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Sohu.com Ltd

Sohu.com LtdSOHU财报

Nasdaq

Sohu, Inc. is a Chinese Internet company headquartered in the Sohu Internet Plaza in Haidian District, Beijing. Sohu and its subsidiaries offer advertising, a search engine (Sogou.com), on-line multiplayer gaming (ChangYou.com) and other services.

What changed in Sohu.com Ltd's 20-F — 2024 vs 2025

Top changes in Sohu.com Ltd's 2025 20-F

709 paragraphs added · 674 removed · 602 edited across 5 sections

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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As our services may be used to download and distribute information to others, there is a risk that claims may be made against us for defamation, negligence, copyright or trademark infringement or based on the nature and content of such information.
As our services may be used to download and distribute information to others, there is a risk that claims may be made against us for defamation, negligence, or copyright or trademark infringement or based on the nature and content of such information.
We allow users to upload written materials, images, pictures and other content on our platforms and download, share, link to audio, video and other content either on our platforms or from other websites through our platforms.
We allow users to upload written materials, images, pictures and other content on our platforms and to download, share, and link to audio, video, and other content either on our platforms or from other websites through our platforms.
As a result of these regulations, we may lose some of our existing medical advertising clients; • Advertising agencies and advertisers may adopt new methods and strategies other than brand advertising to promote their brands. For example, they may shift their budgets from brand advertising to sales-driven promotions.
As a result of these regulations, we may lose some of our existing medical advertising clients; • Advertising agencies and advertisers may adopt new methods and strategies other than brand advertising to promote their brands. For example, they may shift their budgets from advertising to sales-driven promotions.
On February 7, 2021, the Anti-Monopoly Committee of the State Council issued the Anti-Monopoly Guidelines for the Platform Economy Sector (the “Platform Guidelines”), which provide guidance on competition and compliance for companies operating in Internet-related businesses.
On February 7, 2021, the Anti-Monopoly Committee of the State Council issued the Anti-Monopoly Guidelines for the Platform Economy Sector (the “Platform Economy Guidelines”), which provide guidance on competition and compliance for companies operating in Internet-related businesses.
The State Administration of Taxation (the “SAT”) issued an Announcement on Issues in Tax Treaties Relating to “Beneficial Owner” (“Announcement 9”), effective April 1, 2018, which provides guidance on determining whether an enterprise is a “beneficial owner” of dividends under the Chinese mainland’s tax treaties and tax arrangements.
The State Administration of Taxation (the “SAT”) issued the Announcement on Issues in Tax Treaties Relating to “Beneficial Owner” (“Announcement 9”), effective April 1, 2018, which provides guidance on determining whether an enterprise is a “beneficial owner” of dividends under the Chinese mainland’s tax treaties and tax arrangements.
On September 2, 2014, the SAPPRFT issued a Notice on Further Strengthening the Administration of Online Foreign Audiovisual Content (the “September 2014 SAPPRFT Notice”), which requires that operators of audiovisual websites obtain from the SAPPRFT a Film Public Screening Permit, TV Drama Distribution Permit, or TV Animation Distribution Permit for all foreign films and TV dramas before they are transmitted via the Internet in the Chinese mainland.
On September 2, 2014, the SAPPRFT issued the Notice on Further Strengthening the Administration of Online Foreign Audiovisual Content (the “September 2014 SAPPRFT Notice”), which requires that operators of audiovisual websites obtain from the SAPPRFT a Film Public Screening Permit, TV Drama Distribution Permit, or TV Animation Distribution Permit for all foreign films and TV dramas before they are transmitted via the Internet in the Chinese mainland.
Changyou’s past successes in its online games business with PC games may not provide a meaningful basis to evaluate its current business and prospects, as a substantial number of game players have migrated from personal computers to mobile devices to access online games.
Changyou’s past successes in its online game business with PC games may not provide a meaningful basis to evaluate its current business and prospects, as a substantial number of game players have migrated from personal computers to mobile devices to access online games.
If any of the members of Changyou’s management or its key employees joins a competitor or forms a competing company, not only would Changyou lose know-how, key professionals, staff members and suppliers, but such members of Changyou’s management and key employees could develop and operate games and other services that could compete with and take game players and users away from its existing and future business.
If any of the members of Changyou’s management or its key employees joins a competitor or forms a competing company, not only would Changyou lose know-how, key professionals, staff members and suppliers, but such members of Changyou’s management and key employees could develop and operate games and other services that could compete with and take game players and users away from Changyou’s existing and future business.
A significant portion of Changyou’s online game revenues is generated from its PC games, and from TLBB in particular. However, until recently, the popularity of PC games had declined, leading online game developers to delay or suspend their plans for new PC games due to the difficulty of retaining their existing players.
A significant portion of Changyou’s online game revenues is generated from its PC games, and from TLBB PC in particular. However, until recently, the popularity of PC games had declined, leading online game developers to delay or suspend their plans for new PC games due to the difficulty of retaining their existing players.
If a downward trend resumes or accelerates, it may be difficult for Changyou’s existing PC games in general, and TLBB in particular, to maintain their popularity and for Changyou’s new PC games to become commercially successful; and the game player base of Changyou’s PC games in general, and of TLBB in particular, may shrink, which would increase Changyou’s costs to acquire and retain players of its PC games and would have a negative impact on its online game revenues.
If a downward trend resumes or accelerates, it may be difficult for Changyou’s existing PC games in general, and TLBB PC in particular, to maintain their popularity and for Changyou’s new PC games to become commercially successful; and the game player base of Changyou’s PC games in general, and of TLBB PC in particular, may shrink, which would increase Changyou’s costs to acquire and retain players of its PC games and would have a negative impact on its online game revenues.
Changyou’s future operating results will depend on numerous factors affecting the online game industry, many of which are beyond Changyou’s control, including: • whether the online game industry, particularly in the Chinese mainland and the rest of the Asia-Pacific region, continues to grow and the rate of any such growth; • the availability and popularity of other forms of entertainment, particularly games on console systems, which are already popular in developed countries and may gain popularity in the Chinese mainland; 50 Table of Contents • growth in users of the Internet and broadband and penetration in the Chinese mainland and other markets in which Changyou offers its games, and the rate of any such growth; • whether recent declines in the use of personal computers and growth in users of mobile devices such as smart phones and tablets in general, and for purposes of accessing online games in particular, continue or accelerate in the Chinese mainland and other markets in which Changyou offers its games; • changes in consumer demographics and public tastes and preferences; and • general economic conditions in the Chinese mainland, particularly economic conditions adversely affecting discretionary consumer spending.
Changyou’s future operating results will depend on numerous factors affecting the online game industry, many of which are beyond Changyou’s control, including: • whether the online game industry, particularly in the Chinese mainland and the rest of the Asia-Pacific region, continues to grow and the rate of any such growth; • the availability and popularity of other forms of entertainment, particularly games on console systems, which are already popular in developed countries and may gain popularity in the Chinese mainland; 50 Table of Contents • growth in users of the Internet and broadband and penetration in the Chinese mainland and other markets in which Changyou offers its games, and the rate of any such growth; • whether declines in the use of personal computers and growth in users of mobile devices such as smart phones and tablets in general, and for purposes of accessing online games in particular, continue or accelerate in the Chinese mainland and other markets in which Changyou offers its games; • changes in consumer demographics and public tastes and preferences; and • general economic conditions in the Chinese mainland, particularly economic conditions adversely affecting discretionary consumer spending.
Changyou’s revenues have fluctuated over several years, and Changyou may experience declines in its revenues or suffer net losses in the future due to a number of factors, including, among other things, expected continued declines in revenues from TLBB PC, TLBB 3D and Legacy TLBB Mobile; uncertainty regarding the popularity of Changyou’s future games; uncertainty as to Changyou’s ability to develop and launch high-quality games that are commercially successful; the relatively higher game development and distribution costs generally associated with new games; the need to expend greater amounts in order to develop or acquire new games, technologies, assets, and businesses; and uncertainty as to Changyou’s ability to integrate such newly acquired games, technologies, assets and businesses.
Changyou’s revenues have fluctuated over several years, and Changyou may experience declines in its revenues or suffer net losses in the future due to a number of factors, including, among other things, expected continued declines in revenues from TLBB PC and Legacy TLBB Mobile; uncertainty regarding the popularity of Changyou’s future games; uncertainty as to Changyou’s ability to develop and launch high-quality games that are commercially successful; the relatively higher game development and distribution costs generally associated with new games; the need to expend greater amounts in order to develop or acquire new games, technologies, assets, and businesses; and uncertainty as to Changyou’s ability to integrate such newly acquired games, technologies, assets and businesses.
In addition, Changyou has previously obtained, and intends to continue to seek to obtain, license rights for works from certain authors in foreign countries, and its ability to obtain such rights has previously been, and may be in the future be, adversely affected by greater scrutiny of such works, and a stricter approval process for permission to obtain such rights, by relevant authorities in the Chinese mainland compared to the scrutiny of and approval process applicable to domestic works. 53 Table of Contents Even if Changyou obtains license rights for works, we cannot be certain that games that Changyou adapts from such works will be popular and commercial successes and that Changyou will be able to recoup the amounts it pays for the license rights.
In addition, Changyou has previously obtained, and may continue to seek to obtain, license rights for works from certain authors in foreign countries, and its ability to obtain such rights has previously been, and may be in the future be, adversely affected by greater scrutiny of such works, and a stricter approval process for permission to obtain such rights, by relevant authorities in the Chinese mainland compared to the scrutiny of and approval process applicable to domestic works. 53 Table of Contents Even if Changyou obtains license rights for works, we cannot be certain that games that Changyou adapts from such works will be popular and commercial successes and that Changyou will be able to recoup the amounts it pays for the license rights.
We have not been required to go through any cybersecurity review by the CAOC under the Cybersecurity Laws as currently in effect; and we believe that we are unlikely to be required by the CAOC to go through cybersecurity reviews due to the facts that (i) our ADSs were listed on Nasdaq before the Cybersecurity Laws went into effect, and the Cybersecurity Laws do not require Internet platform operators that hold personal information of over one million users to file supplemental applications for cybersecurity reviews of such operators’ previous issuances of their securities to foreign investors that occurred before the Cybersecurity Laws went into effect; (ii) the competent regulatory and supervisory authorities in the Chinese mainland are required under the CII Regulations to identify critical information infrastructure and the CIIOs of such critical information infrastructure, and to notify all CIIOs that have been so identified, and we have not received any such notice; (iii) the nature of the data that we process in our business is such that it is unlikely that Chinese mainland authorities would conclude that such data impact or may impact national security; and (iv) we have not been required to go through a cybersecurity review initiated by the CAOC, nor are we aware of any preliminary investigation of our company by the CAOC that might lead to such a review.
We have not been required to go through any cybersecurity review by the CAC under the Cybersecurity Laws as currently in effect; and we believe that we are unlikely to be required by the CAC to go through cybersecurity reviews due to the facts that (i) our ADSs were listed on Nasdaq before the Cybersecurity Laws went into effect, and the Cybersecurity Laws do not require Internet platform operators that hold personal information of over one million users to file supplemental applications for cybersecurity reviews of such operators’ previous issuances of their securities to foreign investors that occurred before the Cybersecurity Laws went into effect; (ii) the competent regulatory and supervisory authorities in the Chinese mainland are required under the CII Regulations to identify critical information infrastructure and the CIIOs of such critical information infrastructure, and to notify all CIIOs that have been so identified, and we have not received any such notice; (iii) the nature of the data that we process in our business is such that it is unlikely that Chinese mainland authorities would conclude that such data impact or may impact national security; and (iv) we have not been required to go through a cybersecurity review initiated by the CAC, nor are we aware of any preliminary investigation of our company by the CAC that might lead to such a review.
In order to compete effectively in the Chinese mainland, as well as in the worldwide market, Changyou must continue to invest in research and development, to enhance its technology and its existing games, advertising and other services, and to timely introduce new game products and services in order for it to adapt to industry trends and shifting demands of game players and advertising clients and to remain competitive.
In order to compete effectively in the Chinese mainland, as well as in the worldwide market, Changyou must continue to invest in research and development, to enhance its technology, its existing games, and its marketing and other services, and to timely introduce new game products and services in order for it to adapt to industry trends and shifting demands of game players and advertising clients and to remain competitive.
If we fail to promote our brands successfully or if our users or advertisers do not perceive our content and services to be of high quality, we may not be able to continue growing our business and attracting users, customers, and online game players. Our failure to keep up with rapid technology changes may severely affect our future success.
If we fail to promote our brands successfully or if our users or advertisers do not perceive our content and services to be of high quality, we may not be able to continue growing our business and attracting users, advertising customers, and online game players. Our failure to keep up with rapid technology changes may severely affect our future success.
The Internet industry is undergoing rapid technological changes. Our future success will depend on our ability to respond to evolving technologies, such as emerging artificial intelligence technology, adapt our services to changing industry standards and improve the performance and reliability of our services. If we fail to adapt to such changes, our business may be adversely affected.
The Internet industry is undergoing rapid technological changes. Our future success will depend on our ability to respond to evolving technologies, such as emerging artificial intelligence (“AI”) technology, adapt our services to changing industry standards and improve the performance and reliability of our services. If we fail to adapt to such changes, our business may be adversely affected.
Conversely, if the RMB appreciates relative to the U.S. dollar, our revenues as expressed in our U.S. dollar financial statements will appreciate in value, while not illustrating fully the relative strength of our operating results following such appreciation compared to prior periods. In 2022, 2023 and 2024, the RMB exchange rate against the U.S. dollar depreciated significantly.
Conversely, if the RMB appreciates relative to the U.S. dollar, our revenues as expressed in our U.S. dollar financial statements will appreciate in value, while not illustrating fully the relative strength of our operating results following such appreciation compared to prior periods. In 2023 and 2024, the RMB exchange rate against the U.S. dollar depreciated significantly.
For example, certain third parties have misappropriated the source codes of previous versions of TLBB and have set up unauthorized servers in the Chinese mainland and elsewhere to operate TLBB to compete with Changyou. The existence of unauthorized servers may attract game players away from Changyou’s games and may result in decreases in Changyou’s revenues.
For example, certain third parties have misappropriated the source codes of previous versions of TLBB PC and have set up unauthorized servers in the Chinese mainland and elsewhere to operate TLBB PC to compete with Changyou. The existence of unauthorized servers may attract game players away from Changyou’s games and may result in decreases in Changyou’s revenues.
We believe that, for our business to be successful when our content and services are delivered over mobile devices, we need to design, develop, promote and operate products and applications that are attractive to users of such devices, as well as enhance targeted delivery of our content and advertising services to our users and advertising customers.
We believe that, for our business to be successful when our content and services are delivered over mobile devices, we need to design, develop, promote and operate products and applications that are attractive to users of such devices, as well as enhance targeted delivery of our content and marketing services to our users and advertising customers.
The Real-name Registration Notice’s main focus is to prevent minors from using an adult’s identity to play Internet games and, accordingly, provides stringent punishment for online game operators for not implementing the anti-fatigue and real name registration measures properly and effectively.
The Real-name Registration Notice’s main focus is to prevent minors from using an adult’s identity to play online games and, accordingly, provides stringent punishment for online game operators for not implementing the anti-fatigue and real name registration measures properly and effectively.
Each of these provisions may make it more difficult for a third party to gain control of our board in connection with, or obtain any necessary shareholder approval for, a proposed acquisition or change in control.
Each of these provisions may make it more difficult for a third party to gain control of our Board of Directors in connection with, or obtain any necessary shareholder approval for, a proposed acquisition or change in control.
In response to such migration, Changyou has devoted and Changyou expects to continue to devote substantial resources to the development of its mobile games as a critical component of its business strategy, and Changyou has launched multiple mobile games, such as the mobile games TLBB 3D and Legacy TLBB Mobile.
In response to such migration, Changyou has devoted and Changyou expects to continue to devote substantial resources to the development of its mobile games as a critical component of its business strategy, and Changyou has launched multiple mobile games, such as Legacy TLBB Mobile.
In addition, Sohu’s businesses are operated under various Internet platforms, such as sohu.com, and focus.cn, but current laws and regulations of the Chinese mainland are lack of clear provisions indicating whether it is permissible to provide video services over several Internet platforms that are owned by a single company under one permit and the NRTA might claim that such operation under one permit is not allowed under the Provisions on the Administration of Private Network and Targeted Communication Audiovisual Program Services .
