SOHU.COM REPORTS FOURTH QUARTER AND FISCAL YEAR 2025 UNAUDITED FINANCIAL RESULTS

Core Viewpoint - Sohu.com Limited reported its financial results for Q4 and fiscal year 2025, highlighting a mixed performance with a significant reversal of previously accrued withholding income tax contributing to a net income for the quarter, despite declines in revenues and operating losses. Group 1: Fourth Quarter Highlights - Total revenues for Q4 2025 were US$142 million, representing a 6% increase year-over-year but a 21% decrease quarter-over-quarter [4][12] - Marketing services revenues were US$17 million, down 10% year-over-year but up 25% quarter-over-quarter [4][12] - Online game revenues reached US$120 million, up 10% year-over-year but down 26% quarter-over-quarter [4][12] - GAAP net income attributable to Sohu.com Limited was US$223 million, compared to a net loss of US$21 million in Q4 2024 [9][12] - Non-GAAP net income attributable to Sohu.com Limited was US$261 million, compared to a net loss of US$15 million in Q4 2024 [10][12] Group 2: Fiscal Year 2025 Highlights - Total revenues for fiscal year 2025 were US$584 million, down 2% compared to 2024 [13][12] - Marketing services revenues totaled US$60 million, down 18% compared to 2024 [13][12] - Online game revenues were US$506 million, up 1% compared to 2024 [13][12] - GAAP net income attributable to Sohu.com Limited was US$394 million, compared to a net loss of US$100 million in 2024 [19][12] - Non-GAAP net income attributable to Sohu.com Limited was US$234 million, compared to a net loss of US$83 million in 2024 [19][12] Group 3: Operating Performance - GAAP operating loss for Q4 2025 was US$66 million, compared to a loss of US$25 million in Q4 2024 [7][12] - Non-GAAP operating loss for Q4 2025 was US$29 million, compared to a loss of US$25 million in Q4 2024 [7][12] - GAAP operating expenses for Q4 2025 were US$173 million, up 41% year-over-year [6][12] - Non-GAAP operating expenses for Q4 2025 were US$136 million, up 11% year-over-year [6][12] Group 4: Gross Margin and Tax Benefits - Both GAAP and non-GAAP gross margin for Q4 2025 were 75%, compared to 73% in Q4 2024 [5][12] - GAAP income tax benefit for Q4 2025 was US$280 million, compared to an expense of US$14 million in Q4 2024 [8][12] - The reversal of previously accrued withholding income tax of approximately US$285 million related to Changyou significantly impacted the net income for Q4 2025 [8][12] Group 5: Liquidity and Capital Resources - As of December 31, 2025, Sohu had cash and cash equivalents, short-term investments, and long-term time deposits totaling approximately US$1.2 billion [11][12] Group 6: Business Outlook - For Q1 2026, Sohu estimates marketing services revenues to be between US$10 million and US$11 million, indicating a potential annual decrease of 20% to 27% [41] - Online game revenues are expected to be between US$113 million and US$123 million, suggesting an annual decrease of 4% to an increase of 5% [41]