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Date
Monday, Nov. 17, 2025 at 7:30 a.m. ET
Call participants
- Chairman and Chief Executive Officer — Dr. Charles Zhang
- Chief Financial Officer — Joanna Lv
- Senior Vice President — Huang Pu
- Chief Technology Officer — Yaobin Wang
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Risks
- Management noted, "the macroeconomic situation is not that good, you know, under pressure," and identified ongoing ad market deterioration, particularly in auto and IT services sectors.
- Guidance for both non-GAAP and GAAP net loss attributable to Sohu.com Limited (SOHU +7.33%) for 2025 is projected to be between $25 million and $35 million.
- Management said, "revenues are trending down" sequentially for both TLBB Return and TLBB Vintage, and the Q4 online game revenue outlook implies a 24%-30% sequential decrease.
Takeaways
- Total revenue -- $180 million, up 19% year-over-year and 43% sequentially, showing a significant quarterly acceleration.
- Marketing services revenues -- $14 million, down 27% year-over-year and down 13% sequentially, evidencing ongoing pressure in this segment.
- Online game revenues -- $162 million, up 27% year-over-year and 53% sequentially, primarily driven by new title launches.
- GAAP net income attributable to Sohu.com Limited -- $9 million, compared to a net loss of $60 million in the previous year and a net loss of $20 million last quarter.
- Non-GAAP net income attributable to Sohu.com Limited -- $9 million, versus a non-GAAP net loss of $12 million in the same quarter a year ago and a net loss of $20 million in the prior quarter.
- Social media platform performance -- Quarterly revenue of $70 million with an operating loss of $71 million, both relatively flat against the same period last year.
- Changyou gaming segment -- Quarterly revenue of $163 million and operating profit of $88 million, compared to $129 million and $62 million, respectively, in the comparable quarter of 2024.
- Share repurchase update -- As of Nov. 13, 2025, Sohu.com Limited had repurchased 7.6 million ADS for approximately $97 million, representing two-thirds of the authorized $150 million program.
- Online game title performance -- TLBB Return, a newly launched PC game, drove outperformance, with management saying user spending and retention were both "beyond our expectation."
- Forward guidance — marketing services revenue -- Expected in the $50 million to $60 million range for 2025, an annual decrease of 15%-20% and a sequential increase of 10%-18%.
- Forward guidance — online game revenue -- Expected in the $123 million to $130 million range next quarter, representing a 3%-12% annual increase but a sequential decrease of 24%-30%.
- AI adoption -- Sohu.com Limited is leveraging AI primarily for product user experience enhancements across social media (video summarization, subtitles) and news (search and Q&A), with the most productivity gains seen in the gaming business via art design, code generation, and game planning.
Summary
Sohu.com Limited delivered a return to profitability, achieving both GAAP and non-GAAP net income of $9 million, as online game revenues surged—primarily from the launch of TLBB Return and strong TLBB Vintage performance. Management indicated that sequential gaming revenue is expected to decline materially, with guidance implying that both GAAP and non-GAAP net loss attributable to Sohu.com Limited are expected to be between $25 million and $35 million in the next quarter. The marketing services segment remains challenged, though management expects a modest sequential rebound amid ongoing macroeconomic pressure and sector-specific weakness in auto and IT services.
- Management said the gaming segment's outperformance was due to unexpectedly high user spending and retention in TLBB Return, but also cautioned that both TLBB Vintage and TLBB Return revenues are "trending down" on a sequential basis, due partly to fewer planned promotional activities in the fourth quarter.
- Despite macro headwinds, the social media platform posted stable revenue and operating losses, while Changyou gaming saw year-over-year gains in both top-line and operating profit metrics.
- The share repurchase program continued, with two-thirds of the planned buyback completed as of mid-November.
- AI integration is underway but not focused on proprietary large language models, instead emphasizing productivity tools for content summarization, code generation, and design.
Industry glossary
- ADS: American Depositary Shares, U.S.-traded equity instruments representing shares of foreign companies.