In addition, Sohu’s businesses are operated under various Internet platforms, such as sohu.com, but current laws and regulations of the Chinese mainland are lack of clear provisions indicating whether it is permissible to provide video services over several Internet platforms that are owned by a single company under one permit and the NRTA might claim that such operation under one permit is not allowed under the Provisions on the Administration of Private Network and Targeted Communication Audiovisual Program Services .
If the SEC or a court were to determine, or if the staff of the SEC (the “SEC Staff”) were to take a position, that the current, or any future, mix of our assets consisting of cash and cash equivalents, short-term investments, long-term time deposits, and long-term investments could cause us to be an “investment company” under the Investment Company Act of 1940, in order to avoid such designation we could be required to place a relatively larger portion of such assets than we do at present in low-return investments.
If the SEC or a court were to determine, or if the SEC Staff were to take a position, that the current, or any future, mix of our assets consisting of cash and cash equivalents, short-term investments, long-term time deposits, and long-term investments could cause us to be an “investment company” under the Investment Company Act of 1940, in order to avoid such designation we could be required to place a relatively larger portion of such assets than we do at present in low-return investments.
If our assets consisting of certificates of deposit are considered to be “cash items” for purposes of Section 3(a)(1)(C) of the Investment Company Act without regard to their maturity dates, which we believe is the correct treatment of such assets, then our investment securities represented less than 40% of the value of our total assets, exclusive of Government securities and cash items, as of December 31, 2024 and as of the date of the filing of this annual report.
If our assets consisting of certificates of deposit are considered to be “cash items” for purposes of Section 3(a)(1)(C) of the Investment Company Act without regard to their maturity dates, which we believe is the correct treatment of such assets, then our investment securities represented less than 40% of the value of our total assets, exclusive of Government securities and cash items, as of December 31, 2025 and as of the date of the filing of this annual report.
The Notice on Preventing M inors From Indulging in Online Games (the “Indulgence Prevention Notice”), which the SAPPRFT issued on October 25, 2019 and became effective on November 1, 2019, requires online game operators to implement measures to not give minors access to online game services during specified periods of the day, imposes daily limits on minors’ length of use and spending for paid online game services, and prohibits online game operators from providing paid game services to minors under the age of eight.
The Notice on Preventing M inors From Indulging in Online Games (the “Indulgence Prevention Notice”), which the NPPA issued on October 25, 2019 and became effective on November 1, 2019, requires online game operators to implement measures to not give minors access to online game services during specified periods of the day, imposes daily limits on minors’ length of use and spending for paid online game services, and prohibits online game operators from providing paid game services to minors under the age of eight.
See “Governmental Regulation and Legal Uncertainties – Specific Statutes and Regulations – Miscellaneous – Laws and Regulations Related to Security and Censorship.” 19 Table of Contents Any failure, or perceived failure, by us, or by our partners, to maintain the security of our user data or to comply with applicable Chinese mainland or Offshore privacy, data security and personal information protection laws, regulations, policies, contractual provisions, industry standards and other requirements may result in civil or regulatory liability, including regulatory or data protection authority enforcement actions and investigations, fines, penalties, enforcement orders requiring us to cease operating in a certain way, litigation or adverse publicity, and may require us to expend significant resources in responding to and defending allegations and claims against us.
See “Governmental Regulation and Legal Uncertainties – Specific Statutes and Regulations – Miscellaneous – Laws and Regulations Related to Security and Censorship.” Any failure, or perceived failure, by us, or by our partners, to maintain the security of our user data or to comply with applicable Chinese mainland or Offshore privacy, data security and personal information protection laws, regulations, policies, contractual provisions, industry standards and other requirements may result in civil or regulatory liability, including regulatory or data protection authority enforcement actions and investigations, fines, penalties, enforcement orders requiring us to cease operating in a certain way, litigation or adverse publicity, and may require us to expend significant resources in responding to and defending allegations and claims against us.
For a detailed discussion of Chinese mainland regulations, notices and circulars with respect to such restrictions, see “Governmental Regulation and Legal Uncertainties - Specific Statutes and Regulations - Regulation of Foreign Direct Investment in Value-Added Telecommunications Companies” and “Governmental Regulation and Legal Uncertainties - Specific Statutes and Regulations - Regulation of Online Game Services - Online Games and Cultural Products.” 25 Table of Contents In addition, pursuant to the Notice on Establishing a Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (“Circular 6”), which was promulgated by the General Office of the State Council in February 2011, a security review is required for mergers and acquisitions by foreign investors having “national defense and security” concerns and mergers and acquisitions by which foreign investors may acquire “de facto control” of domestic enterprises with “national security” concerns.
For a detailed discussion of Chinese mainland regulations, notices and circulars with respect to such restrictions, see “Governmental Regulation and Legal Uncertainties - Specific Statutes and Regulations - Regulation of Foreign Direct Investment in Value-Added Telecommunications Companies” and “Governmental Regulation and Legal Uncertainties - Specific Statutes and Regulations - Regulation of Online Game Services - Online Games and Cultural Products.” In addition, pursuant to the Notice on Establishing a Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors (“Circular 6”), which was promulgated by the General Office of the State Council in February 2011, a security review is required for mergers and acquisitions by foreign investors having “national defense and security” concerns and mergers and acquisitions by which foreign investors may acquire “de facto control” of domestic enterprises with “national security” concerns.
The Platform Guidelines stipulate that any business combinations or acquisitions of control (“Concentrations of Undertakings”) involving VIE structures fall within the scope of anti-monopoly review.
The Platform Economy Guidelines stipulate that any business combinations or acquisitions of control (“Concentrations of Undertakings”) involving VIE structures fall within the scope of anti-monopoly review.
For example, Changyou developed and it operates its PC game TLBB and its mobile games TLBB 3D, Legacy TLBB Mobile, and New TLBB Mobile with various features that are included in reliance on rights under its existing license agreements with respect to the late Chinese martial arts author Louis Cha’s popular novel Tian Long Ba Bu.
For example, Changyou developed and it operates its PC games TLBB PC and TLBB: Return, and its mobile games TLBB 3D, Legacy TLBB Mobile, and New TLBB Mobile with various features that are included in reliance on rights under its existing license agreements with respect to the late Chinese martial arts author Louis Cha’s popular novel Tian Long Ba Bu.
As the brand advertising market is effectively controlled by a small number of large advertising agencies, such advertising agencies may be in a position to demand higher sales rebates based on increased bargaining power, or to delay payments to us, which could negatively affect our brand advertising growth and the timing of our collection of payments.
As the brand advertising market is effectively controlled by a small number of large advertising agencies, such advertising agencies may be in a position to demand higher sales rebates based on increased bargaining power, or to delay payments to us, which could negatively affect our marketing services’ growth and the timing of our collection of payments.
If we are unable to expend the resources at a level necessary to self-develop or acquire the rights to, and provide on our platforms, quality content, we may not be able to compete effectively against these other popular content and service providers, or maintain or increase the level of our user traffic, which could make our platforms less attractive to advertisers, have a negative impact on our ability to generate revenues, and make it difficult for us to stem our losses from operation of our brand advertising services or to recoup our expenditures.
If we are unable to expend the resources at a level necessary to self-develop or acquire the rights to, and provide on our platforms, quality content, we may not be able to compete effectively against these other popular content and service providers, or maintain or increase the level of our user traffic, which could make our platforms less attractive to advertisers, have a negative impact on our ability to generate revenues, and make it difficult for us to stem our losses from operation of our marketing services or to recoup our expenditures.
Various regulatory authorities in the Chinese mainland, such as the State Council, the MIIT, the SPPA, the MCT and the MPS, have the power to issue and implement regulations governing various aspects of the online game industry. Changyou is required to obtain applicable permits and approvals and file registrations with different regulatory authorities in order to operate its online games.
Various regulatory authorities in the Chinese mainland, such as the State Council, the MIIT, the NPPA, the MCT and the MPS, have the power to issue and implement regulations governing various aspects of the online game industry. Changyou is required to obtain applicable permits and approvals and file registrations with different regulatory authorities in order to operate its online games.
The Cyberspace Administration of China (the “CAOC”) issued a series of regulations and administrative measures regulating Internet users’ social accounts accessible by the public, group information platforms, BBS communities, and news information platforms, which require Internet platform operators to establish specific management rules for their platforms, and subject them to various specific obligations.
The Cyberspace Administration of China (the “CAC”) issued a series of regulations and administrative measures regulating Internet users’ social accounts accessible by the public, group information platforms, BBS communities, and news information platforms, which require Internet platform operators to establish specific management rules for their platforms, and subject them to various specific obligations.
If the status of certain of our Chinese mainland subsidiaries and the VIEs as “HNTEs” or “Software Enterprises” is revoked or expires, we may have to pay additional taxes or make up any previously unpaid tax and may be subject to a higher tax rate, which would adversely affect our results of operations.
If the status of certain of our Chinese mainland subsidiaries and the VIEs as “HNTEs” is revoked or expires, we may have to pay additional taxes or make up any previously unpaid tax and may be subject to a higher tax rate, which would adversely affect our results of operations.
For example, in order to distribute games through the Internet in the Chinese mainland, the VIEs through which Changyou conducts its businesses under the VIE arrangements must obtain an ICP license from the MIIT and an Online publishing service license from the SPPA. Any online game Changyou operates needs to be approved by the SPPA prior to its launch.
For example, in order to distribute games through the Internet in the Chinese mainland, the VIEs through which Changyou conducts its businesses under the VIE arrangements must obtain an ICP license from the MIIT and an online publishing service license from the NPPA. Any online game Changyou operates needs to be approved by the NPPA prior to its launch.
In July 2014, the SAPPRFT issued the Notice on Further Carrying out the Verification of Real-name Registration for Anti-Fatigue System on Internet Games (the “Verification of Real-name Registration Notice”), stating that, in view of some of the hardware and functionality limitations inherent in mobile devices, anti-fatigue system requirements applicable to Internet games do not currently apply to mobile games.
In July 2014, the SAPPRFT issued the Notice on Further Carrying out the Verification of Real-name Registration for Anti-Fatigue System on Online Games (the “Verification of Real-name Registration Notice”), stating that, in view of some of the hardware and functionality limitations inherent in mobile devices, anti-fatigue system requirements applicable to online games do not currently apply to mobile games.
The State Administration of Press, Publication, Radio, Film and Television (the “SAPPRFT”), which in March 2018 was reorganized into three separate regulatory authorities in the Chinese mainland - the NRTA, the NFA, and the State Press Publication Administration (the “SPPA”), prior to March 31, 2018 published, and one or more of those successor entities have published or can be expected to publish, from time to time lists of content that they consider objectionable, and we must dedicate teams of employees to continually monitor user-uploaded content and remove content that is deemed objectionable.
The State Administration of Press, Publication, Radio, Film and Television (the “SAPPRFT”), which in March 2018 was reorganized into three separate regulatory authorities in the Chinese mainland - the NRTA, the NFA, and the National Press and Publication Administration (the “NPPA”), prior to March 31, 2018 published, and one or more of those successor entities have published or can be expected to publish, from time to time lists of content that they consider objectionable, and we must dedicate teams of employees to continually monitor user-uploaded content and remove content that is deemed objectionable.
Given the competitive nature of the industry, and in particular our competitors’ increasingly aggressive efforts to provide competitive compensation packages to attract talent in the core Chinese markets where we operate, the risk of key technology staff leaving Sohu is high and could have a disruptive impact on our operations.
Given the competitive nature of the industry, and in particular our competitors’ increasingly aggressive efforts to provide competitive compensation packages to attract talent in the core Chinese markets where we operate, the risk of key technology staff leaving our company is high and could have a disruptive impact on our operations.
Changyou’s online game revenues are collected through the online sale of game points and sale of its prepaid cards, which are considered to be the “virtual currency” as such term is defined in the Notice on Strengthening the Administration of Online Game Virtual Currency , or the Virtual Currency Notice, which was jointly issued by the MCT and the MOFCOM in 2009.
Changyou’s online game revenues are collected through the online sale of game points and sale of its prepaid cards, which are considered to be the “virtual currency” as such term is defined in the Notice on Strengthening the Administration of Online Game Virtual Currency (the “Virtual Currency Notice”), which was jointly issued by the MCT and the MOFCOM in 2009.
Tax laws and regulations of the Chinese mainland provide that enterprises established outside of the Chinese mainland whose “de facto management bodies” are located within the Chinese mainland are considered “resident enterprises” and are generally subject to the uniform 25% enterprise income tax rate on their worldwide income (including dividend income received from subsidiaries).
Tax laws and regulations of the Chinese mainland provide that enterprises established outside of the Chinese mainland whose “de facto management bodies” are located within the Chinese mainland are considered “resident enterprises” and are generally subject to the uniform 25% corporate income tax rate on their worldwide income (including dividend income received from subsidiaries).
We believe that we may have been classified as a passive foreign investment company (a “PFIC”), for our 2024 taxable year, which would likely result in adverse United States federal income tax consequences to U.S. holders of our ADSs or ordinary shares.
We believe that we may have been classified as a passive foreign investment company (a “PFIC”), for our 2025 taxable year, which would likely result in adverse United States federal income tax consequences to U.S. holders of our ADSs or ordinary shares.
In addition, the SPPA, a successor agency to SAPPRFT, first delayed, and then suspended, its review of, and issuance of publishing and authorization codes for, online games, as was the case between April 2018 and December 2018; continued to delay such review and issuance during 2019; and again delayed the issuance of publishing and authorization codes for online games between July 2021 and April 2022.
In addition, the NPPA, a successor agency to SAPPRFT, first delayed, and then suspended, its review of, and issuance of publishing and authorization codes for, online games, as was the case between April 2018 and December 2018; continued to delay such review and issuance during 2019; and again delayed the issuance of publishing and authorization codes for online games between July 2021 and April 2022.
Some of these risks relate to our ability to: • build our businesses successfully; • continue to attract users to remain with us and use our products and services; • continue to attract a large audience to our matrices and services by expanding the type and technical sophistication of the content and services we offer; • maintain and develop a sufficiently large advertiser base for our brand advertising business; • maintain and attract online game users by timely updating our existing online games and developing and launching new online games; • effectively control our costs and expenses; and • attract and retain qualified personnel.
Some of these risks relate to our ability to: • build our businesses successfully; • continue to attract users to remain with us and use our products and services; • continue to attract a large audience to our matrices and services by expanding the type and technical sophistication of the content and services we offer; • maintain and develop a sufficiently large advertiser base for our marketing services business; • maintain and attract online game users by timely updating our existing online games and developing and launching new online games; • effectively control our costs and expenses; and • attract and retain qualified personnel.
We believe that we may have been classified as a PFIC for United States federal income tax purposes for our taxable year ended November 30, 2024. There can be no assurance that we will not continue to be classified as a PFIC in the current taxable year or in any future taxable year.
We believe that we may have been classified as a PFIC for United States federal income tax purposes for our taxable year ended November 30, 2025. There can be no assurance that we will not continue to be classified as a PFIC in the current taxable year or in any future taxable year.
Many advertisers allocate their online advertising budgets primarily to advertising on mobile devices, and the forms of advertising change rapidly.
Many advertisers allocate their online marketing budgets primarily to advertising on mobile devices, and the forms of advertising change rapidly.
The Measures of Internet Publication Service Administration issued by the SAPPRFT and the MIIT, or the New Internet Publication Measures, which became effective on March 10, 2016 and replaced the Temporary Measures for Internet Publication Administration that had become effective in 2002, require that entities in the Internet publishing business apply for an online publishing service license, instead of an Internet publishing license, that entities holding an Internet publishing license apply for an online publishing service license within a specified period of time to replace their Internet publishing license, and that all such entities obtain approval from the SAPPRFT prior to the publication of new online games.
The Measures of Internet Publication Service Administration issued by the SAPPRFT and the MIIT (the “New Internet Publication Measures”), which became effective on March 10, 2016 and replaced the Temporary Measures for Internet Publication Administration that had become effective in 2002, require that entities in the Internet publishing business apply for an online publishing service license, instead of an Internet publishing license, that entities holding an Internet publishing license apply for an online publishing service license within a specified period of time to replace their Internet publishing license, and that all such entities obtain approval from the SAPPRFT prior to the publication of new online games.
