Sohu revenue climbs to $141M on steady online gaming expansion

Sohu.com (NASDAQ:SOHU) reported initial top-line revenue expansion for the first quarter of 2026, beating conservative market forecasts as robust multiplayer gaming activity compensated for ongoing structural shifts across the broader Chinese digital advertising landscape.

The Beijing-based internet portal and gaming operator generated total consolidated revenue of US$141 million for the three months ended March 31, 2026.

The performance represents a 4% increase year-over-year, though it reflects a modest 1% sequential decline from the final quarter of fiscal 2025.

The company's primary operational engine remained its online gaming segment, consisting largely of its subsidiary Changyou.

Online game revenues rose 6% year-over-year and 3% sequentially to US$125 million, supported by consistent content updates and targeted in-game events across its flagship computer and mobile portfolios.

Conversely, the company’s marketing services division posted a revenue decline of 8% year-over-year to US$13 million, registering a steeper 26% contraction from the prior quarter due to typical post-holiday enterprise spending cuts.

On the bottom line, Sohu recorded both a GAAP and non-GAAP net loss attributable to the parent company of US$4 million, translating to a net loss of US$0.17 per fully diluted American Depositary Share (ADS).

This performance represents an operational stabilization compared to a non-GAAP net loss of US$16 million in the first quarter of 2025.

The GAAP metrics for previous periods included large, non-recurring tax adjustments, including a US$199 million IRS transition tax reversal in early 2025 and a US$285 million Changyou withholding tax adjustment at the end of 2025.

Underlying operational metrics across the company’s distinct business structures diverged.

Driven by its core gaming catalog, the Changyou segment generated a healthy GAAP operating profit of US$65 million.

The strength of the gaming line allowed Sohu's overall consolidated GAAP operating loss to narrow to US$7 million, improving from an operating loss of US$11 million in the opening quarter of fiscal 2025.

Meanwhile, Sohu maintained an expansive capital stack to navigate shifting macroeconomic conditions, closing the quarter with approximately US$1.2 billion in cash, cash equivalents, short-term investments, and long-term time deposits.

Armed with high liquidity, management continued to execute its active capital return strategy, confirming the company has repurchased 8.7 million ADSs for approximately US$116 million under its authorized US$150 million share buyback program