Sohu Posts $15 Million Loss as Gaming Revenue Falls 30% in Third Quarter
Key Facts
Sohu.com reported unaudited results on November 9 for the third quarter ended September 30, 2026, posting a net loss under generally accepted accounting principles of $15 million, or $0.60 per fully diluted American depositary share (ADS), each representing one ordinary share. Total revenue was $133 million, down 26% year over year and 2% from the previous quarter. Chief Executive Charles Zhang said marketing services revenue reached the high end of the company’s guidance, while gaming revenue and the bottom line were in line with expectations. Performance shifted from net income of $9 million in the third quarter of 2025 and $0.2 million in the second quarter of 2026 to a loss in the latest period. The results highlight a decline in gaming activity, which accounts for the largest share of revenue, alongside year-over-year growth in the smaller marketing services business.
Online game revenue was $114 million in the third quarter, down 30% from the same period last year and 2% from the second quarter of 2026. Sohu attributed the annual decline to a natural pullback after a high comparison base in the third quarter of 2025, when content updates for TLBB PC and the launch of TLBB: Return helped boost revenue. Gaming revenue was $162 million then, up 27% year over year and 53% quarter over quarter, according to the company’s results for that period. The company said TLBB: Return launched in July 2025, alongside in-game updates and promotional activities that supported TLBB PC revenue during the quarter. In that quarter, average monthly active accounts for PC games totaled 2.7 million, up 24% year over year, while aggregate paying active accounts reached 1.1 million, up 27%. The company said these elevated levels formed the comparison base that explains a major part of the current quarter’s decline in gaming revenue.
By contrast, marketing services revenue was $15 million, up 10% year over year, but down 2% from the previous quarter. The business remains far smaller than gaming, which generated revenue of $114 million in the same period. Zhang said marketing revenue reached the high end of guidance, while gaming revenue and overall performance matched management’s expectations. For the company as a whole, revenue fell 2% quarter over quarter, reflecting declines on a quarterly comparison basis in total revenue, marketing services and gaming. The figures put annual growth in marketing against contraction in gaming, with growth in the smaller business not changing the overall revenue trend.
On the financial position, cash and cash equivalents, short-term investments and long-term time deposits totaled about $1.2 billion as of September 30, 2026. The company had announced a share repurchase program of up to $150 million; as of November 5, it had repurchased 10.1 million ADSs at a total cost of about $134 million. These figures provide financial context for the continued losses, as the company combined its reported liquidity balance with spending on repurchases under the program. The statement does not say these resources will change the trajectory of operating results, but it sets out the amount of cash, investments and deposits available at the end of the quarter. The repurchase figure is as of November 5, after the results period ended on September 30.
For the fourth quarter of 2026, Sohu expects marketing services revenue of $13 million to $14 million and online game revenue of $111 million to $121 million. It also expects a net loss attributable to the company, under both generally accepted and non-GAAP accounting standards, of $17 million to $27 million. The guidance ranges indicate that the company expects losses to continue in the next quarter, with gaming revenue potentially rising or falling from the third-quarter level depending on the point of comparison within the range. Expected marketing revenue is below the $15 million recorded in the third quarter. These estimates put gaming results and the net loss at the forefront of what markets will watch when the next period’s results are released.