Yahoo Finance Sohu.com (SOHU) Q2 Earnings Beat Estimates, Revenues Rise Y/Y
Sohu.com SOHU reported second-quarter 2021 adjusted earnings of 63 cents per share, which beat the Zacks Consensus Estimate by a wide margin of 125%. The company had reported a loss of $1.92 per share in the year-ago quarter.
Revenues increased 27.8% year over year to $204.4 million.
Top Line Details
In the second quarter, Brand advertising revenues decreased 3.1% year over year to $36.8 million.
Online game revenues of $151.3 million jumped 42.8% year over year, driven by strong demand for TLBB Vintage.
Sohu.com Inc. Price, Consensus and EPS Surprise
Sohu.com Inc. price-consensus-eps-surprise-chart | Sohu.com Inc. Quote
For PC games, total average monthly active user (MAU) accounts were 2.1 million, up 9% year over year. Total quarterly aggregate active paying accounts (APA) were 0.9 million, down 3% year over year.
For mobile games, total average MAU were 1.9 million, down 39% year over year primarily due to lower demand for Legacy TLBB Mobile and TLBB Honor. Total quarterly APA were 0.5 million, down 21% year over year.
Other revenues increased 1.7% year on year to $16.3 million.
Operating Details
Non-GAAP gross margin in second-quarter 2021 increased to 76% from 67% reported in the year-ago quarter.
Brand advertising business margin decreased to 28% from the year-ago quarter’s 40%. The year-over-year decrease was mainly due to increases in costs of events hosted in the second quarter of 2021.
Online games’ non-GAAP gross margin was 89%, up from the year-ago quarter’s 78%.
Non-GAAP operating expenses were $127.2 million, up 25% year over year due to higher marketing expenses as well as salary and benefits expenses.
Sohu’s non-GAAP operating profit was $28 million, significantly up from the year-ago quarter’s $5.2 million.
Balance Sheet
As of Jun 30, 2021, Sohu’s cash and cash equivalents (including restricted cash and short-term investments) came in at $874.4 million compared with $335 million as of Mar 31, 2021.
Q3 Guidance
For third-quarter 2021, Brand advertising revenues are anticipated in the range of $35-$39 million, down 5% to 15%.
Online game revenues are expected in the band of $145-$155 million, which indicates a year-over-year increase of 43-53%.
Zacks Rank & Stocks to Consider
Sohu.com currently carries a Zacks Rank #3 (Hold).
Better-ranked stocks in the broader technology sector include Avnet AVT, CyberArk Software CYBR and Agilent Technologies A. While Avnet sports a Zacks Rank #1 (Strong Buy), both CyberArk and Agilent carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Avnet, CyberArk and Agilent are set to report their earnings results on Aug 11, 12 and 17, respectively.
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