Sohu’s total revenues for the third quarter of 2014 were US$430 million, up 17% YoY and 8% QoQ.
Its online advertising revenues, which include revenues from brand advertising and search and others businesses for Q3 2014, were US$247 million, up 40% YoY and 13% QoQ.Brand advertising revenues totaled US$149 million, up 19% YoY and 12% QoQ due to increases in revenues from online video advertising.
Sohu online game revenues for the third quarter of 2014 were US$150 million, down 7% YoY and 2% QoQ, mainly due to decreased revenues from Wartune and DDTank. Both games have now entered into a relatively mature phase in China, as well as from TLBB, following the strategic decision to reduce the game’s difficulty. And, game players are spending less money in TLBB after Changyou made a strategic decision to reduce the level of difficulty of the game.
Sohu’s operating loss for the third quarter of 2014 was US$41 million, compared with operating profit of US$52 million in the third quarter of 2013 and operating loss of US$62 million in the second quarter of 2014.
Non-GAAP operating loss for the third quarter of 2014 was US$26 million, compared with operating profit of US$55 million in the third quarter of 2013 and operating loss of US$35 million in the second quarter of 2014.
Dr. Charles Zhang, Chairman and CEO of Sohu.com Inc., commented,
We had a solid quarter, and our financial performance was largely in line with our expectations. Some of our key business lines continued to show strong momentum. Sohu Video maintained a healthy growth in users, driven by an impressive 40% sequential increase in mobile traffic. Sogou’s quarterly revenue exceeded $100 million for the first time and was up 86% year-over-year. In September, Sogou’s mobile Keyboard became the No.1 app on the iOS China app store’s ranking table once Apple finally allowed third party input method software to work on its iOS 8 system.”
For the fourth quarter of 2014, Sohu estimates:
- Total revenues to be between US$442 million and US$462 million.
- Brand advertising revenues to be between US$145 million and US$150 million; this implies a sequential decrease of 3% to a sequential increase of 1% and an annual increase of 18% to 22%.
- Sogou revenues to be between US$118 million and US$123 million; this implies a sequential increase of 11% to 16% and an annual growth of 68% to 75%.
- Online game revenues to be between US$155 million and US$165 million; this implies a sequential increase of 3% to 10% and an annual decrease of 4% to 10%.
- Guidance on Non-GAAP net income, Non-GAAP fully diluted earnings per ADS, and share-based compensation expense for the fourth quarter of 2014 will not be provided at this time, as there are uncertainties as to expected costs and expenses associated with mobile games launched, expected to be launched, and currently in development