Sohu.com (NASDAQ:SOHU) reported first-quarter 2026 revenue and profit metrics that exceeded its prior guidance, with online games remaining the company’s main revenue driver while advertising demand stayed pressured by weak macroeconomic conditions.
Chairman and Chief Executive Officer Charles Zhang said total revenue for the quarter was $141 million, up 4% from a year earlier and down 1% from the fourth quarter. Marketing services revenue was $13 million, down 8% year over year and 26% sequentially. Online game revenue rose 6% year over year and 2% quarter over quarter to $125 million.
Media Platform Focuses on Events and Monetization
Zhang said Sohu continued to refine its media products and use offline events to deepen engagement on its platform. He said the company focused on “promoting a healthy and vibrant atmosphere” while using differentiated events to expand monetization opportunities.
During the quarter, Sohu held the 18th Sohu News Marathon in Hong Kong and an offline seminar for Zhang’s “Physics Class” at The Hong Kong University of Science and Technology. Zhang said the marathon attracted participation from celebrities and broadcasters, while the physics event helped broaden the reach of one of the company’s flagship intellectual properties.
In April, the company hosted the 2026 spring convention of Sohu video influencers, bringing together celebrities and creators from areas including K-pop, Hanfu, science and health. Sohu also launched year-long competitions for K-pop dancing and Hanfu Chinese costume modeling.
Zhang said these activities are part of Sohu’s effort to combine offline events with online interaction, generate content and offer advertisers more customized campaigns. He said “Charles’s Physics Class” and other company IP continue to drive traffic and create monetization potential.
Games Business Delivers Revenue Growth
Sohu’s online games business, operated through Changyou, delivered another solid quarter, according to management. Zhang said performance was supported by content updates and targeted operational refinements across the company’s game portfolio.
In PC games, Sohu rolled out holiday events around Chinese New Year and Valentine’s Day, along with promotional events for TLBB PC. The company also introduced a new Mulong clan for TLBB Vintage and continued updates for TLBB Return.
In mobile games, Sohu launched an expansion pack for Legacy TLBB Mobile tied to Chinese New Year and held online and offline events. Zhang said revenue for that title stayed largely stable sequentially.
Looking ahead, management said it will continue releasing expansion packs and content updates for TLBB services and other titles. Zhang said Sohu remains committed to a “top game strategy,” with a focus on user-centric development, systematic research and development processes, and new technologies to improve efficiency and product success rates. He added that the company aims to further unlock the TLBB intellectual property while maintaining its edge in MMORPGs and diversifying its game portfolio.
Second-Quarter Outlook Shows Game Revenue Decline
Chief Financial Officer Joanna Lv said Sohu expects second-quarter online game revenue of $104 million to $114 million, representing a year-over-year change ranging from a 2% decline to an 8% increase, and a sequential decrease of 8% to 17%.
In the question-and-answer session, management said second-quarter game performance so far was “largely in line” with expectations. The company said revenue will depend on whether planned content and activities for the TLBB series satisfy user demand. Management also said fewer promotional and revenue-boosting activities are planned for the second quarter, which is expected to lead to a natural decline in game revenue.
For marketing services, management later characterized the second-quarter outlook as $13 million to $14 million, implying sequential growth from the first quarter. Zhang said the company expects advertising trends to remain similar to last year, with the broader economic environment weighing on advertiser spending.
Advertising Demand Remains Cautious
During the call, analysts asked about the outlook for advertising, including whether the upcoming World Cup could support revenue. Zhang said advertisers remain cautious because of the weaker economic backdrop, but Sohu is trying to maintain growth through differentiated marketing solutions built around its events, influencers and IP.
“A few years ago, it was an easy decision to spend money to advertise, but now it’s very difficult,” Zhang said, describing the need for customized events and campaigns to appeal to advertisers.
When asked whether weakness was concentrated in autos or spread more broadly, Zhang said ad budget pressure was “across the board,” including autos, fast-moving consumer goods and other categories. He said Chinese consumers are spending less, pressuring companies’ profitability and advertising budgets.
Management said auto and IT services, including home appliances and electronics, each accounted for 19% of first-quarter advertising revenue, while fast-moving consumer goods accounted for 14%. Zhang said the IT sector showed some positive signs, particularly as traditional home appliance and electronics companies introduce more AI-related products.
Share Repurchases Continue
Zhang also provided an update on Sohu’s share repurchase program. As of May 13, 2026, the company had repurchased 8.7 million American depositary shares at an aggregate cost of approximately $116 million.
Management cautioned that its second-quarter forecast reflects its current and preliminary view and remains subject to substantial uncertainty.
About Sohu.com (NASDAQ:SOHU)
Sohu.com Inc (NASDAQ: SOHU) is a Beijing-based technology and media company that operates one of China’s earliest and most comprehensive online portals. Established in 1996 by Charles Zhang, the company provides a diverse array of internet services including news, entertainment, video streaming and UGC (user-generated content) platforms. Over the years, Sohu.com has expanded its content offerings to cover topics such as finance, sports, automotive news and lifestyle, catering primarily to users across Mainland China.
In addition to its content portal, Sohu.com is active in the online advertising market, leveraging its high-traffic websites and mobile apps to deliver targeted ads for brand marketers.