GAAP) in the VIEs, and our ability to conduct our business, and our financial condition and results of operations, would be severely adversely affected. 27 Table of Contents The contractual arrangements between our subsidiaries and the VIEs that conduct a significant portion of our operations may result in adverse tax consequences.
GAAP) in the VIEs, and our ability to conduct our business, and our financial condition and results of operations, would be severely adversely affected. 28 Table of Contents The contractual arrangements between our subsidiaries and the VIEs that conduct a significant portion of our operations may result in adverse tax consequences.
Any of these would have an adverse effect on our brand advertising revenues; • The acceptance of the Internet as a medium for advertising depends on the development of standards for measuring the effectiveness of advertisements disseminated over the Internet, and no standards have been widely accepted for the measurement of the effectiveness of brand advertising over the Internet.
Any of these would have an adverse effect on our marketing services revenues; • The acceptance of the Internet as a medium for advertising depends on the development of standards for measuring the effectiveness of advertisements disseminated over the Internet, and no standards have been widely accepted for the measurement of the effectiveness of brand advertising over the Internet.
If the SPPA challenges the commercial operation of any of Changyou’s games that are operated with Internet authorization codes obtained through third-party publishing entities, Changyou may be subject to various penalties, including restrictions on its operations.
If the NPPA challenges the commercial operation of any of Changyou’s games that are operated with Internet authorization codes obtained through third-party publishing entities, Changyou may be subject to various penalties, including restrictions on its operations.
See “Governmental Regulation and Legal Uncertainties - Specific Statutes and Regulations - Regulation of the Provision of Internet Content - Internet Information Services” and “Governmental Regulation and Legal Uncertainties - Specific Statutes and Regulations - Regulation of the Provision of Internet Content - Online News Dissemination and Online News Search Services” for further descriptions of the Internet platform operators’ obligations as required by several administrative measures issued by the CAOC.
See “Governmental Regulation and Legal Uncertainties - Specific Statutes and Regulations - Regulation of the Provision of Internet Content - Internet Information Services” and “Governmental Regulation and Legal Uncertainties - Specific Statutes and Regulations - Regulation of the Provision of Internet Content - Online News Dissemination and Online News Search Services” for further descriptions of the Internet platform operators’ obligations as required by several administrative measures issued by the CAC.
From time to time we have held, and as of December 31, 2024 and as of the date of the filing of this annual report we hold, assets consisting of significant amounts of cash and cash equivalents and short-term investments, and a relatively smaller amount of assets consisting of long-term time deposits and long-term investments.
From time to time we have held, and as of December 31, 2025 and as of the date of the filing of this annual report we hold, assets consisting of significant amounts of cash and cash equivalents and short-term investments, and a relatively smaller amount of assets consisting of long-term time deposits and long-term investments.
As a result, we were not identified by the SEC as a Commission-Identified Issuer in 2023 and 2024.
As a result, we were not identified by the SEC as a Commission-Identified Issuer in 2023, 2024 and 2025.
Under the Implementing Regulations for the Corporate Income Tax Law , Chinese mainland income tax at the rate of 10% is applicable to dividends payable to investors that are “non-resident enterprises,” not having an establishment or place of business in the Chinese mainland, or which do have such establishment or place of business but whose relevant income is not effectively connected with the establishment or place of business, to the extent that such dividends have their sources within the Chinese mainland.
Under the CIT Law Implementing Regulations, Chinese mainland income tax at the rate of 10% is applicable to dividends payable to investors that are “non-resident enterprises,” not having an establishment or place of business in the Chinese mainland, or which do have such establishment or place of business but whose relevant income is not effectively connected with the establishment or place of business, to the extent that such dividends have their sources within the Chinese mainland.
If Changyou’s data systems were damaged by system failure, network interruption, or virus infection, or attacked by a hacker, the integrity of data would be compromised, which could adversely affect its revenue recognition and the completeness and accuracy of its recognized revenues. 55 Table of Contents Changyou regularly updates its existing virtual items and designs new virtual items and may also adjust prices.
If Changyou’s data systems were damaged by system failure, network interruption, or virus infection, or attacked by a hacker, the integrity of data would be compromised, which could adversely affect its revenue recognition and the completeness and accuracy of its recognized revenues. Changyou regularly updates its existing virtual items and designs new virtual items and may also adjust prices.
We have many competitors in the Internet market in the Chinese mainland, including 58.com, Alibaba, Archosaur, Autohome, Baidu, Bilibili, BitAuto, Century Huatong (formerly known as Shanda), Cheetah Mobile, Douyin, Douyu, Giant, Hello Group, Huya, IGG, iQIYI, JD, JOYY, Kingsoft, Kuaishou, Leju, Lilith, Mango TV, Meituan, miHoYo, NetDragon, NetEase, Perfect World, Phoenix, Pinduoduo, Rednote, Sina, Tencent, Tencent Music Entertainment, TouTiao, VIPS, Weibo, Xiaomi, and Youku.
We have many competitors in the Internet market in the Chinese mainland, including 37 Interactive, 58.com, Alibaba, Archosaur, Autohome, Baidu, Bilibili, BitAuto, Century Huatong (formerly known as Shanda), Cheetah Mobile, Douyin, Douyu, Giant, G-bits, Hello Group, Huya, IGG, iQIYI, JD, JOYY, Kingsoft, Kuaishou, Leju, Lilith, Mango TV, Meituan, miHoYo, NetDragon, NetEase, Perfect World, Phoenix, Pinduoduo, Rednote, Sina, Tencent, Tencent Music Entertainment, TouTiao, VIPS, Weibo, Xiaomi, and Youku.
In addition, advertisers may choose not to advertise on the Internet or on Changyou’s 17173.com Website because of the use by third parties of Internet advertisement blocking software. Changyou relies on advertising agencies to sell online advertising services on the 17173.com Website.
In addition, advertisers may choose not to advertise on the Internet or on Changyou’s 17173.com Website because of the use by third parties of Internet advertisement blocking software. Changyou relies on advertising agencies to sell marketing services on the 17173.com Website.
Our current and potential advertising clients may not devote a significant portion of their advertising budgets to Internet-based advertising in general, or to us in particular; • Changes in regulatory policy could restrict or curtail our brand advertising services.
Our current and potential advertising clients may not devote a significant portion of their marketing budgets to Internet-based advertising in general, or to us in particular; • Changes in regulatory policy could restrict or curtail our marketing services, and our advertising services in particular.
The expansion of Internet advertisement blocking measures may result in a decrease in our advertising revenues. The development of Web software that blocks Internet advertisements before they appear on a user’s screen may hinder the growth of online advertising.
The expansion of Internet advertisement blocking measures may result in a decrease in our marketing services revenues. The development of Web software that blocks Internet advertisements before they appear on a user’s screen may hinder the growth of online advertising.
For a discussion of these Chinese mainland national security review requirements, see “Governmental Regulation and Legal Uncertainties - Specific Statutes and Regulations - Miscellaneous - Regulation of M&A and Overseas Listings.” The Law of the People’s Republic of China on Foreign Investment (the “Foreign Investment Law”) currently does not explicitly categorize contractual arrangements as a form of foreign investment.
For a discussion of these Chinese mainland national security review requirements, see “Governmental Regulation and Legal Uncertainties - Specific Statutes and Regulations - Miscellaneous - Regulation of M&A and Overseas Listings.” 26 Table of Contents The Law of the People’s Republic of China on Foreign Investment (the “Foreign Investment Law”) currently does not explicitly categorize contractual arrangements as a form of foreign investment.
Some of these measures, such as interest rate adjustments aimed at preventing the economy from overheating or developing chaotically, could benefit the Chinese mainland’s overall economy but have an adverse effect on us. 29 Table of Contents The evolving legal system of the Chinese mainland presents uncertainties, which could limit the legal protections available to us and you .
Some of these measures, such as interest rate adjustments aimed at preventing the economy from overheating or developing chaotically, could benefit the Chinese mainland’s overall economy but have an adverse effect on us. The evolving legal system of the Chinese mainland presents uncertainties, which could limit the legal protections available to us and you .
Changyou may fail to anticipate and adapt to future technical trends, new business models and changed game player preferences and requirements, fail to effectively plan and organize marketing and promotion activities, or fail to differentiate its new games from its existing games.
Changyou may fail to anticipate and adapt to future technological trends, new business models and changed game player preferences and requirements, fail to effectively plan and organize marketing and promotion activities, or fail to differentiate its new games from its existing games.
It has been, and can be expected to continue to be, necessary for us to invest financial, operational, strategic, technological, personnel, and other resources in our brand advertising services. Over the past few years, traffic and user acquisition costs have remained at a high level and have adversely affected our operating results.
It has been, and can be expected to continue to be, necessary for us to invest financial, operational, strategic, technological, personnel, and other resources in our marketing services. Over the past few years, traffic and user acquisition costs have remained at a high level and have adversely affected our operating results.
Any failure to obtain such advance approval could subject us to severe penalties. 32 Table of Contents On February 17, 2023, the CSRC adopted the Trial Measures for the Administration of Overseas Securities Offerings and Listings by Chinese Mainland Domestic Companies (the “Overseas Listing Measures”) , which took effect on March 31, 2023.
Any failure to obtain such advance approval could subject us to severe penalties. On February 17, 2023, the CSRC adopted the Trial Measures for the Administration of Overseas Securities Offerings and Listings by Chinese Mainland Domestic Companies (the “Overseas Listing Measures”) , which took effect on March 31, 2023.
If we are required under the Implementing Regulations for the Corporate Income Tax Law to withhold Chinese mainland income tax on dividends payable to our non-Chinese mainland investors that are “non-resident enterprises,” or if you are required to pay Chinese mainland income tax on the transfer of our ADSs, the value of your investment in our ADSs may be materially and adversely affected.
If we are required under the CIT Law Implementing Regulations to withhold Chinese mainland income tax on dividends payable to our non-Chinese mainland investors that are “non-resident enterprises,” or if you are required to pay Chinese mainland income tax on the transfer of our ADSs, the value of your investment in our ADSs may be materially and adversely affected.
As the brand advertising market in the Chinese mainland is effectively controlled by a small number of large advertising agencies, such advertising agencies may be in a position to demand higher sales rebates or to delay payments to us, which would adversely affect our gross margin. Most of our brand advertising services are distributed by advertising agencies.
As the brand advertising market in the Chinese mainland is effectively controlled by a small number of large advertising agencies, such advertising agencies may be in a position to demand higher sales rebates or to delay payments to us, which would adversely affect our gross margin. Most of our brand advertisement offerings are distributed by advertising agencies.
The HFCAA, among other things, directs the SEC to prohibit trading on U.S. stock exchanges and in the U.S. over-the-counter markets the securities of foreign-based companies if their financial statements are audited by accounting firms that the PCAOB determines it has been unable to inspect or investigate completely for a period of two consecutive audit years (“Non-Inspection Years”), because of a position taken by the authorities in a foreign jurisdiction in which the accounting firms are based (each accounting firm so determined by the PCAOB, a “PCAOB-Identified Firm”).
The HFCAA, among other things, directs the SEC to prohibit trading on U.S. stock exchanges and in the U.S. over-the-counter markets the securities of foreign-based companies if their financial statements are audited by accounting firms that the PCAOB determines it has been unable to inspect or investigate completely for a period of two consecutive audit years (“Non-Inspection Years”), because of a position taken by an authority in any foreign jurisdiction (each accounting firm so determined by the PCAOB, a “PCAOB-Identified Firm”).
The Micro-short Drama Notice stipulates that online audiovisual platform operators, such as us, are responsible for content management and review for certain micro-short dramas with a total investment of less than RMB300,000 (or approximately $42,146) that are not identified as highly recommended for purposes of marketing and business promotion on their platforms or otherwise specifically promoted on their home page or screen.
The Micro-short Drama Notice stipulates that online audiovisual platform operators, such as us, are responsible for content management and review for certain micro-short dramas with a total investment of less than RMB300,000 (or approximately $41,992) that are not identified as highly recommended for purposes of marketing and business promotion on their platforms or otherwise specifically promoted on their home page or screen.
See “Governmental Regulation and Legal Uncertainties - Specific Statutes and Regulations - Regulation of the Provision of Internet Content - Online Cultural Products.” Regulations relating to Offshore investment activities by residents of the Chinese mainland may limit our ability to acquire Chinese mainland-based companies and could adversely affect our business.
See “Governmental Regulation and Legal Uncertainties - Specific Statutes and Regulations - Regulation of the Provision of Internet Content - Online Cultural Products.” 37 Table of Contents Regulations relating to Offshore investment activities by residents of the Chinese mainland may limit our ability to acquire Chinese mainland-based companies and could adversely affect our business.
For example, an increase in the estimated lives of these perpetual virtual items would increase the period over which revenues from these items are recognized. Changyou relies on its data systems to record and monitor the purchase and consumption of virtual items by its game players and the types of virtual items purchased.
For example, an increase in the estimated lives of these perpetual virtual items would increase the period over which revenues from these items are recognized. 55 Table of Contents Changyou relies on its data systems to record and monitor the purchase and consumption of virtual items by its game players and the types of virtual items purchased.
If the SPPA, as a successor agency to the SAPPRFT, in the future decides to expand the anti-fatigue system requirements to mobile games, Changyou’s operating expenses would be likely to increase.
If the NPPA, as a successor agency to the SAPPRFT, in the future decides to expand the anti-fatigue system requirements to mobile games, Changyou’s operating expenses would be likely to increase.
As a result, our online advertising business will suffer if we do not optimize, adapt, and make attractive our various product and service offerings for access on mobile devices and effectively deliver advertising content in a manner that attracts and retains users’ interest and attention.
As a result, our marketing services business will suffer if we do not optimize, adapt, and make attractive our various product and service offerings for access on mobile devices and effectively deliver advertising content in a manner that attracts and retains users’ interest and attention.
Since our advertising revenues are generally based on user views, the expansion of advertisement blocking on the Internet may decrease our advertising revenues because, when an advertisement is blocked, it is not downloaded from the server, which means such advertisements will not be tracked as a delivered advertisement.
Since our marketing services revenues are generally based on user views, the expansion of advertisement blocking on the Internet may decrease our marketing services revenues because, when an advertisement is blocked, it is not downloaded from the server, which means such advertisements will not be tracked as a delivered advertisement.
Moreover, if we fail to produce by ourselves or acquire from third parties high-quality video content, or if video content we develop by ourselves or acquire proves to be less attractive to users than we anticipated, our user traffic and our market share could be adversely effected, which could result in our being unable to maintain or increase our video revenues. 22 Table of Contents Videos and other types of content and materials displayed on our Internet platforms may be found objectionable by regulatory authorities in the Chinese mainland, may subject us to penalties and other administrative actions, and may be subject us to liabilities for infringement of third-party intellectual property rights or other allegations.
Moreover, if we fail to produce by ourselves or acquire from third parties high-quality video content, or if video content we develop by ourselves or acquire proves to be less attractive to users than we anticipated, our user traffic and our market share could be adversely effected, which could result in our being unable to maintain or increase our video revenues. 23 Table of Contents Videos and other types of content and materials displayed on our Internet platforms, or on public accounts registered and operated by us on third-party Internet platforms, may be found objectionable by regulatory authorities in the Chinese mainland, may subject us to penalties and other administrative actions, and may subject us to liabilities for infringement of third-party intellectual property rights or other allegations.
Changyou’s online advertising services, which are provided through its 17173.com website (the “17173 Website”) in the Chinese mainland, also face intense competition. Changyou competes with other game information portals, such as games.sina.com.cn, operated by Sina Corporation, as well as other Internet portals.
Changyou’s marketing services, which are provided through its 17173.com website (the “17173.com Website”) in the Chinese mainland, also face intense competition. Changyou competes with other game information portals, such as games.sina.com.cn, operated by Sina Corporation, as well as other Internet portals.
The Ministry of Culture and Tourism of the People’s Republic of China (the “MCT”) issued an Online Performance Notice , which became effective on July 1, 2016, and issued the Online Performance Measures, which became effective on January 1, 2017; the CAOC issued the Provisions on the Administration of Online Live Social Video Services (the “Live Social Video Provisions”), which became effective on December 1, 2016; and the MIIT and several other regulatory authorities in the Chinese mainland issued a Notice on Strengthening the Administration of Live Online Social Video Services on August 1, 2018, providing for the administration and censorship of live broadcasting.
