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Sohu.com (SOHU) Q2 Earnings Beat Estimates, Revenues Rise Y/Y

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·3 min read
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Sohu.com SOHU reported second-quarter 2021 adjusted earnings of 63 cents per share, which beat the Zacks Consensus Estimate by a wide margin of 125%. The company had reported a loss of $1.92 per share in the year-ago quarter.

Revenues increased 27.8% year over year to $204.4 million.

Top Line Details

In the second quarter, Brand advertising revenues decreased 3.1% year over year to $36.8 million.

Online game revenues of $151.3 million jumped 42.8% year over year, driven by strong demand for TLBB Vintage.

Sohu.com Inc. Price, Consensus and EPS Surprise

Sohu.com Inc. Price, Consensus and EPS Surprise
Sohu.com Inc. Price, Consensus and EPS Surprise

Sohu.com Inc. price-consensus-eps-surprise-chart | Sohu.com Inc. Quote

For PC games, total average monthly active user (MAU) accounts were 2.1 million, up 9% year over year. Total quarterly aggregate active paying accounts (APA) were 0.9 million, down 3% year over year.

For mobile games, total average MAU were 1.9 million, down 39% year over year primarily due to lower demand for Legacy TLBB Mobile and TLBB Honor. Total quarterly APA were 0.5 million, down 21% year over year.

Other revenues increased 1.7% year on year to $16.3 million.

Operating Details

Non-GAAP gross margin in second-quarter 2021 increased to 76% from 67% reported in the year-ago quarter.

Brand advertising business margin decreased to 28% from the year-ago quarter’s 40%. The year-over-year decrease was mainly due to increases in costs of events hosted in the second quarter of 2021.

Online games’ non-GAAP gross margin was 89%, up from the year-ago quarter’s 78%.

Non-GAAP operating expenses were $127.2 million, up 25% year over year due to higher marketing expenses as well as salary and benefits expenses.

Sohu’s non-GAAP operating profit was $28 million, significantly up from the year-ago quarter’s $5.2 million.

Balance Sheet

As of Jun 30, 2021, Sohu’s cash and cash equivalents (including restricted cash and short-term investments) came in at $874.4 million compared with $335 million as of Mar 31, 2021.

Q3 Guidance

For third-quarter 2021, Brand advertising revenues are anticipated in the range of $35-$39 million, down 5% to 15%.

Online game revenues are expected in the band of $145-$155 million, which indicates a year-over-year increase of 43-53%.

Zacks Rank & Stocks to Consider

Sohu.com currently carries a Zacks Rank #3 (Hold).

Better-ranked stocks in the broader technology sector include Avnet AVT, CyberArk Software CYBR and Agilent Technologies A. While Avnet sports a Zacks Rank #1 (Strong Buy), both CyberArk and Agilent carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Avnet, CyberArk and Agilent are set to report their earnings results on Aug 11, 12 and 17, respectively.


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