- MMORPG: Massively Multiplayer Online Role-Playing Game, a genre of online games featuring large-scale, simultaneous player interaction in a virtual world.
- TLBB: "Tian Long Ba Bu," a flagship massively multiplayer game series operated by Sohu.com Limited subsidiary Changyou.
- OEN clan: A specific in-game character group or faction with unique attributes in Legacy TLBB Mobile.
Full Conference Call Transcript
Dr. Charles Zhang: Thanks, Huang Pu, and thank you, everyone, for joining our call. The 2025 marketing services revenues were in line with our guidance. Well, both our online game revenues and the bottom-line performance are benefiting from our continuous efforts in the gaming business and were well above our prior expectations. We recorded positive net income this quarter. For the social media platform, we continue to refine our products, integrate resources to better meet users' needs, and enhance their experiences. Meanwhile, leveraging our product metrics and distinctive events, we remain committed to generating and distributing diversified premium content and continuously energizing our platform. Our differentiated advantages and unique IP enabled us to further unlock monetization potential.
For online games, both new and established titles delivered outstanding performance driven by our deep understanding of our needs and proven operational expertise. Before going through each business unit in more detail, let me first give you a quick overview of our financial performance. The 2025 total revenue is $180 million, up 19% year-over-year, and 43% quarter over quarter. Marketing services revenues are $14 million, down 27% year over year and 13% quarter over quarter. Online game revenues are $162 million, up 27% year-over-year and 53% quarter over quarter.
GAAP net income attributable to Sohu.com Limited is $9 million, compared with a net loss of $60 million in 2024 and a net loss of $20 million in the second quarter of this year. Non-GAAP net income attributable to Sohu.com Limited was $9 million, compared to a net loss of $12 million in the third quarter of last year and a net loss of $20 million in the second quarter of this year. Now I'll go through our key businesses in more detail.
For the Sohu platform, we continue to leverage cutting-edge technologies to optimize our products and promote deeper integration across our product metrics. This enabled us to further adapt to various narrows, improve operation efficiencies, and enhance users' experiences. At the same time, relying on the synergies between various online and offline events, we continue to stimulate the generation and dissemination of premium content and attract more users to our platform. In the quarter, we hosted a variety of events and activities to further build a vigorous social networking platform, providing users with abundant opportunities for online and offline communications.
The 2025 autumn convention of social media influencers effectively promoted deeper communication among broadcasters across different verticals and significantly increased their vitality and retention on our platform. The ongoing 2025 Sohu Hip Hop Dancing Festival and other model competitions successfully ignited the passion of young people and further consolidated our influence in these areas. All these activities gained widespread recognition and popularity, continuously infusing a large amount of content and traffic into our platform. As a result, we were able to further expand the influence of Sohu and fostered a prosperous platform ecosystem. Additionally, we also held special theme activities like the Halloween American TV series party.
Not only did we engage users with innovative content forms, but it also became a highlight of our social media's American TV series month, which brought audiences classic dramas such as Westworld and The Mandalorian. Meanwhile, we also launched multiple TV dramas, original drama, and short dramas during this quarter to attract and retain users. The original drama, The Rebirth, was well-received by audiences, attracting more users to our platform. Through our flagship IP, the physics class, and Charles's physics class, we continue to strengthen our differentiated competitive advantages and create monetization opportunities. With trust, we were able to reach a wider audience through discussions on popular science topics and hot events, bringing physics knowledge closer to the general public.
This not only helped us generate unique and premium content, but also consistently unlocked monetization potentials. Together with the resources of Sohu's product metrics and our marketing capabilities, we actively adapted to market trends and provided advertisers with customized marketing solutions through a series of innovative campaigns and events, which are highly recognized by both audiences and advertisers.
