Sohu.com Navigates Tough Quarter With Strategy Shift, Despite Drop In Game Revenue
Portfolio Pulse from Anusuya Lahiri
Sohu.com Limited (NASDAQ: SOHU) reported a 22% Y/Y revenue decline to $145.4 million for Q3 2023, with a larger than expected adjusted loss per ADS of 30 cents. Brand advertising and online game revenues fell 14% and 21% Y/Y, respectively. Despite this, the adjusted gross margin improved to 76%. The company has $1.4 billion in cash and equivalents. Monthly active users for PC games rose 3% Y/Y, while mobile games saw a 9% Y/Y decline. The company's 'Twin Engine' strategy focuses on short-form content and live broadcasts. Q4 outlook anticipates further declines in brand advertising and online game revenues, with an adjusted net loss projected between $10 million and $20 million. SOHU shares increased by 5.84% in premarket trading.
November 13, 2023 | 12:28 pm
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Sohu.com reported a significant revenue decline and a larger than expected loss, but shares traded higher by 5.84% premarket. The company's 'Twin Engine' strategy and improved gross margin may offer some optimism.
While the reported revenue decline and loss per ADS are negative indicators, the premarket stock price increase suggests that investors may be responding positively to the improved gross margin and strategic initiatives. The outlook for Q4 indicates potential continued challenges, but the current premarket reaction is optimistic.
CONFIDENCE 75
IMPORTANCE 80
RELEVANCE 100