The Ministry of Culture and Tourism of the People’s Republic of China (the “MCT”) issued the Online Performance Notice , which became effective on July 1, 2016, and issued the Online Performance Measures, which became effective on January 1, 2017; the CAC issued the Provisions on the Administration of Online Live Social Video Services (the “Live Social Video Provisions”), which became effective on December 1, 2016; and the MIIT and several other regulatory authorities in the Chinese mainland issued the Notice on Strengthening the Administration of Live Online Social Video Services on August 1, 2018, providing for the administration and censorship of live broadcasting.
For example, the revenues generated from Changyou’s mobile game Legacy TLBB Mobile, which was launched in May 2017, declined sequentially from 2018 through 2024, which is typical for mobile games.
For example, the revenues generated from Changyou’s mobile game Legacy TLBB Mobile, which was launched in May 2017, declined sequentially from 2018 through 2025, which is typical for mobile games.
If current trends of consolidation of advertising agencies in the Chinese mainland market continue, the bargaining power of the large advertising agencies resulting from such consolidation may permit them to require that Changyou pay higher sales rebates, which would adversely affect Changyou’s online advertising revenues.
If current trends of consolidation of advertising agencies in the Chinese mainland market continue, the bargaining power of the large advertising agencies resulting from such consolidation may permit them to require that Changyou pay higher sales rebates, which would adversely affect Changyou’s marketing services revenues.
For example, a third-party Internet platform operator might provide its users access to video content on our Internet platforms while blocking Internet advertisements embedded in our video content, which could adversely affect our advertising revenues and our reputation with our current and potential advertising clients.
For example, a third-party Internet platform operator might provide its users access to video content on our Internet platforms while blocking Internet advertisements embedded in our video content, which could adversely affect our marketing services revenues and our reputation with our current and potential marketing services clients.

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Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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The majority of our products and services are provided in the Chinese mainland across multiple Internet-enabled devices such as mobile phones, tablets, and PCs, through the mobile phone applications Sohu News App and Sohu Video App, the mobile portal m.sohu.com, and the PC portal www.sohu.com.
The majority of our products and services are provided in the Chinese mainland across multiple Internet-enabled devices such as mobile phones, tablets, and PCs, through the mobile phone applications Sohu News App and Sohu Video App, the mobile portal m.sohu.com, and the PC portal www.sohu.com.
Other Sohu Business Sohu’s other business consists primarily of paid subscription services, interactive broadcasting services, and revenue sharing from other platforms. Revenues generated by Sohu from the other business are classified as other revenues in our consolidated statements of comprehensive income.
Other Sohu Business Sohu’s other business consists primarily of paid subscription services, revenue sharing from other platforms, and interactive broadcasting services. Revenues generated by Sohu from the other business are classified as other revenues in our consolidated statements of comprehensive income.
March 2009 SAPPRFT notice requires the operators of audiovisual websites to enhance their processes for protecting copyrights, and to take appropriate measures to protect the rights and interests of copyright holders. Operators of such sites must hold, or have a license to, the copyright to all content that they transmit.
The March 2009 SAPPRFT Notice requires the operators of audiovisual websites to enhance their processes for protecting copyrights, and to take appropriate measures to protect the rights and interests of copyright holders. Operators of such sites must hold, or have a license to, the copyright to all content that they transmit.
However, on September 2, 2014, the SAPPRFT issued a Notice on Further Strengthening the Administration of Online Foreign Audiovisual Content (the “September 2014 SAPPRFT Notice”), which requires that operators of audiovisual websites to obtain from the SAPPRFT a Film Public Screening Permit, TV Drama Distribution Permit, or TV Animation Distribution Permit for all foreign films and TV dramas before they are transmitted via the Internet in the Chinese mainland.
However, on September 2, 2014, the SAPPRFT issued the Notice on Further Strengthening the Administration of Online Foreign Audiovisual Content (the “September 2014 SAPPRFT Notice”), which requires that operators of audiovisual websites to obtain from the SAPPRFT a Film Public Screening Permit, TV Drama Distribution Permit, or TV Animation Distribution Permit for all foreign films and TV dramas before they are transmitted via the Internet in the Chinese mainland.
On January 9, 2019, the Netcasting Services Association of China, an industry self-regulatory association, issued Management Standards for Internet Short Video Platforms and Detailed Standard Rules for Reviewing the Content of Internet Short Videos , for the stated purpose of strengthening the responsibility of online platforms to examine the content of short videos before their transmission.
On January 9, 2019, the Netcasting Services Association of China, an industry self-regulatory association, issued the Management Standards for Internet Short Video Platforms and Detailed Standard Rules for Reviewing the Content of Internet Short Videos , for the stated purpose of strengthening the responsibility of online platforms to examine the content of short videos before their transmission.
On June 26, 2017, SAPPRFT and other several regulatory authorities in the Chinese mainland issued the Notice on Several Policies Concerning the Prosperity and Development of Television Dramas that confirms filing procedures with respect to key Internet dramas.
On June 26, 2017, the SAPPRFT and other several regulatory authorities in the Chinese mainland issued the Notice on Several Policies Concerning the Prosperity and Development of Television Dramas that confirms filing procedures with respect to key Internet dramas.
On March 16, 2018, the SAPPRFT issued a Notice on Further Regulating the Distribution Order of Internet Audiovisual Programs, which prohibits operators of audiovisual websites from editing or adapting audiovisual programs of third-party content providers, broadcasting illegally edited and/or adapted audiovisual programs on their audiovisual websites, and/or entering into business collaboration arrangements for online audiovisual services with providers without a Permit of Network Transmission of Audiovisual Programs.
On March 16, 2018, the SAPPRFT issued the Notice on Further Regulating the Distribution Order of Internet Audiovisual Programs, which prohibits operators of audiovisual websites from editing or adapting audiovisual programs of third-party content providers, broadcasting illegally edited and/or adapted audiovisual programs on their audiovisual websites, and/or entering into business collaboration arrangements for online audiovisual services with providers without a Permit of Network Transmission of Audiovisual Programs.
On December 9, 2019, the Comprehensive Market Enforcement Supervision Bureau of MCT issued the Notice on Law Enforcement in the Online Game Market , which stipulates that the investigation and processing of online game cases will be under the Measures of Internet Publication Service Administration, and that the Interim Measures for Online Games Administration , which became effective on August 1, 2010 and were repealed on July 10, 2019, will no longer apply to such cases.
On December 9, 2019, the Comprehensive Market Enforcement Supervision Bureau of the MCT issued the Notice on Law Enforcement in the Online Game Market , which stipulates that the investigation and processing of online game cases will be under the Measures of Internet Publication Service Administration, and that the Interim Measures for Online Games Administration , which became effective on August 1, 2010 and were repealed on July 10, 2019, will no longer apply to such cases.
Production of Radio and Telecommunications Equipment On September 11, 1993, the State Council and Central Military Commission jointly issued the Regulations on the Management of Radio Operations , which were amended on November 11, 2016, under which the working frequencies, bands, and related technical indices of radio transmission equipment must conform to relevant regulations regarding radio and are required to be submitted to the state radio administration authority or its local branches for approval, and failure to submit such information for approval will result in the imposition of a fine.
Production of Radio and Telecommunications Equipment On September 11, 1993, the State Council and the Central Military Commission jointly issued the Regulations on the Management of Radio Operations , which were amended on November 11, 2016, under which the working frequencies, bands, and related technical indices of radio transmission equipment must conform to relevant regulations regarding radio and are required to be submitted to the state radio administration authority or its local branches for approval, and failure to submit such information for approval will result in the imposition of a fine.
Such service providers must provide notice of the purpose, methods and scope of their collection and use of user information, and obtain the consent of each person whose personal information will be collected.
Such service providers must provide notice of the purpose, methods and scope of their collection and use of user information, and obtain the consent of each person whose personal information will be collected.
The Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues Concerning the Application of Law in of Criminal Cases Involving Illegal Use of Information Networks and Assistance in Criminal Activities Committed through Information Networks , issued on October 21, 2019, further clarifies standards for conviction of the crimes of failing to fulfill obligations for the safe management of information on the Internet and assisting in criminal activities related to information networks.
The Interpretation of the Supreme People’s Court and the Supreme People’s Procuratorate on Several Issues Concerning the Application of Law in Criminal Cases Involving Illegal Use of Information Networks and Assistance in Criminal Activities Committed through Information Networks , issued on October 21, 2019, further clarifies standards for conviction of the crimes of failing to fulfill obligations for the safe management of information on the Internet and assisting in criminal activities related to information networks.
On February 7, 2021, the Anti-Monopoly Committee of the State Council issued the Platform Guidelines. The Platform Guidelines were drafted under the framework of the Antitrust Law and, while taking into account the characteristics of the Internet platform economy, give guidance for Internet platform economy operators regarding monopolistic agreements, abuses of dominance, and Concentrations of Undertakings.
On February 7, 2021, the Anti-Monopoly Committee of the State Council issued the Platform Economy Guidelines. The Platform Economy Guidelines were drafted under the framework of the Antitrust Law and, while taking into account the characteristics of the Internet platform economy, give guidance for Internet platform economy operators regarding monopolistic agreements, abuses of dominance, and Concentrations of Undertakings.
On August 1, 2018, the MIIT and several other regulatory authorities in the Chinese mainland issued a Notice on Strengthening the Administration of Live Online Social Video Services , which stipulates that providers of Internet access services and App stores must not provide Internet access and App distribution services for online interactive broadcasting service providers that do not hold requisite permits from or complete the requisite filing procedure with the applicable regulatory agencies.
On August 1, 2018, the MIIT and several other regulatory authorities in the Chinese mainland issued the Notice on Strengthening the Administration of Live Online Social Video Services , which stipulates that providers of Internet access services and App stores must not provide Internet access and App distribution services for online interactive broadcasting service providers that do not hold requisite permits from or complete the requisite filing procedure with the applicable regulatory agencies.
We also filed registration of trademarks relating to our subsidiary companies’ names and Changyou’s online games and other businesses in various countries and regions, such as the United States, the European Union, Japan, Korea, Malaysia, Brazil, Taiwan, and Hong Kong. Our rights to these marks could be affected adversely if any of our applications are rejected.
We also filed registration of trademarks relating to our subsidiary companies’ names and Changyou’s online games and other businesses in various countries and regions, such as the United States, the European Union, Japan, South Korea, Malaysia, Brazil, Taiwan, and Hong Kong. Our rights to these marks could be affected adversely if any of our applications are rejected.
Sanctions for violations include an order to cease the relevant activities, confiscation of illegal gains and fines (from 1% to 10% of sales revenue from the previous year, or up to RMB5.0 million (or approximately $0.7 million) if no sale revenue was generated in the previous year, or RMB3.0 million (or approximately $0.4 million) if the transactions contemplated by monopolistic agreement have not been carried out).
Sanctions for violations include an order to cease the relevant activities, confiscation of illegal gains and fines (from 1% to 10% of sales revenue from the previous year, or up to RMB5.0 million (or approximately $0.7 million) if no sales revenue was generated in the previous year, or RMB3.0 million (or approximately $0.4 million) if the transactions contemplated by monopolistic agreement have not been carried out).
The VIE Gamease, which is the operator of TLBB, Blade Online and certain other licensed PC games, and the VIE Guanyou Gamespace, which provides online game services, obtained Internet publishing licenses on December 10, 2010 and October 13, 2011, respectively, and Gamease and Guanyou Gamespace have obtained online publishing services licenses under the New Internet Publication Measures to replace the Internet publishing licenses previously held by them.
The VIE Gamease, which is the operator of TLBB PC, Blade Online and certain other licensed PC games, and the VIE Guanyou Gamespace, which provides online game services, obtained Internet publishing licenses on December 10, 2010 and October 13, 2011, respectively, and Gamease and Guanyou Gamespace have obtained online publishing service licenses under the New Internet Publication Measures to replace the Internet publishing licenses previously held by them.
The Real-name Registration Notice’s main focus is to prevent minors from using an adult’s ID to play Internet games and, accordingly, the notice imposes stringent punishments on online game operators that do not implement the required anti-fatigue and real-name registration measures properly and effectively.
The Real-name Registration Notice’s main focus is to prevent minors from using an adult’s ID to play online games and, accordingly, the notice imposes stringent punishments on online game operators that do not implement the required anti-fatigue and real-name registration measures properly and effectively.
Gifts. Many of Changyou’s games offer players the option to purchase gift items to send to their friends. Examples of gift items include decorative items and time-limited items for special holiday events and festivals, such as Valentine’s Day, Spring Festival (Chinese New Year) and Christmas.
Many of Changyou’s games offer players the option to purchase gift items to send to their friends. Examples of gift items include decorative items and time-limited items for special holiday events and festivals, such as Valentine’s Day, Spring Festival (Chinese New Year) and Christmas.
TLBB, Blade Online and some of Changyou’s other games were historically published through third parties that were licensed electronic publishing entities, because Gamease had not obtained an Internet publishing license at the time those online games were made publicly available.
TLBB PC, Blade Online and some of Changyou’s other games were historically published through third parties that were licensed electronic publishing entities, because Gamease had not obtained an Internet publishing license at the time those online games were made publicly available.
The VIEs Sohu Internet and Guangzhou Qianjun currently hold permits, both for PC and for Mobile Apps, for the Network Transmission of Audiovisual Programs. On March 30, 2009, the SAPPRFT released a Notice on Strengthening the Administration of Online Audiovisual Content (the “March 2009 SAPPRFT notice”).
The VIEs Sohu Internet and Guangzhou Qianjun currently hold permits, both for PC and for Mobile Apps, for the Network Transmission of Audiovisual Programs. On March 30, 2009, the SAPPRFT released the Notice on Strengthening the Administration of Online Audiovisual Content (the “March 2009 SAPPRFT Notice”).
On November 15, 2018, the CAOC promulgated the Provisions on the Security Assessment of Internet-based Information Services with Attribute of Public Opinions or Capable of Social Mobilization , which require that Internet information service providers that provide Internet services with the potential to influence public opinion or provoke social movement, including BBS, blog, and micro-blog services, must conduct a security self-assessment and file with the local office of the CAOC a self-assessment report regarding such Internet services and supporting technologies, their user base characteristics, and any significant changes in user opinions and potential risks concerning public security issues.
On November 15, 2018, the CAC promulgated the Provisions on the Security Assessment of Internet-based Information Services with Attribute of Public Opinions or Capable of Social Mobilization , which require that Internet information service providers that provide Internet services with the potential to influence public opinion or provoke social movement, including BBS, blog, and micro-blog services, must conduct a security self-assessment and file with the local office of the CAC a self-assessment report regarding such Internet services and supporting technologies, their user base characteristics, and any significant changes in user opinions and potential risks concerning public security issues.
In addition, a number of relevant regulatory authorities and industry associations in the Chinese mainland have published a series of guidelines and standards, such as the Guidelines for Self-Assessment of Illegal Collection and Use of Personal Information by Apps issued by the Special Working Group Supervising the Illegal Collection and Use of Personal Information on March 3, 2019, and the Methods for Identification of the Illegal Collection and Use of Personal Information by Apps issued by the CAOC and three other regulatory authorities in the Chinese mainland on December 30, 2019, pursuant to which App operators are encouraged to conduct self-inspection and self-rectification to enhance the protection of personal information.
In addition, a number of relevant regulatory authorities and industry associations in the Chinese mainland have published a series of guidelines and standards, such as the Guidelines for Self-Assessment of Illegal Collection and Use of Personal Information by Apps issued by the Special Working Group Supervising the Illegal Collection and Use of Personal Information on March 3, 2019, and the Methods for Identification of the Illegal Collection and Use of Personal Information by Apps issued by the CAC and three other regulatory authorities in the Chinese mainland on December 30, 2019, pursuant to which App operators are encouraged to conduct self-inspection and self-rectification to enhance the protection of personal information.
On August 25, 2021, the CAOC issued the Notice on Further Strengthening the Management of Chaos in Fan Groups, which is intended to rectify behavior in the online fan groups for entertainment celebrities, specifically, in features such as entertainment celebrity rankings, hot topics, fan communities, and fans interactive functions, so as to curb verbal abuse, stigmatization, instigation, confrontation, insults, slander, rumors, malicious marketing and the spread of other harmful information.
