Sohu.com Q4 Earnings Call Highlights

Key Points

• Sohu reported Q4 revenue of $142 million (+6% YoY, -21% QoQ) and full-year $584 million (-2% YoY); results were materially affected by a ~$285 million withholding tax reversal tied to Changyou, producing GAAP Q4 net income of $223 million and non-GAAP Q4 net income of $261 million, while 2025 non-GAAP results would have shown a $51 million loss excluding that reversal (a 40% improvement vs. 2024).
• Games remain the core driver: Changyou delivered Q4 revenue of $121 million and operating profit of $45 million (full-year revenue $509 million, operating profit $238 million), whereas the social media/media platform continues to shrink and lose money (Q4 revenue $21 million, operating loss $72 million; full-year revenue $75 million, operating loss $283 million).
• For Q1 2026 management guided marketing services of $10–11 million (down 20–27% YoY), online game revenue of $113–123 million (roughly flat to modestly up/down), and a preliminary GAAP/non-GAAP net loss of $10–20 million; the company has also bought back 8.1 million ADS for about $106 million, with roughly one-third of the repurchase program remaining.

Sohu.com NASDAQ: SOHU management said fourth quarter 2025 marketing services revenue came in above prior guidance, while online game revenue met expectations, as the company highlighted product and algorithm improvements on its media platform and ongoing content updates across its game portfolio.

Fourth quarter and full-year revenue trends

Chairman and CEO Dr. Charles Zhang reported total revenue of $142 million for the fourth quarter of 2025, up 6% year-over-year and down 21% sequentially. Marketing services revenue was $17 million, down 10% year-over-year and up 25% quarter-over-quarter. Online game revenue was $120 million, up 10% year-over-year and down 26% sequentially.

For the full year 2025, Zhang said total revenue was $584 million, down 2% from 2024. Marketing services revenue was $60 million, down 18%, while online game revenue was $506 million, up 1% year-over-year.

Profitability and tax reversal impact

Zhang noted that results were affected by the reversal of previously accrued withholding income tax related to Changyou of approximately $285 million. After giving effect to that reversal, Sohu reported GAAP net income attributable to Sohu.com Limited of $223 million for the fourth quarter, compared with a net loss of $21 million in the fourth quarter of 2024 and net income of $9 million in the third quarter of 2025.

After giving effect to the reversal, the company reported non-GAAP net income attributable to Sohu.com Limited of $261 million for the fourth quarter, versus a non-GAAP net loss of $15 million in the year-ago period and non-GAAP net income of $9 million in the prior quarter.

For the full year, Sohu posted GAAP net income attributable to Sohu.com Limited of $394 million, compared with a GAAP net loss of $100 million in 2024. Full-year non-GAAP net income attributable to Sohu.com Limited was $234 million, compared with a non-GAAP net loss of $83 million in 2024. Zhang added that excluding the withholding tax reversal, 2025 non-GAAP performance would reflect a $51 million loss, which he characterized as a 40% improvement versus 2024.

Segment performance: Media platform and Changyou

CFO Jenny Li (introduced on the call as “Diana”) provided non-GAAP segment details. For the social media platform business, fourth quarter revenue was $21 million, compared with $24 million in the same quarter last year, and operating loss was $72 million, compared with an operating loss of $69 million a year ago. For the full year 2025, social media platform revenue was $75 million versus $91 million in 2024, and operating loss was $283 million versus $287 million in 2024.

For Changyou, fourth quarter revenue was $121 million, up from $111 million in the year-ago quarter, while operating profit rose to $45 million from $38 million. For the full year 2025, Changyou revenue was $509 million, compared with $506 million in 2024, and operating profit was $238 million, up from $196 million.

On the product side, Zhang said Sohu’s media platform continued refining products and algorithms and hosted offline and online events aimed at boosting engagement and monetization. He cited initiatives including the Sohu Hip-Hop Dancing Awards, Sohu Video Chinese Traditional Costume Awards, Sohu Fashion Awards, and Sohu Finance Annual Forum. He also referenced a Halloween-themed American TV series party during Sohu Video’s American TV series month, and said the company continued expanding its content library with American dramas and other series.

Zhang also highlighted the “Physics Class” IP he teaches, saying it has conducted more than 270 live broadcasts, over 30 offline classes, and 270 online classes, along with university seminars and three published books.

Games: content cadence, TLBB updates, and pipeline

In games, management attributed the quarter-over-quarter revenue decline to fewer in-game promotional launches for TLBB PC and a natural decline for the newer PC game TLBB Return. Zhang said the company raised the player level cap for TLBB PC to boost engagement, launched a new character development system for TLBB Vintage, and introduced the first new clan in TLBB Return while refining the game based on player feedback.

For mobile titles, management said it launched “return to classics” themed content and streamlined gameplay for TLBB Mobile, which it said boosted engagement and willingness to pay, driving sequential revenue improvement in the mobile segment.

Discussing the pipeline, management said it has a card-based RPG mobile game based on a “Xiaomi IP,” which is expected to launch by the end of 2026 or early 2027, depending on development progress and testing results. Management also said several other games are in development and that launch timing would depend on development and testing outcomes. For existing games, the company expects to release expansion packs on a cadence similar to prior years, while noting that it could not forecast revenue trends beyond the near term and that performance would depend on expansion packs and potential new launches.

Asked about AI, management said it believes AI could be disruptive to the industry long term and that Changyou has been pushing AI applications particularly for creating game design plans, which it described as essential to game content production.

Outlook: Q1 guidance and advertising commentary

For the first quarter of 2026, Li guided marketing services revenue to $10 million to $11 million, implying a year-over-year decline of 20% to 27% and a sequential decline of 35% to 41%. Online game revenue was guided to $113 million to $123 million, implying a range from a 4% year-over-year decline to a 5% increase, and a sequential change ranging from a 6% decline to a 2% increase.

The company guided both GAAP and non-GAAP net loss attributable to Sohu.com Limited to $10 million to $20 million for the first quarter, which Li said reflects management’s current preliminary review and is subject to substantial uncertainty.

On the advertising outlook, Zhang attributed the softer first-quarter guidance primarily to seasonality tied to a later Chinese New Year (mid-February), saying advertisers tend to resume planning after the holiday. He said the macroeconomic situation remained similar to the fourth quarter, with “uncertainties,” and described a broader shift away from traditional brand advertising channels toward “innovative marketing solutions” involving influencers, viral events, offline events, and live streaming—areas he said align with Sohu’s platform and offerings. In response to a question on category trends, Zhang said the auto sector showed some improvement in the fourth quarter and represented a higher percentage of total revenue, while IT and FMCG were comparatively weaker.

Management also updated shareholders on the repurchase program, stating that as of February 5, 2026, Sohu had purchased 8.1 million ADS for an aggregate cost of approximately $106 million, with roughly one-third remaining under the program.

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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