Financial Performance - Total revenues for Q2 2025 were $126 million, down 27% year over year and 7% quarter over quarter [7] - Marketing services revenues were $16 million, down 21% year over year but up 14% quarter over quarter [7] - Online game revenues were $106 million, down 28% year over year and 10% quarter over quarter [7] - GAAP net loss attributable to Silver dot com Limited was $20 million, compared to a net loss of $38 million in Q2 2024 [8] - Non-GAAP net loss attributable to total.com Limited was $20 million, compared to a net loss of $34 million in the same quarter last year [8] Business Segment Performance - Sohu Media Platform revenues for the quarter were $19 million, down from $24 million in the same quarter last year, with an operating loss of $69 million [16] - Changyou's quarterly revenues were $107 million, down from $148 million in the same quarter last year, but operating profit increased to $51 million from $32 million [16] Market Insights - The advertising market is experiencing weakness due to macroeconomic uncertainties and lower consumer spending [24] - The auto sector remains the largest advertising sector, followed by FMCG and IT services, with stabilization noted in the auto sector [25] Company Strategy and Industry Competition - The company is focusing on enhancing user engagement through differentiated events and product optimization [6] - There is a strategy to diversify game offerings and explore new verticals, including card-based RPGs and casual games [14] - The company aims to build a larger user base in social media, which is seen as critical for future growth [36] Management Commentary on Future Outlook - Management acknowledges the current macroeconomic challenges but remains optimistic about future user growth and market share expansion [24][26] - The company is utilizing AI to improve operational efficiency in gaming and enhance user experience in social media platforms [26][27] Other Important Information - As of July 2025, the company had repurchased 6.6 million ADS for approximately $83 million [15] - There are no current plans for additional capital returns beyond the share buyback program, as the focus remains on user base expansion [28] Q&A Session Summary Question: Insights on marketing services revenue and advertising sentiment - Management noted that advertising revenue is facing sequential weakness due to macroeconomic conditions and lower disposable income [24][25] Question: AI application in operations - AI is being used to improve efficiency in gaming and enhance search capabilities in social media apps, utilizing various language models [26][27] Question: Future capital return plans - Management confirmed that the focus is on the share buyback program, with no immediate plans for dividends or other capital returns [28] Question: Breakeven timing for marketing services revenue - Management indicated that breakeven is uncertain due to the nonlinear growth of the user base in social networks [36] Question: Sequential improvement in gaming revenue - The gaming segment is expected to perform stably, with new game releases anticipated to contribute to revenue [37] Question: Impact of events on user growth - Events like K-pop competitions are seen as community builders that help attract users to the Sohu app [39][40]

Company Overview - Sohu.com Limited (NASDAQ: SOHU) is a leading Chinese online media platform and game business group, established by Dr. Charles Zhang in the 1990s [3] - The company operates a comprehensive matrix of Chinese language web properties, including Sohu News App, Sohu Video App, mobile portal m.sohu.com, PC portal www.sohu.com, and online games platform www.changyou.com/en/ [3] Business Operations - Sohu provides a vast array of content such as news, information, text, pictures, videos, and live broadcasting, making it indispensable to the daily life of millions of Chinese users [4] - The online games business is conducted through its subsidiary Changyou, which develops and operates a diverse portfolio of PC and mobile games, including the well-known Tian Long Ba Bu ("TLBB") [4] Financial Reporting - Sohu will report its second quarter 2025 unaudited financial results on August 4, 2025, before U.S. market hours [1] - A conference call hosted by Sohu's management team will take place on the same day at 7:30 a.m. U.S. Eastern Time [1]