Next, turning to our gaming business, in 2025, we launched a new PC game, TLBB Return, based on a beloved early version of TLBB PC. The game features reduced grinding and pay-to-win pressure, offering players a lighter gaming experience. It helped us attract many former players, and its revenue performance has so far exceeded our expectations. For TLBB PC, we also launched game content for TLBB Vantage that recreated the classic design of the game, which evoked nostalgia among players. Players' enthusiasm was far beyond our expectations. With regular TLBB PC updates, we offered new gear and rewards for our promotional events and redesigned the cross-server clan wall gameplay, which boosted willingness to pay among higher-paying players.
For mobile games, we launched an expansion pack for Legacy TLBB Mobile, which brought enhancements to the OEN clan's skills alongside a new storyline and engaging activities. Revenue for this game remained stable on a sequential basis. For the mobile TLBB Mobile, next quarter, we will continue to launch expansion packs and content updates for the TLBB series and other titles to further keep players engaged. Amid an increasingly competitive market, we remain committed to our top game strategy. We follow a user-centric philosophy and adhere to sound methodologies and a systematic R&D process to enhance efficiency and product success rates. As part of this strategy, we are taking concrete steps to unlock the potential of our TLBB IP.
Meanwhile, building upon our core strengths in MMORPGs, we are working to diversify into new types of games, including card-based RPGs, sports games, and casual games, as well as expand our offerings for global markets. Now I'd like to give an update on the ongoing share repurchase program. As of November 13, 2025, Sohu.com Limited had repurchased 7.6 million ADS for an aggregate cost of approximately $97 million, accounting for two-thirds of the $150 million program. With that, I will now turn the call over to Joanna.
Joanna Lv: Thank you, Charles. I will now walk you through the key financials of our major segments for 2025. All numbers are on a non-GAAP basis. You may find a reconciliation of non-GAAP to GAAP measures on our website. For the social media platform, quarterly revenues were $70 million, compared with $73 million in the same quarter last year. Quarterly operating loss was $71 million, compared with an operating loss of $72 million in the same quarter last year. For Changyou, quarterly revenue was $163 million, compared with $129 million in the same quarter last year. Quarterly operating profit was $88 million compared with operating profit of $62 million in the same quarter last year.
For 2025, we expect marketing service revenues to be between $50 million and $60 million. This implies an annual decrease of 15% to 20% and a sequential increase of 10% to 18%. Online game revenue is expected to be between $130 million and $123 million. This implies an annual increase of 3% to 12% and a sequential decrease of 24% to 30%. Both non-GAAP and GAAP net loss attributable to Sohu.com Limited are expected to be between $25 million and $35 million. This reflects management's current and preliminary view, which is subject to substantial uncertainty. This concludes our prepared remarks. Operator, we would now like to open the call to questions.
Operator: Thank you. We will now begin the question and answer session. To ask a question, please press 11 on your telephone and wait for your name to be announced. To withdraw your question, please press 11 again. We will now take our first question from the line of Thomas Chong at Jefferies. Please go ahead.
Thomas Chong: Hi. Good evening. Thanks, management, for taking my question. My first question is about the online game business. Given our online games performed very strongly in Q3, I'm just wondering how the quarter-to-date performance is so far? In particular, when I look into the guidance, it basically implies a sequential decline. So I'm not sure if we are a bit conservative in giving out Q4 gaming guidance. And on the other hand, when I look into our portal business, when I look into the advertising side, we are actually seeing quite a sequential rebound in terms of the advertising revenue.
Can Charles, may I ask about how you think about the macro sentiment coming into Q4, as well as the trend for different categories? And based on the current visibility, how should we think about the brand advertising outlook in 2026? If there's any color on that? Thank you.
Huang Pu: The performance of the fourth quarter so far is in line with our expectation. The strong third quarter results are primarily driven by the successful launch of a new game, TLBB Return. Meanwhile, the new servers of TLBB Vantage also performed very well, achieving historic highs. So the actual revenue of the third quarter exceeded our expectation a lot. The performance of the fourth quarter depends mainly on the performance of new TLBB Return and the content and activities that we will launch during the first quarter for TLBB PC, Legacy TLBB Mobile, etc.
