Sohu.com Limited, a leading Chinese online media and gaming company has reported a drop in revenue for the second quarter of 2025. This drop was reported even though the company managed to cut its losses nearly in half.
Sohu.com Reveals Significant Drop in Q2 2025 Revenue Statement
For Sohu.com, (NASDAQ: SOHU), the total revenue for the quarter came in at $126 million, marking a 27% decline year-over-year and a 7% drop from the previous quarter. Despite the slowdown, Sohu posted a net loss of $20 million, significantly narrower than the $38 million loss it recorded during the same period last year.
The company’s gross margin improved to 78%, which is up from 67% a year ago. This increase reflects tighter cost controls and greater operational efficiency. Apart from these figures, gross profit reached $92 million, and operating loss narrowed to $22 million (which is down from $44 million a year earlier).
Note that a major revenue source for Sohu is online gaming which is conducted via its Changyou subsidiary. Online gaming saw sales fall 28% year-over-year to $106 million, with a 10% sequential decline from Q1. Meanwhile, marketing services brought in $16 million, down 21% compared to the previous year but up 14% from the prior quarter.
Operating expenses remained under control at $120 million, down 25% year-over-year and roughly flat from Q1. The company’s ability to contain costs helped improve its bottom line, even as revenue declined.
CEO Charles Zhang said results came in at the high end of company expectations. He stressed upon the need for continued focus on product refinement and social network operations to improve user engagement and monetization.
The company hosted multiple themed content events to help users with shared interests connect. These efforts, as per the company’s management, are key to keeping users on the platform longer and increasing revenue-generating opportunities. Zhang also highlighted steady updates and optimization in Sohu’s game offerings as a reason for resilience in the gaming business.
Looking ahead, Sohu predicted online game revenue in the third quarter between $107 million and $117 million, a range that could mean slight sequential growth, but still down year-over-year. Marketing services revenue is expected to be between $14 million and $15 million, which would reflect continued weakness.
Sohu also expects to report a net loss of $25 million to $35 million for Q3, in line with previous quarters. The projections are based on an exchange rate assumption of 7.15 RMB to 1 USD.
Speaking on other aspects of this gaming news, cash reserves remain strong, with Sohu holding around $1.2 billion in cash, short-term investments, and long-term deposits as of June 30. The company has repurchased 6.6 million American Depositary Shares (ADS) for nearly $83 million as part of its ongoing $150 million buyback program.
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