On August 25, 2021, the CAC issued the Notice on Further Strengthening the Management of Chaos in Fan Groups, which is intended to rectify behavior in the online fan groups for entertainment celebrities, specifically, in features such as entertainment celebrity rankings, hot topics, fan communities, and fans interactive functions, so as to curb verbal abuse, stigmatization, instigation, confrontation, insults, slander, rumors, malicious marketing and the spread of other harmful information.
We are not aware of any online game companies which use the same or similar VIE contractual arrangements as those Changyou use having been challenged by the SAPPRFT or the SPPA as using those VIE arrangements as an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business or having been penalized or ordered to terminate operations since the SAPPRFT Online Game Notice first became effective.
We are not aware of any online game companies which use the same or similar VIE contractual arrangements as those Changyou use having been challenged by the SAPPRFT or the NPPA as using those VIE arrangements as an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business or having been penalized or ordered to terminate operations since the SAPPRFT Online Game Notice first became effective.
The Several Provisions also provide various rules to protect the interests of Internet information users, such as requesting Internet information service providers to take measures to protect the privacy information of their users and prohibiting Internet information service providers from cheating and misleading their users. 77 Table of Contents On August 25, 2017, the CAOC issued the Administration Measures for Internet Forum Community Service , effective on October 1, 2017, to regulate the provision of online interactive social network services for information dissemination.
The Several Provisions also provide various rules to protect the interests of Internet information users, such as requesting Internet information service providers to take measures to protect the privacy information of their users and prohibiting Internet information service providers from cheating and misleading their users. 77 Table of Contents On August 25, 2017, the CAC issued the Administration Measures for Internet Forum Community Service , effective on October 1, 2017, to regulate the provision of online interactive social network services for information dissemination.
On April 23, 2021, the CAOC and six other regulatory authorities in the Chinese mainland issued the Administrative Measures for E-commerce Live Online broadcasting (for Trial Implementation) , which further stipulate that live online broadcasting platforms must take certain specified measures, such as arranging special personnel to conduct real-time inspections and extending the storage time for live broadcast content with respect to key live online broadcasting operators.
On April 23, 2021, the CAC and six other regulatory authorities in the Chinese mainland issued the Administrative Measures for E-commerce Live Online broadcasting (for Trial Implementation) , which further stipulate that live online broadcasting platforms must take certain specified measures, such as arranging special personnel to conduct real-time inspections and extending the storage time for live broadcast content with respect to key live online broadcasting operators.
On July 5, 2023, the CAOC promulgated the Notice on Strengthening the Management of “ We Media ” (the “We Media Notice”), which stipulates that if an Internet user intends to engage in profit-making activities, such as selling products during a livestream broadcast, through a “we media” account that the Internet user has registered with an Internet platform, the user must apply for profit-making authorization from the Internet platform in accordance with the We Media Notice.
On July 5, 2023, the CAC promulgated the Notice on Strengthening the Management of “ We Media ” (the “We Media Notice”), which stipulates that if an Internet user intends to engage in profit-making activities, such as selling products during a livestream broadcast, through a “we media” account that the Internet user has registered with an Internet platform, the user must apply for profit-making authorization from the Internet platform in accordance with the We Media Notice.
On November 18, 2019, the CAOC, the SAPPRFT, and the MCT jointly issued the Provisions on the Administration of Internet Audio-video Information Services (the “2019 Notice 3”), pursuant to which Internet audiovisual information services providers are required to identify and conspicuously mark for users of their platforms non-reality-based audiovisual information created using deep learning, virtual reality, and other new technologies and applications.
On November 18, 2019, the CAC, the SAPPRFT, and the MCT jointly issued the Provisions on the Administration of Internet Audio-video Information Services (the “2019 Notice 3”), pursuant to which Internet audiovisual information services providers are required to identify and conspicuously mark for users of their platforms non-reality-based audiovisual information created using deep learning, virtual reality, and other new technologies and applications.
The Generative AI Services Measures stipulate that providers of generative artificial intelligence services related to text, image, audio, video and other content to the general public within the Chinese mainland will be responsible as “producers of Internet information content” and “personal information processors,” with the responsibilities specified in the PIPL, the Data Security Law, the Internet Security Law, and other Chinese mainland laws and regulations related to cybersecurity and personal information protection.
The Generative AI Services Measures stipulate that providers of generative AI services related to text, image, audio, video and other content to the general public within the Chinese mainland will be responsible as “producers of Internet information content” and “personal information processors,” with the responsibilities specified in the PIPL, the Data Security Law, the Internet Security Law, and other Chinese mainland laws and regulations related to cybersecurity and personal information protection.
On March 17, 2010, SAPPRFT issued a Catalogue of Classification of Internet Audio-Video Program Services (Trial) (the “Internet Audio-Video Program Catalogue”), which was amended on March 10, 2017.
On March 17, 2010, the SAPPRFT issued the Catalogue of Classification of Internet Audio-Video Program Services (Trial) (the “Internet Audio-Video Program Catalogue”), which was amended on March 10, 2017.
On March 13, 2019, the SAMR issued the Notice on the Launch of Special Enforcement Actions to Protect Consumers and Crack Down on Violations of Personal Information of Consumers and the Announcement of the Implementation of App Security Certifications , and on October 31, 2019, the SAMR and the CAOC issued the Notice of a Special Campaign to Rectify the Infringement of Legal Rights and Interests of App Users so as to further protect the rights of the App users in and to their personal information and clarify the requirements for App security certification.
On March 13, 2019, the SAMR issued the Notice on the Launch of Special Enforcement Actions to Protect Consumers and Crack Down on Violations of Personal Information of Consumers and the Announcement of the Implementation of App Security Certifications , and on October 31, 2019, the SAMR and the CAC issued the Notice of a Special Campaign to Rectify the Infringement of Legal Rights and Interests of App Users so as to further protect the rights of the App users in and to their personal information and clarify the requirements for App security certification.
On November 15, 2024, the CAOC issued the Guidelines for the Construction of Minors Mode in Mobile Internet , which propose an overall plan for the development of a “minors mode,” that will be primarily applicable to mobile smart terminals, mobile Internet applications, and related distribution platforms for purposes of the protection of minors from harmful Internet content, behavior, and activities.
On November 15, 2024, the CAC issued the Guidelines for the Construction of Minors Mode in Mobile Internet , which propose an overall plan for the development of a “minors mode,” that will be primarily applicable to mobile smart terminals, mobile Internet applications, and related distribution platforms for purposes of the protection of minors from harmful Internet content, behavior, and activities.
After the expiration of their terms Changyou may not be able to renew these license agreements with commercial terms that are favorable to Changyou, if at all, and Changyou’s inability to renew these license agreements could cause Changyou to lose the right to use the trademarks related to those games to the extent that they relate to Tian Long Ba Bu.
After the expiration of their terms Changyou may not be able to renew these license agreements with commercial terms that are favorable to Changyou, if at all, and Changyou’s inability to renew these license agreements could cause Changyou to lose the license rights to use the trademarks related to those games to the extent that they relate to Tian Long Ba Bu.
On August 25, 2017, the CAOC issued the Administration Measures for Internet Comment Thread Services , which were amended on November 16, 2022, regulating the provision of comment-thread services by websites, applications, and other Internet platforms with media and social mobilization characteristics that allow users to release text, photos, audio, and video.
On August 25, 2017, the CAC issued the Administration Measures for Internet Comment Thread Services , which were amended on November 16, 2022, regulating the provision of comment-thread services by websites, applications, and other Internet platforms with media and social mobilization characteristics that allow users to release text, photos, audio, and video.
On June 27, 2022, the CAOC promulgated the Administrative Provisions on the Account Information of Internet Users , effective on August 1, 2022, under which Internet information service providers must authenticate the real identity information of users before providing any information distribution or instant messaging services to those users, and must display the users’ locations based on their IP addresses.
On June 27, 2022, the CAC promulgated the Administrative Provisions on the Account Information of Internet Users , effective on August 1, 2022, under which Internet information service providers must authenticate the real identity information of users before providing any information distribution or instant messaging services to those users, and must display the users’ locations based on their IP addresses.
The App Provisions also require application providers to procure relevant approval to provide services through such applications and require application distribution platforms to register with local branch offices of the CAOC within 30 days after they start providing application store services. We have procured the required approvals for services that we provide through our mobile applications.
The App Provisions also require application providers to procure relevant approval to provide services through such applications and require application distribution platforms to register with local branch offices of the CAC within 30 days after they start providing application store services. We have procured the required approvals for services that we provide through our mobile applications.
On October 26, 2021, the CAOC issued the Notice on Further Strengthening the Regulation on Online Information of Entertainment Celebrities , which requires internet platforms to, among other things, monitor online information of entertainment celebrities so as to timely identify hot topics that could involve illegal actions and promptly report to competent authorities.
On October 26, 2021, the CAC issued the Notice on Further Strengthening the Regulation on Online Information of Entertainment Celebrities , which requires internet platforms to, among other things, monitor online information of entertainment celebrities so as to timely identify hot topics that could involve illegal actions and promptly report to competent authorities.
Principal Variable Interest Entities As of the date of the filing of this annual report, the following are the principal VIEs in the Chinese mainland that we established, or the contracts with which we succeeded to, to perform value-added telecommunications services, online games, Internet publishing, online news information services, online audiovisual transmission, and certain other business activities in the Chinese mainland, because of the Chinese mainland’s legal restrictions on direct foreign investment in and operation of value-added telecommunications businesses, which restrictions are discussed in “Governmental Regulation and Legal Uncertainties - Specific Statutes and Regulations - Regulation of Foreign Direct Investment in Value-Added Telecommunications Companies.” We entered into contractual arrangements between the VIEs and our Chinese mainland subsidiaries that govern a substantial portion of our operations, including those of the brand advertising business, the online game business and the others business.
Principal Variable Interest Entities As of the date of the filing of this annual report, the following are the principal VIEs in the Chinese mainland that we established, or the contracts with which we succeeded to, to perform value-added telecommunications services, online games, Internet publishing, online news information services, online audiovisual transmission, and certain other business activities in the Chinese mainland, because of the Chinese mainland’s legal restrictions on direct foreign investment in and operation of value-added telecommunications businesses, which restrictions are discussed in “Governmental Regulation and Legal Uncertainties - Specific Statutes and Regulations - Regulation of Foreign Direct Investment in Value-Added Telecommunications Companies.” We entered into contractual arrangements between the VIEs and our Chinese mainland subsidiaries that govern a substantial portion of our operations, including those of the marketing services business, the online game business and the other business.
The Platform Guidelines also stipulate that any Concentrations of Undertakings involving VIE structures fall within the scope of anti-monopoly review.
The Platform Economy Guidelines also stipulate that any Concentrations of Undertakings involving VIE structures fall within the scope of anti-monopoly review.
The “SAMR” as used in this annual report refers to the regulatory authority that resulted from the merger, as well as to the SAIC, the AQSIQ, the SAC, and the SFDA separately for periods prior to the merger; • the SAPPRFT was reorganized into three separate regulatory authorities, the NRTA, the NFA, and the SPPA, in March 2018.
The “SAMR” as used in this annual report refers to the regulatory authority that resulted from the merger, as well as to the SAIC, the AQSIQ, the SAC, and the SFDA separately for periods prior to the merger; • the SAPPRFT was reorganized into three separate regulatory authorities, the NRTA, the NFA, and the NPPA, in March 2018.
However, it is unclear whether and how the SAPPRFT Online Game Notice might be interpreted or implemented in the future. On February 21, 2008, the SAPPRFT issued the Rules for the Administration of Electronic Publications , or the Electronic Publication Rules, which were amended on August 28, 2015.
However, it is unclear whether and how the SAPPRFT Online Game Notice might be interpreted or implemented in the future. On February 21, 2008, the SAPPRFT issued the Rules for the Administration of Electronic Publications (the “Electronic Publication Rules”), which were amended on August 28, 2015.
On January 23, 2019, the CAOC, the MIIT, the MPS, and the SAMR jointly issued the Public Announcement Concerning the Illegal Collection of Personal Information by Apps, which emphasizes that App operators must comply strictly with the Internet Security Law in connection with their collection and use of personal information.
On January 23, 2019, the CAC, the MIIT, the MPS, and the SAMR jointly issued the Public Announcement Concerning the Illegal Collection of Personal Information by Apps, which emphasizes that App operators must comply strictly with the Internet Security Law in connection with their collection and use of personal information.
On April 13, 2016, the SAMR and sixteen other regulatory authorities in the Chinese mainland jointly issued a Notice of Campaign to Crack Down on Illegal Internet Finance Advertisements and Other Financial Activities in the Name of Investment Management (the ‘‘Campaign Notice’’), pursuant to which a campaign was conducted between April 2016 and January 2017 targeting, among other things, online advertisements for Internet finance and other financial activities posted on Internet search portals and other portal, financial, real estate, P2P and investment product sales services websites.
On April 13, 2016, the SAMR and sixteen other regulatory authorities in the Chinese mainland jointly issued the Notice of Campaign to Crack Down on Illegal Internet Finance Advertisements and Other Financial Activities in the Name of Investment Management , pursuant to which a campaign was conducted between April 2016 and January 2017 targeting, among other things, online advertisements for Internet finance and other financial activities posted on Internet search portals and other financial, real estate, P2P and investment product sales services websites and portals.
If the VIE structures of Changyou were deemed under the SAPPRFT Online Game Notice to be an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business, the VIE structures of Changyou might be challenged by the SPPA, a successor agency to the SAPPRFT.
If the VIE structures of Changyou were deemed under the SAPPRFT Online Game Notice to be an “indirect means” for foreign investors to exercise control over or participate in the operation of a domestic online game business, the VIE structures of Changyou might be challenged by the NPPA, a successor agency to the SAPPRFT.
Under the Measures for Cybersecurity Review, before purchasing any network products or services, CIIOs must assess potential national security risks that may arise from the launch or use of such products or services, and apply for a cybersecurity review with the CAOC if national security will or may be affected.
Under the Measures for Cybersecurity Review, before purchasing any network products or services, CIIOs must assess potential national security risks that may arise from the launch or use of such products or services, and apply for a cybersecurity review with the CAC if national security will or may be affected.
Platform Channel Business Changyou’s platform channel business consists primarily of the operation of the 17173.com Website, which provides news, electronic forums, online videos, and other online game information services to game players. Changyou generates online advertising revenues from providing advertising services to third-party advertisers on the 17173.com Website.
Platform Channel Business Changyou’s platform channel business consists primarily of the operation of the 17173.com Website, which provides news, electronic forums, online videos, and other online game information services to game players. Changyou generates marketing services revenues from providing marketing services to third-party advertisers on the 17173.com Website.
Over time, our competitors may gradually build certain competitive advantages over us in terms of: • greater brand recognition; • better products and services; • larger user and advertiser bases; • more extensive and well-developed marketing and sales networks; and • substantially greater financial and technical resources.
Over time, our competitors may gradually build certain competitive advantages over us in terms of: • greater brand recognition; • better products and services; • larger user and advertiser base; • more extensive and well-developed marketing and sales networks; and • substantially greater financial and technical resources.
The New Internet Publication Measures, which became effective on March 10, 2016 and replaced the Temporary Measures for Internet Publication Administration that had become effective in 2002, require that entities in the Internet publishing business apply for an online publishing services license instead of an Internet publishing license, that entities holding an Internet publishing license apply for an online publishing service license within a specified period of time to replace their Internet publishing license, and that all such entities obtain approval from the SAPPRFT or the SPPA prior to the publication of new online games.
The New Internet Publication Measures, which became effective on March 10, 2016 and replaced the Temporary Measures for Internet Publication Administration that had become effective in 2002, require that entities in the Internet publishing business apply for an online publishing service license instead of an Internet publishing license, that entities holding an Internet publishing license apply for an online publishing service license within a specified period of time to replace their Internet publishing license, and that all such entities obtain approval from the SAPPRFT or the NPPA prior to the publication of new online games.
On September 9, 2022, the CAOC, the MIIT and the SAMR issued the Administrative Provisions on Internet Pop-up Window Information Push Services , effective on September 30, 2022, regulating the provision of information push services in the form of pop-up message windows through operating systems, application software and websites.
