Sohu.com Clocks 16% Topline Decline In Q1 Due To Weaker Revenue From Brand Advertising And Online Games

Sohu.com Limited (NASDAQ: SOHU) reported a first-quarter FY23 revenue decline of 16% year-on-year to $161.8 million. Revenue was up by 1% Q/Q.
Brand advertising revenues declined 5% Y/Y to $23 million. Online game revenues decreased 18% Y/Y to $129 million.
The non-GAAP gross margin was firm Y/Y at 75% and down by 300 bps Q/Q. The non-GAAP gross margin for online games was 85% versus 86% last year and 84% in the prior quarter.
Non-GAAP loss per ADS was $(0.37) above the consensus loss of $(0.56).
Sohu held $1.4 billion in cash and equivalents.
Average monthly active user accounts for Changyou PC games increased by 8% Y/Y to 2.2 million. The average MAU for Changyou mobile games fell by 32% Y/Y to 1.6 million.
Outlook: Sohu sees Q2 brand advertising revenue of $23 million - $26 million, up by (8)%-4% Y/Y.
It sees Q2 online game revenues decline of (22)%-(29)% Y/Y to $112 million - $122 million.
Sohu estimates Q2 non-GAAP net loss of $(15) million-$(25) million.
Price Action: SOHU shares closed lower by 1.88% at $13.55 on Friday.

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