Sohu.com SOHU Q2 2025 Earnings Preview Upside Potential Driven by AI Integration

Forward-Looking Analysis
Sohu.com is expected to report mixed results for Q2 2025, with marketing services revenue projected between $16 million and $17 million, marking a potential annual decline of 14% to 19% but a sequential rise of 17% to 24%. Online game revenues are anticipated to range from $96 million to $106 million, reflecting an annual decrease of 28% to 35% and a sequential drop of 10% to 18%. The company forecasts a GAAP net loss attributable to Sohu.com Limited between $20 million and $30 million. Analysts have observed the company's focus on AI integration, particularly in art design and audio production in gaming, which is expected to enhance efficiency and productivity. Sohu.com continues to leverage its social network strategy to increase user engagement, mitigating some of the adverse impacts of declining advertising revenue.

Historical Performance Review
In Q1 2025, Sohu.com reported revenue of $131.07 million, net income of $182.15 million, and earnings per share (EPS) of $6.07. The company's gross profit was recorded at $102.50 million. This quarter saw a significant reversal of a previously recognized tax expense, contributing to the net income. Marketing services revenue reached $14 million, while online game revenues were stable at $117 million. The company's media platform and online game business performed well, with marketing services revenue achieving guidance targets and online games exceeding expectations.

Additional News
Sohu.com has been actively strengthening its social network features, hosting various events to engage users. The 2025 Spring Convention of the Soho Video Influencers and the 17th Soho News Marathon in China are notable efforts to boost platform vitality. The company’s distinctive IP, Charles Physics Class, continues to attract audiences and advertisers, demonstrating its monetization potential across exhibitions. Additionally, Sohu.com has expanded its content library with original dramas and American TV series. The company is applying AI technology extensively in its gaming business, enhancing efficiency in art design, music production, and user interface design.

Summary & Outlook
Sohu.com exhibits a stable financial health with substantial revenue generation from its media and gaming platforms, despite challenges in advertising revenue. AI integration serves as a vital growth catalyst, improving operational efficiency and supporting content expansion. The company's social network strategy and event-driven user engagement are expected to foster platform growth. However, ongoing risks include market competition and potential ADR delisting. Given the current dynamics, Sohu.com's outlook remains cautiously optimistic, with a neutral stance on future prospects as management navigates uncertainties.