Sohu.com Ltd. Q1 FY2025 earnings call

• Sohu Media platform focused on strengthening social features, hosting events like the 2025 Spring Convention of Sohu Video influencers and the 17th Sohu News Marathon, and leveraging the Charles Physics class IP for monetization. - Online game business performed well with PC game updates around holidays and character system upgrades, and Legacy TLBB Mobile launching expansion packs for Chinese New Year.

For the first quarter of 2025, total revenues were $136 million, down 3% year-over-year and up 1% quarter-over-quarter. Marketing services revenues were $14 million, down 15% year-over-year and 27% quarter-over-quarter. Online game revenues were $117 million, flat year-over-year and up 7% quarter-over-quarter. On a non-GAAP basis, Sohu Media platform had quarterly revenues of $70 million with an operating loss of $70 million compared to the same quarter last year. Changyou had quarterly revenues of $180 million with a quarterly operating profit of $55 million, flat with the same quarter last year.

• For the second quarter of 2025, marketing services revenues are expected to be between $60 million and $70 million (annual decrease 14%-19%, sequential increase 17%-24%). - Online game revenues are expected to be between $96 million and $106 million (annual decrease 28%-35%, sequential decrease 10%-18%). - Non-GAAP and GAAP net loss attributable to Sohu.com Limited is expected to be between $20 million and $30 million.

• ADR delisting risk is mentioned as a potential risk, with management stating they will address it if it occurs.

Q: About marketing services trend across categories and second half advertising outlook; and about AI benefit to advertising and gaming operations.

A: Charles Zhang mentioned auto marketing services doing better, IT services stable, FMCG stable with some categories like luxury and alcohol spending down; second half expected similar. On AI, Sohu Media's social network strategy has less exposure to AI impact, while online game benefits from AI.

Q: About AI models in gaming and Sohu Media, tax reversal related business, and ADR delisting risk.

A: Charles Zhang and Joanna Lv mentioned using DeepSeek and open source language models in Sohu News and Video apps; tax reversal is an accounting issue related to Sohu company; on ADR delisting risk, management stated they'll address it if it happens when it occurs