohu was $500,000, versus net losses of $20 million a year earlier and $4 million in the prior quarter.

Advertising market remains cautious

Zhang said Sohu’s media and social platform continued to refine its products, improve user engagement and combine offline events with online communities to encourage interaction and premium content creation. The company held events including its Sohu Video Influencers spring convention, K-pop dancing festival, Hanfu model competition, campus activities, outdoor and sports events, World Cup-related viewing parties, and its annual science and technology conference.

The company also continued to use proprietary content franchises, including Charles’s Physics Class and Charles’s English Class, to attract users and offer marketing solutions to advertisers. Zhang said the English program marked its 10th anniversary and has conducted more than 2,000 live broadcasts.

Despite the quarter’s sequential growth in marketing services revenue, Zhang said the broader advertising environment remained weak.

“The macroeconomic situation is still very bad, actually bad and sloppy,” Zhang said during the question-and-answer session. “Advertisers are now very cautious in spending.”

He said advertisers have increasingly shifted away from traditional channel advertising and toward marketing approaches designed to create viral distribution through key opinion leaders and social networks. Sohu was able to outperform its forecast because of its marketing offerings, including combinations of online social platform campaigns, livestreaming and offline activities, Zhang said.

Auto represented 33% of the company’s advertising business, followed by fast-moving consumer goods at 20% and information technology at 17%, according to Zhang. He said all three categories were facing cautious spending conditions.

Zhang also said the World Cup was not expected to have a meaningful effect on advertising revenue. Rather, Sohu’s World Cup activities are intended primarily to attract and develop users through viewing events and related social engagement.

Games outperform on older titles

Sohu’s online game business benefited from content updates and promotional activity across the Tian Long Ba Bu, or TLBB, franchise. During the quarter, the company introduced crossover content tied to the “Storm Riders” Wuxia comic franchise for regular TLBB PC and TLBB Vintage, launched a new character-development system for regular TLBB PC, and added gameplay content to TLBB: Return.

For mobile games, Changyou launched an anniversary expansion pack and in-game promotions for Legacy TLBB Mobile. Zhang said those activities increased player engagement and that the title’s revenue remained stable sequentially.

Changyou Chief Executive Officer Dewen Chen said performance during the first nearly two months of the third quarter was broadly in line with expectations, though the final outcome will depend on the reception of upcoming content and activities.

Chen said the second-quarter outperformance was driven largely by stronger-than-expected performance from older games, including TLBB PC, where expansion packs performed well with players. However, the company expects a natural decline in those older games during the third quarter because they have been operating for a long time.

Looking ahead, management said it plans to release additional expansion packs and content updates for the TLBB series and other titles. Sohu also said it intends to further develop the TLBB intellectual property, maintain its position in massively multiplayer online role-playing games and diversify its portfolio with other game types aimed at global audiences.

Third-quarter outlook and repurchases

For the third quarter, Sohu forecast marketing services revenue of $40 million to $50 million, representing year-over-year growth of 3% to 10% and a sequential decline of 1% to 8%. The company expects online game revenue of $105 million to $115 million, down 29% to 35% from a year earlier and down 1% to 10% sequentially.

Sohu expects both GAAP and non-GAAP net loss attributable to the company to range from $30 million to $23 million in the third quarter. Management said the forecast is based on its current preliminary review and remains subject to substantial uncertainty.

The company also updated investors on its share repurchase authorization. As of Aug. 6, Sohu had repurchased 9.4 million American depositary shares for approximately $124 million. The board authorized the program to continue on an open-ended basis until the maximum $150 million authorization is reached.

Zhang said the open-ended extension was necessary because daily trading-volume limits made it unlikely that the company could complete the remaining roughly $26 million of authorized repurchases by the program’s previous November expiration date.

About Sohu.com (NASDAQ:SOHU)

Sohu.com Inc (NASDAQ: SOHU) is a Beijing-based technology and media company that operates one of China's earliest and most comprehensive online portals. Established in 1996 by Charles Zhang, the company provides a diverse array of internet services including news, entertainment, video streaming and UGC (user-generated content) platforms. Over the years, Sohu.com has expanded its content offerings to cover topics such as finance, sports, automotive news and lifestyle, catering primarily to users across Mainland China.

In addition to its content portal, Sohu.com is active in the online advertising market, leveraging its high-traffic websites and mobile apps to deliver targeted ads for brand marketers.

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