On September 9, 2022, the CAC, the MIIT and the SAMR issued the Administrative Provisions on Internet Pop-up Window Information Push Services , effective on September 30, 2022, regulating the provision of information push services in the form of pop-up message windows through operating systems, application software and websites.
Under the Work Plan, the current relevant regulations regarding online games will be further clarified and additional implementation rules will be issued; and as a result, online game operators will be required to implement measures to protect minors. On July 25, 2014, the SAPPRFT promulgated the Verification of Real-name Registration Notice, which took effect on October 1, 2014.
Under the Work Plan, the current relevant regulations regarding online games will be further clarified and additional implementation rules will be issued; and as a result, online game operators will be required to implement measures to protect minors. 89 Table of Contents On July 25, 2014, the SAPPRFT promulgated the Verification of Real-name Registration Notice, which took effect on October 1, 2014.
CPC Model Under the CPC model, there is no fixed price for advertising services stated in the contract with the advertiser. The unit price for each click is auction-based; we charge advertisers on a per-click basis when the users click on the advertisements.
CPC Model Under the CPC model, there is no fixed price for marketing services stated in the contract with the advertiser. The unit price for each click is auction-based; we charge advertisers on a per-click basis when the users click on the advertisements.
On March 22, 2024, the CAOC promulgated the Provisions on Promoting and Regulating Cross-Border Data Flows (the “Cross-border Data Flow Provisions”), which stipulate that if there is a conflict between the Cross-border Data Flow Provisions and the Data Security Assessment Measures, the Cross-border Data Flow Provisions will prevail.
On March 22, 2024, the CAC promulgated the Provisions on Promoting and Regulating Cross-Border Data Flows (the “Cross-border Data Flow Provisions”), which stipulate that if there is a conflict between the Cross-border Data Flow Provisions and the Data Security Assessment Measures, the Cross-border Data Flow Provisions will prevail.
The “NRTA,” the “NFA” and the “SPPA” as used in this annual report refer to the respective regulatory authorities after the reorganization; the “SAPPRFT” as used in this annual report refers to the regulatory authority that resulted from the merger for the period after the merger and prior to the reorganization, as well as to the GAPP and the SARFT separately for periods prior to the merger; • the China State Council Information Office (the “SCIO”); • the CAOC; • the SAFE; and • the China Banking and Insurance Regulatory Commission (the “CBIRC”), which resulted from the merger of, and assumed the responsibilities previously held by, the China Banking Regulatory Commission (the “CBRC”) and the China Insurance Regulatory Commission (the “CIRC”) and has been integrated into the China National Financial Regulatory Administration (the “CNRA”).
The “NRTA,” the “NFA” and the “NPPA” as used in this annual report refer to the respective regulatory authorities after the reorganization; the “SAPPRFT” as used in this annual report refers to the regulatory authority that resulted from the merger for the period after the merger and prior to the reorganization, as well as to the GAPP and the SARFT separately for periods prior to the merger; • the China State Council Information Office (the “SCIO”); • the CAC; • the SAFE; and • the China Banking and Insurance Regulatory Commission (the “CBIRC”), which resulted from the merger of, and assumed the responsibilities previously held by, the China Banking Regulatory Commission (the “CBRC”) and the China Insurance Regulatory Commission (the “CIRC”) and has been integrated into the China National Financial Regulatory Administration (the “CNRA”).
Information contained on our corporate website is not part of this annual report or any other report that we filed with, or furnished to, the SEC. 65 Table of Contents BUSINESS OVERVIEW We are a leading Chinese online media platform and game business group providing comprehensive online products and services on PCs and mobile devices in the Chinese mainland.
Information contained on our corporate website is not part of this annual report or any other report that we filed with, or furnished to, the SEC. BUSINESS OVERVIEW We are a leading Chinese online media platform and game business group providing comprehensive online products and services on PCs and mobile devices in the Chinese mainland.
The Online Culture Operating Permit obtained by Sohu Internet includes a permit for operating Internet information services at “sohu.com.” 83 Table of Contents On September 2, 2016, the SAPPRFT issued the Notice on Strengthening the Management of Live Online Social Video Services (the “Live Online Notice”), which requires interactive broadcasting service providers to procure a permit for the Network Transmission of Audiovisual Programs.
The Online Culture Operating Permit obtained by Sohu Internet includes a permit for operating Internet information services at “sohu.com.” On September 2, 2016, the SAPPRFT issued the Notice on Strengthening the Management of Live Online Social Video Services (the “Live Online Notice”), which requires interactive broadcasting service providers to procure a permit for the Network Transmission of Audiovisual Programs.
Electronic publishing entities are responsible for assuring that the content of electronic publications comply with relevant laws and regulations of the Chinese mainland, and must obtain the approval of the SPPA, a successor agency to the SAPPRFT, before publishing foreign electronic publications.
Electronic publishing entities are responsible for assuring that the content of electronic publications comply with relevant laws and regulations of the Chinese mainland, and must obtain the approval of the NPPA, a successor agency to the SAPPRFT, before publishing foreign electronic publications.
The Administrative Measures for Content Self-review by Internet Culture Business Entities , or the Content Self-review Administrative Measure, which took effect in December 2013, require Internet culture business entities to review the content of products and services to be provided prior to providing such content and services to the public.
The Administrative Measures for Content Self-review by Internet Culture Business Entities , which took effect in December 2013, require Internet culture business entities to review the content of products and services to be provided prior to providing such content and services to the public.
If an ICP license holder violates these measures, the relevant regulatory authority in the Chinese mainland may revoke its ICP license and shut down its websites. Protection of Minors On April 12, 2022, several regulatory authorities in the Chinese mainland jointly promulgated the Notice on Strengthening the Management of Live Streaming of Games on Online Audiovisual Program Platforms (“Notice 27”).
If an ICP license holder violates these measures, the relevant regulatory authority in the Chinese mainland may revoke its ICP license and shut down its websites. 88 Table of Contents Protection of Minors On April 12, 2022, several regulatory authorities in the Chinese mainland jointly promulgated the Notice on Strengthening the Management of Live Streaming of Games on Online Audiovisual Program Platforms (“Notice 27”).
The rate was reduced to 10% under the Implementing Regulations for the CIT Law issued by the State Council.
The rate was reduced to 10% under the CIT Law Implementing Regulations issued by the State Council.
Regulation of Brand Advertising Services On April 24, 2015, the Standing Committee of the National People’s Congress enacted the New Advertising Law, which became effective on September 1, 2015 and was amended on October 26, 2018 and April 29, 2021.
Regulation of Advertising On April 24, 2015, the Standing Committee of the National People’s Congress enacted the New Advertising Law, which became effective on September 1, 2015 and was amended on October 26, 2018 and April 29, 2021.
In addition, the Imported Online Game Notice states that activities which involve the showing, exhibition, trading and promotion of Offshore online games in the Chinese mainland must be examined and approved by the SAPPRFT or the SPPA.
In addition, the Imported Online Game Notice states that activities which involve the showing, exhibition, trading and promotion of Offshore online games in the Chinese mainland must be examined and approved by the SAPPRFT or the NPPA.
On September 7, 2017, the CAOC issued the Administration Measures for Internet Chat Group Services , effective on October 8, 2017, to regulate the provision of platform services for that allow Internet user groups to exchange information online.
On September 7, 2017, the CAC issued the Administration Measures for Internet Chat Group Services , effective on October 8, 2017, to regulate the provision of platform services for that allow Internet user groups to exchange information online.
On December 31, 2021, the CAOC, MIIT, MPS and SAMR jointly issued the Administrative Provisions on Algorithm Recommendations by Internet Information Services ( the “Algorithm Recommendation Provisions”), which took effect on March 1, 2022.
On December 31, 2021, the CAC, MIIT, MPS and SAMR jointly issued the Administrative Provisions on Algorithm Recommendations by Internet Information Services ( the “Algorithm Recommendation Provisions”), which took effect on March 1, 2022.
The Notice on Strengthening the Approval and Administration of Imported Online Games , or the Imported Online Game Notice, which was issued by the SAPPRFT and took effect in July 2009, states that the SAPPRFT was, and the SPPA as a successor to the SAPPRFT is, the only regulatory authority authorized by the State Council to approve the importation of online games from Offshore copyright owners, and that any enterprise which engages in online game publication and operation services within the Chinese mainland must have the game examined and approved by the SAPPRFT or the SPPA and receive from the SAPPRFT or the SPPA an Internet publishing license (or after the New Internet Publication Measures became effective on March 10, 2016, an online publishing services license).
The Notice on Strengthening the Approval and Administration of Imported Online Games (the “Imported Online Game Notice”), which was issued by the SAPPRFT and took effect in July 2009, states that the SAPPRFT was, and the NPPA as a successor to the SAPPRFT is, the only regulatory authority authorized by the State Council to approve the importation of online games from Offshore copyright owners, and that any enterprise which engages in online game publication and operation services within the Chinese mainland must have the game examined and approved by the SAPPRFT or the NPPA and receive from the SAPPRFT or the NPPA an Internet publishing license (or after the New Internet Publication Measures became effective on March 10, 2016, an online publishing service license).
For the details of the Internet publishing licenses held by the VIEs through which Changyou operates its business, see “- Regulation of Online Game Services - Online Games and Cultural Products.” 79 Table of Contents Online Audiovisual Transmission Through the Public Internet On December 20, 2007, the SAPPRFT and the MIIT jointly issued the Rules for the Administration of Internet Audiovisual Program Services (“Document 56”), which came into effect as of January 31, 2008 and were amended on August 28, 2015.
For the details of the online publishing service licenses held by the VIEs through which Changyou operates its business, see “- Regulation of Online Game Services - Online Games and Cultural Products.” Online Audiovisual Transmission through the Public Internet On December 20, 2007, the SAPPRFT and the MIIT jointly issued the Rules for the Administration of Internet Audiovisual Program Services (“Document 56”), which came into effect as of January 31, 2008 and were amended on August 28, 2015.
On March 12, 2021, CAOC, MIIT, MPS and SAMR jointly issued the Rules on the Scope of Necessary Personal Information for Common Types of Mobile Internet Applications, to further clarify the scope of essential personal information for common types of applications.
On March 12, 2021, CAC, MIIT, MPS and SAMR jointly issued the Rules on the Scope of Necessary Personal Information for Common Types of Mobile Internet Applications, to further clarify the scope of essential personal information for common types of applications.
The Order states, in broad terms, that violators may face warnings, fines, and disclosure to the public and, in the most severe cases, criminal liability. 96 Table of Contents On January 5, 2015, the SAMR promulgated the Measures on Punishment for Infringement of Consumer Rights, which were amended on October 23, 2020.
The Order states, in broad terms, that violators may face warnings, fines, and disclosure to the public and, in the most severe cases, criminal liability. On January 5, 2015, the SAMR promulgated the Measures on Punishment for Infringement of Consumer Rights , which were amended on October 23, 2020.
On September 7, the CAOC issued the Administration Measures for Internet Users ’ Social Account Information Services , which were effective on October 8, 2017 and amended on January 22, 2021.
On September 7, the CAC issued the Administration Measures for Internet Users ’ Social Account Information Services , which were effective on October 8, 2017 and amended on January 22, 2021.
Mobile Internet Applications Information Services On June 28, 2016, the CAOC issued the Provisions on the Administration of Mobile Internet Applications Information Services (the “App Provisions”), which became effective on August 1, 2016 and were amended on June 14, 2022.
Mobile Internet Applications Information Services On June 28, 2016, the CAC issued the Provisions on the Administration of Mobile Internet Applications Information Services (the “App Provisions”), which became effective on August 1, 2016 and were amended on June 14, 2022.
The Cross-border Data Flow Provisions specify the circumstances under which data processors must apply to the CAOC through its applicable provincial branch office for a security assessment of cross-border data transfers.
The Cross-border Data Flow Provisions specify the circumstances under which data processors must apply to the CAC through its applicable provincial branch office for a security assessment of cross-border data transfers.
The Micro-short Drama Notice stipulates that online audiovisual platform operators, such as us, are responsible for content management and review for certain micro-short dramas with a total investment of less than RMB300,000 (or approximately $42,146) that are not identified as highly recommended for purposes of marketing and business promotion on their platforms or otherwise specifically promoted on their home page or screen.
The Micro-short Drama Notice stipulates that online audiovisual platform operators, such as us, are responsible for content management and review for certain micro-short dramas with a total investment of less than RMB300,000 (or approximately $41,992) that are not identified as highly recommended for purposes of marketing and business promotion on their platforms or otherwise specifically promoted on their home page or screen.
These telecommunication operators provide Sohu with support services twenty-four hours per day, seven days per week. They also provide connectivity for Sohu’s servers through multiple high-speed connections. All facilities are protected by Uninterruptible Power Supplies. 70 Table of Contents For reliability, availability, and serviceability, Sohu has created an environment in which each server can function independently.
These telecommunication operators provide Sohu with support services twenty-four hours per day, seven days per week. They also provide connectivity for Sohu’s servers through multiple high-speed connections. All facilities are protected by Uninterruptible Power Supplies. For reliability, availability, and serviceability, Sohu has created an environment in which each server can function independently.
On February 20, 2018, the CAOC issued the Administrative Provisions on Micro-blogging and Blogging Information Services , effective on March 20, 2018, further regulating the provision of platform services for publishing and distributing information through micro-blogs and blogs.
On February 20, 2018, the CAC issued the Administrative Provisions on Micro-blogging and Blogging Information Services , effective on March 20, 2018, further regulating the provision of platform services for publishing and distributing information through micro-blogs and blogs.
The VIEs Gamease and Guanyou Gamespace obtained Internet publishing licenses from the SAPPRFT and they have obtained online publishing services licenses under the New Internet Publication Measures to replace the Internet publishing licenses previously held by them.
The VIEs Gamease and Guanyou Gamespace obtained Internet publishing licenses from the SAPPRFT and they have obtained online publishing service licenses under the New Internet Publication Measures to replace the Internet publishing licenses previously held by them.
Pursuant to the Anti-Pornography Notice, rewards of up to RMB10,000 will be provided to Internet users who report websites that feature pornography, and a committee has been established to review such reports to determine an appropriate award. During a Chinese mainland anti-pornography campaign conducted in 2014, many websites (including mobile websites) that contained pornography were closed down.
Pursuant to the Anti-Pornography Notice, rewards of up to RMB10,000 (or approximately $1,400) will be provided to Internet users who report websites that feature pornography, and a committee has been established to review such reports to determine an appropriate award. During a Chinese mainland anti-pornography campaign conducted in 2014, many websites (including mobile websites) that contained pornography were closed down.
Changyou generates online advertising revenues from providing advertising services to third-party advertisers on the 17173.com Website. INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS We regard our patents, copyrights, service marks, trademarks, trade secrets and other intellectual property as critical to our success.
Changyou generates marketing services revenues from providing marketing services to third-party advertisers on the 17173.com Website. INTELLECTUAL PROPERTY AND PROPRIETARY RIGHTS We regard our patents, copyrights, service marks, trademarks, trade secrets and other intellectual property as critical to our success.
We have adopted measures necessary to ensure that we are in compliance with all of these requirements. Laws and Regulations Related to Intellectual Property Protection The Chinese mainland has adopted comprehensive laws and regulations governing intellectual property rights, including copyrights, patents and trademarks.
We have adopted measures necessary to ensure that we are in compliance with all of these requirements. 93 Table of Contents Laws and Regulations Related to Intellectual Property Protection The Chinese mainland has adopted comprehensive laws and regulations governing intellectual property rights, including copyrights, patents and trademarks.
We also license and expect to continue licensing technology from third parties. The market is evolving and we may need to license additional technologies to remain competitive. We may not be able to license these technologies on commercially reasonable terms or at all. In addition, we may fail to successfully integrate any licensed technology into our services.
We also license and expect to continue licensing technology, including open-source software, from third parties. The market is evolving and we may need to license additional technologies to remain competitive. We may not be able to license these technologies on commercially reasonable terms or at all. In addition, we may fail to successfully integrate any licensed technology into our services.
The M&A Rule includes provisions that purport to require that an Offshore special purpose vehicle formed for purposes of the overseas listing of equity interests in Chinese mainland companies and controlled directly or indirectly by Chinese mainland companies or individuals obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange.