Thomas Chong: Okay. So I think the Q4 rebound... Thomas, you... Is the same? Yes? Above the Q4? Yeah. Yeah. I think since the user... The whole ad base is not that big. Right? So it kind of oscillates a little bit. It depends on some, like, some, you know, a pact signed late and allocated to this quarter but went to the next quarter. Right? So it's... But we do have some... First of all, the macroeconomic situation is not that good, you know, under pressure. And different sectors like auto and IT services continue to deteriorate. But as our new innovative marketing campaigns or services are unique, we are still able to attract some advertising.
So we are going against the trend and basically stabilizing the advertising revenue on a small basis. Because in Q4, we have some good events creating opportunities to advertise.
Thomas Chong: I see. Thank you, Charles. May I ask a follow-up question about AI? Like, can you comment on how AI is integrated within Sohu.com right now? And are we seeing better productivity, cost savings, or enhanced advertising monetization so far? Thank you.
Dr. Charles Zhang: I think AI has more impact and usefulness or improvement in productivity on the gaming business. Right? For Sohu.com, we are not developing a large language model. Instead, we are using AI to improve the user experience. Like for our social media platform, AI can summarize video content and provide subtitles. Also, in our news app, there are AI-enhanced search and question-answering features. So we are basically using AI and different models to improve our existing media and social network services, rather than investing heavily in the hardcore large language model.
Yaobin Wang: The application of AI is mainly applied in art design, code generation, and game planning creation.
Dr. Charles Zhang: Thank you.
Operator: Thank you. We will now take our next question from Alicia Yap at Citi. Please go ahead, Alicia.
Alicia Yap: Hi. Yeah. Thank you. Good evening, management. Thanks for taking my questions. I have a couple of follow-ups. First, on the gaming, can management share with us what are the biggest surprises you learned from the TLBB Return version? And which one is the bigger driver in terms of the outperformance for this quarter? Is it the TLBB Vintage new server or the new game TLBB Return? And I understand you gave out the Q4 guidance. You mentioned this reflects the current situation. I wanted to know, is the Vintage server seeing a drop-off in users, or are the new titles TLBB Returns seeing a sequential decline in users and revenue?
Any color on that for Q3 and Q4 would be helpful. And then, a second question for Charles on the macro situation. I think you mentioned auto, IT services, and the ad sentiment seems to be deteriorating. Are there any industry verticals or subsectors you see either improving sentiment or it being about the same as the last few quarters? Thank you.
Huang Pu: The first surprise from TLBB Return is that the user spending is beyond our expectation. Because it was positioned as a gameplay that's more relaxing and requires less time. And demand for spending is also less. So, originally, we thought the users' paying wouldn't be very good.
Dr. Charles Zhang: Yeah.
Huang Pu: Second, the retention is very stable, better than our expectations. As for the contribution to revenue increase of the quarter, we do not disclose the specific numbers for individual games. So far, the user base for both TLBB Return and TLBB Vintage are very steady, but their revenues are trending down. That's because TLBB Vintage performed very well in the third quarter. In the fourth quarter, we plan to roll out fewer promotional activities. For TLBB Return, as it was newly launched in the third quarter, it will experience natural decline compared to the initial launch period because users tend to have a stronger willingness to pay when the game was initially launched.
Dr. Charles Zhang: Okay. So your second question is about the macro situation, the sectors? Yeah. Overall, the ad market is under pressure. For example, in the auto industry, there's fierce competition as there are too many car companies. They need to promote their brands and sales to stand out. However, the profit margins are very low for them, so the ad budgets are thinning. With this situation, we have unique campaigns like a physics class and social network distribution, allowing us to get ad budgets. The auto industry is flat but still declining. We are also looking at consumer electronics. China's manufacturing base is strong with many new products, but these need marketing for the domestic market.
Our innovative offerings, such as live streaming and social media distribution, allow us to get consumer electronics advertisers. So, despite the deteriorating market situation, we can get some advertising.
Huang Pu: Okay. Thank you, Charles.
Operator: Thank you. I am showing no further questions. And with that, we conclude our conference call today. Thank you for your participation. You may now disconnect your lines.