Financial Performance and Key Metrics - In Q1 2025, total revenues were $136 million, down 3% year-over-year and up 1% quarter-over-quarter [7] - Marketing services revenues were $14 million, down 15% year-over-year and 27% quarter-over-quarter [7] - Online game revenues were $117 million, flat year-over-year and up 7% quarter-over-quarter [7] - GAAP net income was $182 million compared to a net loss of $25 million in Q1 2024 [8] - Non-GAAP net loss was $16 million compared to a net loss of $22 million in Q1 2024 [8] Business Line Performance - Sohu Media platform revenues were $70 million, compared to $20 million in the same quarter last year, with an operating loss of $70 million [19] - Changyou's quarterly revenues were $180 million, down from $190 million in the same quarter last year, with an operating profit of $55 million [19] Market Data and Key Metrics - For Q2 2025, marketing services revenues are expected to be between $60 million and $70 million, implying a year-over-year decrease of 14% to 19% [20] - Online game revenues are expected to be between $96 million and $106 million, implying a year-over-year decrease of 28% to 35% [20] Company Strategy and Industry Competition - The company is focusing on enhancing its social media platform and leveraging unique IPs for monetization opportunities [6] - The online gaming business is adopting a top game strategy, diversifying its portfolio with various game types, and expanding into global markets [15][16] Management's Comments on Operating Environment and Future Outlook - Management noted that the advertising sentiment is mixed, with the auto sector performing better while luxury goods and alcohol spending is declining [24] - The company expects a similar trend in advertising for the second half of the year, with a focus on accelerating growth through its social network platform [25] - AI is seen as beneficial for the gaming business, improving efficiency in art design and production [29] Other Important Information - The company reversed a tax expense previously recognized, amounting to approximately $199 million, which was an accounting treatment issue rather than a cash flow event [8][42] Q&A Session Summary Question: Recent trend in advertising sentiment and outlook for the second half - Management indicated that the auto sector is performing better, while luxury goods and alcohol spending is declining, with expectations for a similar trend in the second half [24][25] Question: Impact of AI on advertising and online games - Management stated that AI has a marginal impact on the media platform but is beneficial for gaming, improving efficiency in various production aspects [26][29] Question: Details on the tax reversal - The tax reversal was an accounting issue related to uncertainty that has now been resolved, with no actual cash flow involved [42][45] Question: ADR delisting risk and alternative plans - Management noted that the situation is speculative and that they would consider alternatives if necessary, but currently, there are no immediate plans [48][52]

Core Viewpoint - Sohu.com Limited reported strong financial results for the first quarter of 2025, with marketing services and online game revenues exceeding expectations, while also benefiting from a significant tax reversal that contributed to a net income of $182 million [2][3][11]. Financial Performance - Total revenues for Q1 2025 were $136 million, a decrease of 3% year-over-year but an increase of 1% quarter-over-quarter [5]. - Marketing services revenues were $14 million, down 15% year-over-year and 27% quarter-over-quarter [5]. - Online game revenues were $117 million, flat year-over-year and up 7% quarter-over-quarter [5]. - Both GAAP and non-GAAP gross margins were 76%, compared to 77% in Q1 2024 and 73% in Q4 2024 [6]. - GAAP operating expenses were $122 million, down 9% year-over-year and 1% quarter-over-quarter [7]. - GAAP net income attributable to Sohu.com Limited was $182 million, or $6.07 per fully-diluted ADS, compared to a net loss of $25 million in Q1 2024 [11]. Tax Reversal Impact - The company fully reversed a tax expense of approximately $199 million related to a one-time transition tax, resulting in a significant income tax benefit for Q1 2025 [3][9]. Non-GAAP Financial Measures - Non-GAAP net loss attributable to Sohu.com Limited was $16 million, or a net loss of $0.55 per fully-diluted ADS, compared to a net loss of $22 million in Q1 2024 [12]. - Non-GAAP results exclude share-based compensation and the income tax benefit related to the Toll Charge [4][21]. Liquidity and Capital Resources - As of March 31, 2025, the company had cash and cash equivalents, short-term investments, and long-term time deposits totaling approximately $1.2 billion [13]. Business Outlook - For Q2 2025, Sohu estimates marketing services revenues between $16 million and $17 million, indicating an annual decrease of 14% to 19% [27]. - Online game revenues are expected to be between $96 million and $106 million, reflecting an annual decrease of 28% to 35% [27].

Company Overview - Sohu.com Limited (NASDAQ: SOHU) is a leading Chinese online media platform and game business group, established by Dr. Charles Zhang in the 1990s [3] - The company operates a comprehensive matrix of Chinese language web properties, including Sohu News App, Sohu Video App, mobile portal m.sohu.com, PC portal www.sohu.com, and online games platform www.changyou.com/en/ [3] Business Operations - Sohu provides a vast array of content such as news, information, text, pictures, videos, and live broadcasting, making it indispensable to the daily life of millions of Chinese users [4] - The online game business is conducted through its subsidiary Changyou, which develops and operates a diverse portfolio of PC and mobile games, including the well-known Tian Long Ba Bu ("TLBB") [4] Financial Reporting - Sohu will report its first quarter 2025 unaudited financial results on May 19, 2025, before U.S. market hours [1] - A conference call hosted by Sohu's management team will take place on the same day at 7:30 a.m. U.S. Eastern Time [1]