The M&A Rules include provisions that purport to require that an Offshore special purpose vehicle formed for purposes of the overseas listing of equity interests in Chinese mainland companies and controlled directly or indirectly by Chinese mainland companies or individuals obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas stock exchange.
As of the date of the filing of this annual report, the Internet publishing license held by Guanyou Gamespace has expired, and Guanyou Gamespace is in the process of applying for renewal of such license. There is uncertainty as to whether Guanyou Gamespace will be able to renew such license.
As of the date of the filing of this annual report, the online publishing service license held by Guanyou Gamespace has expired, and Guanyou Gamespace is in the process of applying for renewal of such license. There is uncertainty as to whether Guanyou Gamespace will be able to renew such license.

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Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

79 edited+15 added−10 removed32 unchanged
Net Cash Used in Financing Activities For 2024, $40.9 million net cash used in continuing financing activities was used in the repurchase of shares. For 2023, $6.6 million net cash used in continuing financing activities was used in the repurchase of shares.
For 2024, $40.9 million net cash used in continuing financing activities was used in the repurchase of shares. For 2023, $6.6 million net cash used in continuing financing activities was used in the repurchase of shares.
Net Cash Used in Investing Activities For 2024, $113.4 million net cash used in continuing investing activities was primarily attributable to (i) $1.94 billion used in the purchase of short-term investments and time deposits, and $19.9 million used in the purchase of fixed assets and intangible assets, offset by (ii) $1.84 billion in proceeds from short-term investments and time deposits, and $0.6 million cash received from other investing activities.
For 2024, $113.4 million net cash used in continuing investing activities was primarily attributable to (i) $1.94 billion used in the purchase of short-term investments and time deposits, and $19.9 million used in the purchase of fixed assets and intangible assets, offset by (ii) $1.83 billion in proceeds from short-term investments and time deposits, and $0.6 million cash received from other investing activities.
When one of our estimates of loss severity and recoveries and macroeconomic forecasts decreased or increased by 5% while holding all other estimates constant, there would be no significant impact to our consolidated results of operations. Our estimate of the key assumptions did not change significantly throughout the periods presented.
When one of our estimates of loss severity and recoveries and macroeconomic forecasts decreased or increased by 5% while holding all other estimates constant, there would be no significant impact to our consolidated results of operations. The nature of the key assumptions did not change significantly throughout the periods presented.
The following table sets forth certain operating data for Changyou’s PC games and mobile games for the periods indicated: Average Monthly Active Accounts (1) Three Months Ended March 31 Three Months Ended June 30 Three Months Ended September 30 Three Months Ended December 31 (in millions) PC games Mobile games PC games Mobile games PC games Mobile games PC games Mobile games 2022 2.0 2.4 2.3 2.0 2.1 2.5 2.3 1.8 2023 2.2 1.6 2.2 1.3 2.2 2.3 2.3 1.7 2024 2.3 2.8 2.2 4.9 2.2 3.2 2.3 2.6 114 Table of Contents Quarterly Aggregate Active Paying Accounts (2) Three Months Ended March 31 Three Months Ended June 30 Three Months Ended September 30 Three Months Ended December 31 (in millions) PC games Mobile games PC games Mobile games PC games Mobile games PC games Mobile games 2022 1.0 0.5 1.0 0.4 1.0 0.6 0.9 0.4 2023 0.9 0.3 0.9 0.3 1.0 0.5 0.9 0.3 2024 0.9 0.3 0.9 1.1 0.9 1.1 1.0 0.4 (1) Average Monthly Active Accounts for a given period refers to the number of registered accounts that were logged in to these games at least once during the period.
The following table sets forth certain operating data for Changyou’s PC games and mobile games for the periods indicated: Average Monthly Active Accounts (1) Three Months Ended March 31 Three Months Ended June 30 Three Months Ended September 30 Three Months Ended December 31 (in millions) PC games Mobile games PC games Mobile games PC games Mobile games PC games Mobile games 2023 2.2 1.6 2.2 1.3 2.2 2.3 2.3 1.7 2024 2.3 2.8 2.2 4.9 2.2 3.2 2.3 2.6 2025 2.3 2.1 2.3 1.9 2.7 1.9 2.8 1.9 116 Table of Contents Quarterly Aggregate Active Paying Accounts (2) Three Months Ended March 31 Three Months Ended June 30 Three Months Ended September 30 Three Months Ended December 31 (in millions) PC games Mobile games PC games Mobile games PC games Mobile games PC games Mobile games 2023 0.9 0.3 0.9 0.3 1.0 0.5 0.9 0.3 2024 0.9 0.3 0.9 1.1 0.9 1.1 1.0 0.4 2025 1.0 0.4 0.9 0.3 1.1 0.3 1.1 0.3 (1) Average Monthly Active Accounts for a given period refers to the number of registered accounts that were logged in to these games at least once during the period.
In addition, regulatory authorities in the Chinese mainland could impose restrictions on such payments or change the tax rates applicable to such payments. 123 Table of Contents Capital Expenditures Our capital expenditures include the purchase of fixed assets, intangible assets and other assets.
In addition, regulatory authorities in the Chinese mainland could impose restrictions on such payments or change the tax rates applicable to such payments. Capital Expenditures Our capital expenditures include the purchase of fixed assets, intangible assets and other assets.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our financial condition and results of operations in conjunction with the section entitled “Selected Consolidated Financial Data” and our consolidated financial statements and the related notes included elsewhere in this annual report.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our consolidated financial statements and the related notes included elsewhere in this annual report.
(2) Quarterly Aggregate Active Paying Accounts for a given quarter refers to the number of accounts from which game points are used at least once during the quarter. Other Revenues Revenues from other services were $22.5 million for 2024, compared to $32.3 million and $45.2 million, respectively, for 2023 and 2022.
(2) Quarterly Aggregate Active Paying Accounts for a given quarter refers to the number of accounts from which game points are used at least once during the quarter. Other Revenues Revenues from other services were $18.6 million for 2025, compared to $22.5 million and $32.3 million, respectively, for 2024 and 2023.
For 2023, $291.7 million net cash used in continuing investing activities was primarily attributable to (i) $1.80 billion used in purchase of short-term investments and time deposits, $22.1 million used in the purchase of long-term investment, and $18.4 million used in purchase of fixed assets and intangible assets, offset by (ii) $1.54 billion in proceeds from short-term investments and time deposits, and $3.6 million cash received from other investing activities.
For 2023, $291.7 million net cash used in continuing investing activities was primarily attributable to (i) $1.80 billion used in purchase of short-term investments and time deposits, $22.1 million used in the purchase of long-term investment, and $18.4 million used in purchase of fixed assets and intangible assets, offset by (ii) $1.54 billion in proceeds from short-term investments and time deposits, and $3.6 million cash received from other investing activities. 124 Table of Contents Net Cash Used in Financing Activities For 2025, $54.1 million net cash used in continuing financing activities was used in the repurchase of shares.
We do not expect to adopt ASU No. 2024-03 early and we are currently evaluating the impact of adopting this standard on our consolidated financial statements.
We do not expect to adopt ASU No. 2025-10 early and we are currently evaluating the impact of adopting this standard on our consolidated financial statements.
Diluted net loss from continuing operations per share attributable to Sohu.com Limited was $3.13 in 2024, compared to $1.93 in 2023. 110 Table of Contents Factors and Trends Affecting our Business The range of mobile Internet services continues to expand, reflecting a continual shift in user activity from PCs to mobile devices and an increase in the number of Internet users.
Diluted net income from continuing operations per share attributable to Sohu.com Limited was $13.96 in 2025, compared to a diluted net loss from continuing operations per share attributable to Sohu.com Limited of $3.13 in 2024. 112 Table of Contents Factors and Trends Affecting our Business The range of mobile Internet services continues to expand, reflecting a continual shift in user activity from PCs to mobile devices and an increase in the number of Internet users.
We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or that engages in leasing, hedging or product development services with us. IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Segment Reporting (Topic 280).
We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or that engages in leasing, hedging or product development services with us. IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS Income Taxes (Topic 740).
Our Chinese mainland-based subsidiaries may also allocate a portion of their after-tax profits, at the discretion of their Boards of Directors, to their staff welfare and bonus funds. Any amounts so allocated may not be distributed by Sohu.com Limited or Changyou.com Limited and, accordingly, would not be available for distribution to Sohu.com Limited.
Our Chinese mainland-based subsidiaries may also allocate a portion of their after-tax profits, at the discretion of their Boards of Directors, to their staff welfare and bonus funds. Any amounts so allocated would not be available for distribution to Sohu.com Limited or our other Offshore entities.
Revenues from PC games were $359.3 million for 2024, compared to $368.7 million and $425.7 million, respectively, for 2023 and 2022, representing 72%, 77% and 73%, respectively, of Changyou’s online game revenues for the corresponding years. The dominant PC game operated by Changyou is TLBB.
Revenues from PC games were $412.7 million for 2025, compared to $359.3 million and $368.7 million, respectively, for 2024 and 2023, representing 82%, 72% and 77%, respectively, of Changyou’s online game revenues for the corresponding years. The dominant PC game operated by Changyou is TLBB PC.
We have focused our efforts on developing a portfolio of mobile products across our business lines. For Sohu, during 2024 we continued to refine our flagship Apps and enhance user experience by expanding premium content offerings, upgrading technology and algorithms, and integrating resources on our platform.
We have focused our efforts on developing a portfolio of mobile products across our business lines. For Sohu, during 2025 we continued to refine our flagship Apps and seek to better meet users’ needs and enhance user experience by expanding premium content offerings, upgrading technology and algorithms, and integrating resources on our platform.
Of the cash and cash equivalents held in financial institutions inside the Chinese mainland, $13.0 million was held by VIEs and $47.1 million was held by our Chinese mainland-based subsidiaries. We believe our current liquidity and capital resources are sufficient to meet anticipated working capital needs, commitments, capital expenditures, and investment activities for at least the next twelve months.
Of the cash and cash equivalents held in financial institutions inside the Chinese mainland, $14.4 million was held by VIEs and $41.2 million was held by our Chinese mainland-based subsidiaries. We believe our current liquidity and capital resources are sufficient to meet anticipated working capital needs, commitments, capital expenditures, and investment activities for at least the next twelve months.
Net Income/(Loss) As a result of the foregoing, we had a net loss from continuing operations of $100.2 million for 2024, compared to a net loss of $66.1 million and $17.3 million, respectively, for 2023 and 2022.
Net Income/(Loss) As a result of the foregoing, we had net income from continuing operations of $394.1 million for 2025, compared to a net loss of $100.2 million and $66.1 million, respectively, for 2024 and 2023.
As of December 31, 2024, we had obligations to provide, and advertisers had obligations to purchase, advertising services under existing contracts in the amount of $6.3 million that are required to be provided during the year ending December 31, 2025.
As of December 31, 2025, we had obligations to provide, and advertisers had obligations to purchase, marketing services under existing contracts in the amount of $9.3 million that are required to be provided during the year ending December 31, 2026.
Online Game Revenues Revenues from the online game business were $502.4 million for 2024, compared to $479.7 million and $585.4 million, respectively, for 2023 and 2022.
Online Game Revenues Revenues from the online game business were $505.7 million for 2025, compared to $502.4 million and $479.7 million, respectively, for 2024 and 2023.
Cost of Other Revenues Cost of other revenues was $10.8 million for 2024, compared to $9.6 million and $13.9 million, respectively, for 2023 and 2022.
Cost of Other Revenues Cost of other revenues was $6.2 million for 2025, compared to $10.8 million and $9.6 million, respectively, for 2024 and 2023.
Our capital expenditures were $19.9 million, $18.4 million, and $23.8 million, respectively, for the years ended December 31, 2024, 2023 and 2022.
Our capital expenditures were $9.7 million, $19.9 million, and $18.4 million, respectively, for the years ended December 31, 2025, 2024 and 2023.
Operating Profit/(Loss) We had an operating loss of $109.4 million for 2024, compared to operating loss of $87.3 million and $0.9 million, respectively, for 2023 and 2022. Other Income/(Expense) Other income was $22.1 million for 2024, compared to $35.7 million and $17.6 million, respectively, for 2023 and 2022.
Operating Profit/(Loss) We had an operating loss of $93.8 million for 2025, compared to operating loss of $109.4 million and $87.3 million, respectively, for 2024 and 2023. Other Income/(Expense) Other income was $16.6 million for 2025, compared to $22.1 million and $35.7 million, respectively, for 2024 and 2023.
ASU No. 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The guidance is effective for annual periods beginning after December 15, 2024 on a prospective basis. Early adoption is permitted.
In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740)-Improvements to Income Tax Disclosures . ASU No. 2023-09 requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The guidance is effective for annual periods beginning after December 15, 2024 on a prospective basis.
We had net income from discontinued operations of nil for 2024, compared to net income of $35.4 million and nil, respectively, for 2023 and 2022.
We had net income from discontinued operations of nil attributable to Sohu.com Limited for 2025, compared to net income of nil and $35.4 million attributable to Sohu.com Limited, respectively, for 2024 and 2023.
The year-on-year increase for 2024 was $1.2 million, which was mainly due to a $3.3 million increase in content and license costs related to paid subscription services, offset by a $1.8 million decrease in revenue-sharing payments related to payment channels.
The year-on-year decrease for 2025 was $4.6 million, which was mainly due to a $6.6 million decrease in content and license costs related to paid subscription services, and a $0.9 million decrease in revenue-sharing payments related to interactive broadcasting services, offset by a $3.2 million increase in revenue-sharing payments related to payment channels.
The decrease mainly consisted of a $13.3 million decrease in advertising and promotional expenses, offset by a $1.5 million increase in professional fees. General and Administrative Expenses General and administrative expenses were $50.9 million for 2024, compared to $48.9 million and $56.9 million, respectively, for 2023 and 2022.
The increase mainly consisted of a $28.1 million increase in advertising and promotional expenses, offset by a $3.2 million decrease in salary and benefits expenses, and a $2.1 million decrease in professional fees. General and Administrative Expenses General and administrative expenses were $73.2 million for 2025, compared to $50.9 million and $48.9 million, respectively, for 2024 and 2023.
The decrease included a $22.0 million decrease in revenue-sharing payments to licensors, game developers, and third-party Internet platforms, and a $1.1 million decrease in bandwidth service costs and a $0.6 million decrease in tax surcharges. Our online game gross margin was 82% for 2024, compared to 86% and 84%, respectively, for 2023 and 2022.
The increase included a $20.6 million increase in revenue-sharing payments to licensors, game developers, and third-party Internet platforms, and a $1.8 million increase in bandwidth service costs. Our online game gross margin was 86% for 2025, compared to 82% and 86%, respectively, for 2024 and 2023.
Going forward, Changyou plans to continue to enhance its capabilities in game design, game technology, and graphic quality; continue to embrace technological advances, such as artificial intelligence, to improve efficiency; and further invest in team building and talent development.
Going forward, Changyou plans to continue to enhance its capabilities in game design and game production; continue to embrace technological advances, such as AI technologies, to improve efficiency and drive innovation; and further invest in team building and talent development.
Our Offshore entities may not be able to obtain cash from distributions because our Chinese mainland-based subsidiaries and the VIEs in the Chinese mainland are subject to restrictions imposed by Chinese mainland law on paying such dividends and making other payments,” and “- Dividends we receive from our operating subsidiaries located in the Chinese mainland are subject to Chinese mainland profit appropriation and withholding tax,” See also “Restrictions and Limitations on Cash Available to Sohu.com Limited” below and Item 11 “Quantitative and Qualitative Disclosures About Market Risk - Foreign Currency Exchange Rate Risk.” Cash Generating Ability Our cash flows were summarized below (in thousands): Year Ended December 31, 2022 2023 2024 Net cash provided by/(used in) continuing operating activities $ 32,242 $ (25,567 ) $ (48,018 ) Net cash provided by/(used in) operating activities 32,242 (25,567 ) (48,018 ) Net cash used in continuing investing activities (232,789 ) (291,665 ) (113,360 ) Net cash used in investing activities (232,789 ) (291,665 ) (113,360 ) Net cash used in continuing financing activities (82,136 ) (6,560 ) (40,875 ) Net cash used in financing activities (82,136 ) (6,560 ) (40,875 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash (16,773 ) (11,982 ) (3,508 ) Net decrease in cash, cash equivalents and restricted cash (299,456 ) (335,774 ) (205,761 ) Cash, cash equivalents and restricted cash at beginning of period 1,000,918 701,462 365,688 Cash, cash equivalents and restricted cash at end of period $ 701,462 $ 365,688 $ 159,927 Cash, cash equivalents and restricted cash of continuing operations, end of year 701,462 365,688 159,927 121 Table of Contents Net Cash Provided by/(Used in) Operating Activities For 2024, $48.0 million net cash used in continuing operating activities was primarily attributable to our net loss of $100.2 million, adjusted by (i) the add back of non-cash items consisting of $24.7 million of depreciation and amortization expenses, $1.3 million of allowance for credit losses, $0.9 million of impairment of other intangible assets and other assets, and $0.3 million of investment income from long-term investments, (ii) offset by $4.9 million of change in fair value of financial instruments, and $0.3 million from disposal of fixed assets.
