Sohu.com Limited ( SOHU Quick Quote SOHU - Free Report) reported relatively soft first-quarter 2022 results with a year-over-year decrease in revenues and net income due to lower contribution from both the brand advertising sector and the online games sector. The company aims to focus on refining its products and improving its operational efficiency in the impending quarters. Quarter Details
Revenues reported in the quarter were $193.4 million, beating the Zacks Consensus Estimate of $173 million. Net Income reported in the quarter was $2.7 million or 7 cents per share, beating the Zacks Consensus Estimate of a loss of 31 cents. In the quarter, Brand advertising revenues declined 22.7% year over year to $23.8 million. Online games revenues of $157.8 million fell 10.6%. Other revenues totalled $11.8 million, down 20.6%.
Despite a year-over-year decrease, the online games sector reported better-than-expected results, primarily driven by product upgrades and refinement in the quality in the news and overall content.
For PC games, total average monthly active user accounts (MAU) were 2 million, down 13% year over year, due to the decline of Changyou’s older games. Total quarterly aggregate active paying accounts (APA) were 1 million, up 4%.
For mobile games, total average MAU was 2.4 million, up 16% year over year, which was driven by Bright Stars, a game launched for the women during the quarter. Total quarterly APA was 0.5 million, up 14%, again driven by Bright Stars.
Quarterly GAAP operating profit was reported at $12.7 million, down 75.1% from the year-ago quarter. Operating expenses increased 6% year over year due to an increase in traffic and user acquisition cost. However, top-line contraction led to lower operating profit in the quarter.
As of Mar 31 2022, Sohu had $534.2 million in cash and cash equivalents with $450.3 million of long-term tax liabilities.
For the second quarter of 2022, Brand advertising revenues are estimated to be in the range of $22-$25 million, which implies an decrease of 32% to 40% year over year. Online game revenues are expected in the band of $150-$160 million, which indicates an annual decrease of 1% to increase of 6%. Sohu’s non-GAAP net loss is likely to be between $15 million and $5 million. GAAP net loss is projected between $18 million and $8 million.
Zacks Rank & Stocks to Consider
Sohu currently carries a Zacks Rank #3 (Hold). You can see
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