Online Gaming Business Drives Sohu's 37% Revenue Growth In Q3

Sohu.com Ltd SOHU reported third-quarter FY21 revenue growth of 37% year-on-year to $216 million. Revenue improved 6% quarter-over-quarter.
Brand advertising revenues declined 18% Y/Y to $34 million due to decreases in portal advertising revenues.
Online game revenues grew 65% Y/Y to $167 million, mainly contributed by TLBB Vintage.
The gross margin was 74%, expanding 800 basis points Y/Y and contracting 200 basis points sequentially. The gross margin for online games was 83% versus 80% last year and 89% in 2Q21.
Non-GAAP earnings per ADS were $0.44.
Sohu held $1.57 billion in cash and equivalents.
Average monthly active user accounts for Changyou PC games increased 3% Y/Y to 2 million, mainly due to the TLBB Vintage. Average MAU for Changyou mobile games rose 22% Y/Y to 4.6 million, mainly due to the launch of Little Raccoon: Heroes.
"Overall, we delivered better than expected top line and bottom line performance thanks to the solid performance of our online game business," Chair and CEO Dr. Charles Zhang said.
Share buyback: The board authorized a share repurchase program of up to $100 million of the outstanding ADSs of Sohu over the next twelve months.
Outlook: Sohu sees Q4 brand advertising revenue decrease 26%-33% Y/Y to $28 million - $31 million.
It sees Q4 online game revenues growth 23%-29% to $140 million - $150 million.
Price Action: SOHU shares closed higher by 0.09% at $21.57 on Friday.

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