Sohu.com Inc ((SOHU)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Sohu.com Inc’s latest earnings call reveals a mixed sentiment characterized by strong performances in the gaming sector and innovative strategies, juxtaposed with challenges in declining advertising revenues and increased net losses driven by macroeconomic factors.
Online Game Business Outperformance
Sohu.com Inc’s online game segment showcased resilience, with Q4 2024 revenues reaching $110 million, surpassing prior expectations despite a slight 4% year-over-year decline. For the entirety of 2024, the segment posted a 5% revenue growth over the previous year, amounting to $502 million. This indicates a robust demand for their gaming offerings.
Innovative Gaming Strategies
The company has been actively enhancing its gaming portfolio through the introduction of new expansion packs and innovative gameplay. These efforts, particularly in the TLBB series, have successfully boosted user engagement, showcasing Sohu’s commitment to maintaining its competitive edge in the gaming sector.
Sohu Media Platform Engagement
Sohu’s media platform has successfully captured the interest of younger audiences by hosting events like the K-pop dancing tour and Hanfu Festival. These initiatives have not only strengthened the platform’s influence but also offered unique marketing solutions for advertisers, reflecting the platform’s growing significance.
Share Repurchase Program
Demonstrating confidence in its financial standing, Sohu has repurchased 4.2 million ADS shares at an aggregated cost of approximately $52 million. The company has also left room for future repurchases, with $100 million allocated for this purpose.
Decline in Brand Advertising Revenues
The company faced a 7% year-over-year and 1% quarter-over-quarter decline in brand advertising revenues in Q4 2024. Over the full year, these revenues dropped by 17% compared to 2023, highlighting a significant challenge in this segment.
Overall Revenue Decline
Sohu reported total revenues of $135 million for Q4 2024, marking a 5% year-over-year and 11% quarter-over-quarter decline. The full-year 2024 revenues remained flat compared to 2023, signaling stagnation amidst economic pressures.
Increased Net Loss
The GAAP net loss attributable to Sohu.com Limited for Q4 2024 was $21 million, a rise from $13 million in Q4 2023. The full-year GAAP net loss increased significantly to $100 million from $66 million in 2023, reflecting heightened financial pressures.
Economic Challenges Impacting Advertising
The current macroeconomic environment has led to reduced consumer spending, significantly affecting advertising budgets, particularly in the automotive sector. This economic backdrop poses a considerable challenge for Sohu’s advertising revenue streams.
Forward-Looking Guidance
Looking ahead, Sohu anticipates brand advertising revenues to be between $30 million and $40 million in Q1 2025, with online game revenues projected to range from $105 million to $115 million. The company expects a non-GAAP net loss between $16 million and $26 million, reflecting cautious optimism amid ongoing economic challenges.
In summary, Sohu.com Inc’s earnings call reflected a mixed sentiment with robust performance in gaming amid strategic innovations, yet significant challenges in advertising revenue and overall financial losses. The company’s forward-looking guidance suggests a focus on sustaining growth in gaming while navigating economic headwinds impacting advertising.
