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    SOHU
    Earnings call· Jun 2026(Q2 FY26)

    Sohu.com Q2 FY26 earnings call SOHU

    Aug 10, 2026 Source

    Executive summary

    Sohu.com Limited Q2 FY26 — Exceeds Guidance with Strong Gaming and Marketing Services Performance

    Sohu delivered a stronger-than-expected second quarter, surpassing guidance across revenue and profitability, driven by robust online game performance and innovative marketing solutions. Despite a challenging macroeconomic environment impacting advertiser sentiment, the company's marketing services are projected to achieve positive year-over-year growth in the upcoming quarter for the first time in a long while. The board also extended its share repurchase program to ensure full utilization of the authorized amount.

    Highlights

    5

    • Total revenue of $136 million, up 7% year-over-year, exceeded previous guidance.

    • Online game revenues reached $116 million, marking a 10% year-over-year increase and surpassing guidance.

    • Marketing Services revenues were $15 million, up 21% quarter-over-quarter, also exceeding guidance.

    • Non-GAAP net income attributable to Sohu.com Limited was $0.5 million, compared to net losses in prior periods, exceeding guidance.

    • Q3 FY26 marketing services revenue guidance implies positive year-over-year growth of 3% to 10%, marking the first such growth in a long time.

    Concerns

    4

    • The macroeconomic situation is described as "still very bad, actually bad and sloppy," leading to cautious advertiser spending.

    • Q3 FY26 online game revenue guidance of $105 million to $115 million implies a significant year-over-year decrease of 29% to 35%.

    • Q3 FY26 non-GAAP net loss attributable to Sohu.com Limited is projected to be between $30 million and $33 million.

    • Sohu Media platform reported an operating loss of $71 million in Q2 FY26, an increase from an operating loss of $69 million in Q2 FY25.

    Guidance & targets

    3
    CategoryTargetConfidence
    Marketing Service Revenues
    $40 million and $50 million
    medium materiality
    High
    Online Game Revenues
    $105 million and $115 million
    high materiality
    High
    Non-GAAP and GAAP Net Loss attributable to Sohu.com Limited
    $30 million and $33 million
    high materiality
    High

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Marketing Services
    Company-level marketing services revenue.
    		$15 million-3%21%—
    Online Games
    Company-level online game revenue.
    		$116 million10%-7%—

    Operational metrics

    10
    Total revenue growth
    7%YoY
    Q2 FY26

    Total revenue for continuing operations.

    Total revenue growth
    -4%QoQ
    Q2 FY26

    Total revenue for continuing operations.

    GAAP Net Income attributable to Sohu.com Limited
    $0.2 millioncompared to net loss of $20M in Q2 FY25 and $4M in Q1 FY26
    Q2 FY26

    After giving effect to the reversal of a tax expense of approximately $30 million due to a reversal of uncertain tax positions.

    Non-GAAP Net Income attributable to Sohu.com Limited
    $0.5 millioncompared to net loss of $20M in Q2 FY25 and $4M in Q1 FY26
    Q2 FY26

    After giving effect to the reversal of a tax expense of approximately $30 million due to a reversal of uncertain tax positions.

    Revenues
    $90 millionflat YoY
    Q2 FY26

    Non-GAAP basis for the Sohu Media platform business unit.

    Operating loss
    $71 millionvs operating loss of $69 million in Q2 FY25
    Q2 FY26

    Non-GAAP basis for the Sohu Media platform business unit.

    Revenues
    $170 millionvs $107 million in Q2 FY25
    Q2 FY26

    Non-GAAP basis for the Changyou business unit.

    Operating profit
    $56 millionvs operating profit of $51 million in Q2 FY25
    Q2 FY26

    Non-GAAP basis for the Changyou business unit.

    ADS repurchased
    9.4 million
    As of Aug 6, 2026

    From aggregate cost approximately $124 million under the share repurchase program.

    Share repurchase authorization
    $150 million
    Open-ended

    Board authorized repurchases to continue on an open-ended basis until the maximum authorized amount is reached.

    Industry KPIs

    1
    MetricValueDetails
    Share buyback capital returned$124 millionUSD

    Risks & headwinds

    2
    Macroeconomic situation and cautious advertiser spendingNear-term

    Advertisers are "very cautious in spending"; key categories (auto, FMCG, IT) are "spending less."

    Mitigation: Sohu provides unique marketing solutions combining online social media platforms with offline activities, live streaming, and events to attract advertisers.

    Natural decline in older online gamesQ3 FY26

    Q3 FY26 online game revenue guidance implies a 29% to 35% YoY decrease and 1% to 10% QoQ decrease.

    Mitigation: The company continues to launch expansion packs and content updates for existing titles and adheres to a long-term operation strategy with systematic R&D and diversification of game types.

    What to watch in Q3 FY26

    4

    Marketing Services Revenue Growth Trend

    Next quarter (Q4 FY26 results)
    CurrentQ3 FY26 guidance implies 3%-10% YoY growth
    TargetContinued positive YoY growth

    Why it matters

    Indicates potential recovery in the advertising business despite macro headwinds🌐, validating the effectiveness of unique marketing solutions.

    And we're looking at -- yes, we are looking at -- for a long time, we're looking at some kind of growth for the first time in a long time.

    Q&A highlights

    5

    What is the view on advertising outlook for H2 given the Q2 results, and what was the impact of the World Cup? Can you provide color on advertising sentiment across categories?

    The macroeconomic situation remains challenging, leading to cautious advertiser spending. However, Sohu achieved growth in marketing services due to unique solutions combining online and offline activities. The World Cup had little impact on income but helped acquire users. Auto, FMCG, and IT sectors are all spending less.

    “The answer to your question is still similar to last time that the macroeconomic situation is still very bad, actually bad and sloppy. Advertisers kind of are now very cautious in spending. But because of our unique marketing offerings. So we were able to achieve actually some kind of growth compared with Q1.”

    asked by Thomas Chong · answered by Charles Zhang

    2 min read5 chapters

    Detailed Narrative

    01

    Sohu Media Platform Strategy and Events

    Sohu continued to refine its social media platform with upgraded technologies and enhanced user experience, leveraging synergy between offline activities and online communities. Key events included the 2026 Spring Convention of Sohu Video influencers, the annual K-Pop dancing festival, and the Chinese costume model competition, attracting thousands of young participants. The platform also hosted attractive activities in conjunction with popular events like the World Cup and strengthened its position in knowledge and science-related live broadcasts with core IPs like Charles' physics and English classes, driving traffic and engagement.

    02

    Online Game Business Performance and Strategy

    The online game business exceeded prior guidance in Q2 FY26, primarily driven by strong performance from older games, particularly the TLBB series, which saw successful expansion packs and promotional events. The company remains committed to its long-term operation strategy, focusing on systematic R&D, advanced technologies, and continuous experimentation. Future plans include further unlocking the potential of the TLBB IP, diversifying the portfolio beyond MMR RPGs, and expanding product offerings with global appeal.

    03

    Share Repurchase Program Update

    As of August 6, 2026, Sohu had repurchased 9.4 million ADS for approximately $124 million. The Board of Directors authorized the continuation of repurchases on an open-ended basis until the maximum authorized amount of $150 million is reached. This extension was necessary due to daily trading volume limitations preventing the completion of the program by its original November expiration date, ensuring the remaining $26 million can be utilized.

    04

    Advertising Outlook and Macro Environment

    Despite a challenging macroeconomic environment described as "bad and sloppy," leading to cautious advertiser spending, Sohu's marketing services achieved growth by providing unique marketing solutions. These solutions combine online social media platforms with offline activities, live streaming, and events, catering to brand advertisers seeking viral distribution through key influencers. Key advertising categories like auto (33%), FMCG (20%), and IT (17%) are all experiencing reduced spending due to macro issues.

    05

    Q3 Gaming Outlook and Seasonality

    The Q3 FY26 online game revenue guidance implies a sequential and year-over-year decline, which management attributes to an expected natural decline in older games. This follows an outperformance in Q2 FY26, where expansion packs for games like TLBB were very well received, leading to better-than-expected results. The Q3 forecast reflects the normal lifecycle of these long-operated titles after a strong period.

    AI-generated summary of the company’s earnings call. Not investment advice.