Key Information - Risk Factors - Risks Related to the Chinese Mainland’s Regulatory Environment - Restrictions on currency exchange may limit our ability to use our revenues effectively,” “- Sohu.com Limited and our other Offshore entities may not be able to obtain cash from dividends distributed by our Chinese mainland-based subsidiaries because such subsidiaries and VIEs located in the Chinese mainland are subject to restrictions imposed by Chinese mainland law on paying such dividends and making other payments.” See also “Restrictions and Limitations on Cash Available to Sohu.com Limited” below and Item 11 “Quantitative and Qualitative Disclosures About Market Risk - Foreign Currency Exchange Rate Risk.” 123 Table of Contents Cash Generating Ability Our cash flows were summarized below (in thousands): Year Ended December 31, 2023 2024 2025 Net cash used in continuing operating activities $ (25,567 ) $ (48,018 ) $ (4,762 ) Net cash used in operating activities (25,567 ) (48,018 ) (4,762 ) Net cash provided by/(used in) continuing investing activities (291,665 ) (113,360 ) 24,843 Net cash provided by/(used in) investing activities (291,665 ) (113,360 ) 24,843 Net cash used in continuing financing activities (6,560 ) (40,875 ) (54,077 ) Net cash used in financing activities (6,560 ) (40,875 ) (54,077 ) Effect of exchange rate changes on cash, cash equivalents and restricted cash (11,982 ) (3,508 ) 2,377 Net decrease in cash, cash equivalents and restricted cash (335,774 ) (205,761 ) (31,619 ) Cash, cash equivalents and restricted cash at beginning of period 701,462 365,688 159,927 Cash, cash equivalents and restricted cash at end of period $ 365,688 $ 159,927 $ 128,308 Cash, cash equivalents and restricted cash of continuing operations, end of year 365,688 159,927 128,308 Net Cash Used in Operating Activities For 2025, $4.8 million net cash used in continuing operating activities was primarily attributable to our net income of $394.1 million, adjusted by (i) the add back of non-cash items consisting of $37.0 million of goodwill impairment, $25.0 million of depreciation and amortization expenses, $3.9 million of change in fair value of financial instruments, $1.5 million of share-based compensation expense, and $0.9 million of allowance for credit losses, (ii) offset by $271.8 million of deferred income tax benefit resulting primarily from a reversal of withholding income tax expense related to Changyou, $0.6 million of disposal of fixed assets, and $0.5 million of investment income from long-term investments.
Net income/(Loss) attributable to Sohu.com Limited As a result of the foregoing, we had a net loss from continuing operations of $100.3 million attributable to Sohu.com Limited for 2024, compared to net loss of $65.8 million and $17.3 million attributable to Sohu.com Limited, respectively, for 2023 and 2022. 120 Table of Contents We had net income from discontinued operations of nil attributable to Sohu.com Limited for 2024, compared to net income of $35.4 million and nil attributable to Sohu.com Limited, respectively, for 2023 and 2022.
Net income/(Loss) attributable to Sohu.com Limited As a result of the foregoing, we had net income from continuing operations of $394.1 million attributable to Sohu.com Limited for 2025, compared to a net loss of $100.3 million and $65.8 million attributable to Sohu.com Limited, respectively, for 2024 and 2023.
The average amount spent per advertiser was approximately $66,000, $56,000 and $61,000, respectively, for 2024, 2023 and 2022. Changyou Revenues from Changyou’s 17173.com Website were $3.8 million for 2024, compared to $5.0 million and $6.9 million, respectively, for 2023 and 2022. The number of advertisers was 62, 60 and 67, respectively, for 2024, 2023 and 2022.
The number of advertisers was 819, 1,059 and 1,493, respectively, for 2025, 2024 and 2023. The average amount spent per advertiser was approximately $69,000, $66,000, and $56,000, respectively, for 2025, 2024 and 2023. Changyou Revenues from Changyou’s 17173.com Website were $3.2 million for 2025, compared to $3.8 million and $5.0 million, respectively, for 2024 and 2023.
The year-on-year decrease for 2024 was $4.5 million, which mainly consisted of a $2.4 million decrease in bandwidth service costs, a $1.1 million decrease in costs incurred for content marketing campaigns, and a $1.1 million decrease in salary and benefits expenses.
The year-on-year decrease for 2024 was $4.5 million, which mainly consisted of a $2.4 million decrease in bandwidth service costs, a $1.1 million decrease in costs incurred for content marketing campaigns, and a $1.1 million decrease in salary and benefits expenses. Our marketing services gross margin was 11% for 2025, compared to 9% and 20%, respectively, for 2024 and 2023.
Our online game business generated revenues of $502.4 million, with a 5% annual increase, representing 84% of total revenues. In 2024, our net loss from continuing operations was $100.2 million, compared to $66.1 million in 2023.
Our online game business generated revenues of $505.7 million, with a 1% annual increase, representing 87% of total revenues. In 2025, our net income from continuing operations was $394.1 million, compared to a net loss from continuing operations of $100.2 million in 2024.
For a detailed discussion of our significant accounting policies and related judgments, please see “Note 2 - Summary of Significant Accounting Policies.” You should read the following description of critical accounting estimates in conjunction with our consolidated financial statements and other disclosures included in this annual report. 111 Table of Contents Goodwill Impairment Assessment for the Sohu Reporting Unit Nature of estimate: The Sohu segment has only one reporting unit, which is the Sohu reporting unit.
For a detailed discussion of our significant accounting policies and related judgments, please see “Note 2 - Summary of Significant Accounting Policies.” You should read the following description of critical accounting estimates in conjunction with our consolidated financial statements and other disclosures included in this annual report.
See “Note 2 - Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements for more information regarding expected credit losses. 112 Table of Contents RESULTS OF OPERATIONS Revenues The following table presents our revenues by revenue source and by proportion for the periods indicated (in thousands, except percentages): Year ended December 31, 2022 2023 2024 2023 VS 2022 2024 VS 2023 Amount Percentage Amount Percentage Amount Percentage Amount Incremental ratio Amount Incremental ratio Revenues: Brand advertising $ 103,233 14 % $ 88,689 15 % $ 73,465 12 % $ (14,544 ) (14 )% $ (15,224 ) (17 )% Online games 585,424 80 % 479,697 80 % 502,389 84 % (105,727 ) (18 )% 22,692 5 % Others 45,215 6 % 32,286 5 % 22,545 4 % (12,929 ) (29 )% (9,741 ) (30 )% Total revenues $ 733,872 100 % $ 600,672 100 % $ 598,399 100 % $ (133,200 ) (18 )% $ (2,273 ) 0 % 113 Table of Contents Brand Advertising Revenues Brand advertising revenues were $73.5 million for 2024, compared to $88.7 million and $103.2 million, respectively, for 2023 and 2022.
See “Note 2 - Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements for more information regarding expected credit losses. 114 Table of Contents RESULTS OF OPERATIONS Revenues The following table presents our revenues by revenue source and by proportion for the periods indicated (in thousands, except percentages): Year ended December 31, 2023 2024 2025 2024 vs 2023 2025 vs 2024 Amount Percentage Amount Percentage Amount Percentage Amount Incremental ratio Amount Incremental ratio Revenues: Marketing services $ 88,689 15 % $ 73,465 12 % $ 59,972 10 % $ (15,224 ) (17 )% $ (13,493 ) (18 )% Online games 479,697 80 % 502,389 84 % 505,738 87 % 22,692 5 % 3,349 1 % Others 32,286 5 % 22,545 4 % 18,623 3 % (9,741 ) (30 )% (3,922 ) (17 )% Total revenues $ 600,672 100 % $ 598,399 100 % $ 584,333 100 % $ (2,273 ) 0 % $ (14,066 ) (2 )% 115 Table of Contents Marketing Services Revenues Marketing services revenues were $60.0 million for 2025, compared to $73.5 million and $88.7 million, respectively, for 2024 and 2023.
Interest Income Interest income was $38.6 million for 2024, compared to $45.2 million and $17.3 million, respectively, for 2023 and 2022. Income Tax Expense Income tax expense was $52.1 million for 2024, compared to $60.4 million and $57.9 million, respectively, for 2023 and 2022.
Interest Income Interest income was $29.1 million for 2025, compared to $38.6 million and $45.2 million, respectively, for 2024 and 2023. Income Tax Expense/(Benefit) Income tax benefit was $443.6 million for 2025, compared to income tax expense of $52.1 million and $60.4 million, respectively, for 2024 and 2023.
These events brought together users with common interests to our platform and enhanced vitality and engagement within our user community. To attract and retain users, we have incurred expenses for content and user acquisition, as well as for promotion of our products and services. We may increase such expenditures in the future.
To attract and retain users, we have incurred expenses for content and user acquisition, as well as for promotion of our products and services. We may increase such expenditures in the future.
For 2022, $232.8 million net cash used in continuing investing activities was primarily attributable to (i) $2.15 billion used in purchase of short-term investments and time deposits, and $23.8 million used in purchase of fixed assets and intangible assets, offset by (ii) $1.94 billion in proceeds from short-term investments and $6.3 million cash received from other investing activities.
Net Cash Provided by/(Used in) Investing Activities For 2025, $24.8 million net cash provided by continuing investing activities was primarily attributable to (i) $1.86 billion in proceeds from short-term investments and time deposits, and $0.9 million in cash received from other investing activities, offset by (ii) $1.83 billion used in the purchase of short-term investments and time deposits, and $9.7 million used in the purchase of fixed assets and intangible assets.
For 2022, $32.2 million net cash provided by continuing operation activities was primarily attributable to our net loss of $17.3 million, adjusted by (i) the add back of non-cash items consisting of $31.3 million of depreciation and amortization expenses, $12.0 million of impairment of a long-term investment, $6.2 million of investment income from equity investments, $4.9 million of share-based compensation expense, and $2.0 million of impairment of other intangible assets and other assets, (ii) offset by $10.3 million of change in fair value of financial instruments, and $0.3 million from disposal of fixed assets.
For 2024, $48.0 million net cash used in continuing operating activities was primarily attributable to our net loss of $100.2 million, adjusted by (i) the add back of non-cash items consisting of $24.7 million of depreciation and amortization expenses, $1.3 million of allowance for credit losses, $0.9 million of impairment of other intangible assets and other assets, and $0.3 million of investment income from long-term investments, (ii) offset by $4.9 million of change in fair value of financial instruments, and $0.3 million from disposal of fixed assets.
The increase included a $20.6 million increase in revenue-sharing payments to licensors, game developers, and third-party Internet platforms, and a $1.8 million increase in bandwidth service costs. The year-on-year decrease in cost of online game revenues for 2023 was $26.0 million.
The decrease included a $12.3 million decrease in revenue-sharing payments to licensors, game developers, and third-party Internet platforms, a $2.9 million decrease in salary and benefits expenses, and a $1.5 million decrease in bandwidth service costs. The year-on-year increase in cost of online game revenues for 2024 was $23.5 million.
The fair value determined using the income approach is compared with comparable market data and reconciled, as necessary. The fair value of the Sohu reporting unit also includes cash not required for working capital and the fair value of real estate held by the Sohu reporting unit for the production of rental income.
The fair value of the Sohu reporting unit also includes cash not required for working capital and the fair value of real estate held by the Sohu reporting unit for the production of rental income.
Sales and Marketing Expenses Sales and marketing expenses were $235.8 million for 2024, compared to $213.4 million and $225.5 million, respectively, for 2023 and 2022. The year-on-year increase for 2024 was $22.4 million, representing a year-on-year increase of 10%.
Sales and Marketing Expenses Sales and marketing expenses were $189.0 million for 2025, compared to $235.8 million and $213.4 million, respectively, for 2024 and 2023. The year-on-year decrease for 2025 was $46.8 million, representing a year-on-year decrease of 20%.
Share-based Compensation Expense Share-based compensation expense was recognized in costs and expenses for the years ended December 31, 2022, 2023 and 2024 as follows (in thousands): Year Ended December 31, Share-based compensation expense 2022 2023 2024 Cost of revenues $ 191 $ 17 $ 1 Product development expenses 2,026 156 19 Sales and marketing expenses 128 26 22 General and administrative expenses 2,594 509 (72 ) $ 4,939 $ 708 $ (30 ) 119 Table of Contents Share-based compensation expense was recognized for share-based awards of Sohu and Changyou for the years ended December 31, 2022, 2023 and 2024 as follows (in thousands): Year Ended December 31, Share-based compensation expense 2022 2023 2024 For Sohu share-based awards $ 677 $ 96 $ 73 For Changyou share-based awards 4,262 612 (103 ) $ 4,939 $ 96 $ (30 ) There was no capitalized share-based compensation expense for the years ended December 31, 2022, 2023 and 2024.
See “Note 13 - Goodwill” of the Notes to Consolidated Financial Statements for more information. 121 Table of Contents Share-based Compensation Expense Share-based compensation expense was recognized in costs and expenses for the years ended December 31, 2023, 2024 and 2025 as follows (in thousands): Year Ended December 31, Share-based compensation expense 2023 2024 2025 Cost of revenues $ 17 $ 1 $ 0 Product development expenses 156 19 0 Sales and marketing expenses 26 22 6 General and administrative expenses 509 (72 ) 1,493 $ 708 $ (30 ) $ 1,499 Share-based compensation expense was recognized for share-based awards of Sohu and Changyou for the years ended December 31, 2023, 2024 and 2025 as follows (in thousands): Year Ended December 31, Share-based compensation expense 2023 2024 2025 For Sohu share-based awards $ 96 $ 73 $ 6 For Changyou share-based awards 612 (103 ) 1,493 $ 96 $ (30 ) $ 1,499 There was no capitalized share-based compensation expense for the years ended December 31, 2023, 2024 and 2025.
The year-on-year decrease for 2023 was $12.9 million, which was mainly attributable to a $12.3 million decrease in revenue from Sohu’s paid subscription services, a $1.4 million decrease in Sohu’s interactive broadcasting services, and a $0.8 million increase in Sohu’s revenue sharing from other platforms. 115 Table of Contents Costs and Expenses Cost of Revenues The following table presents our cost of revenues by source and by proportion for the periods indicated (in thousands, except percentages): Year ended December 31, 2022 2023 2024 2023 VS 2022 2024 VS 2023 Amount Percentage Amount Percentage Amount Percentage Amount Incremental ratio Amount Incremental ratio Cost of revenues: Brand advertising $ 86,642 45 % $ 71,103 48 % $ 66,579 40 % $ (15,539 ) (18 )% $ (4,524 ) (6 )% Online games 91,001 48 % 65,029 45 % 88,495 53 % (25,972 ) (29 )% 23,466 36 % Others 13,930 7 % 9,625 7 % 10,759 7 % (4,305 ) (31 )% 1,134 12 % Total cost of revenues $ 191,573 100 % $ 145,757 100 % $ 165,833 100 % $ (45,816 ) (24 )% $ 20,076 14 % 116 Table of Contents Cost of Brand Advertising Revenues Cost of brand advertising revenues was $66.6 million for 2024, compared to $71.1 million and $86.6 million, respectively, for 2023 and 2022.
The year-on-year decrease for 2024 was $9.8 million, which was mainly attributable to a $7.1 million decrease in revenue from paid subscription services, and a $1.2 million decrease in revenue sharing from other platforms. 117 Table of Contents Costs and Expenses Cost of Revenues The following table presents our cost of revenues by source and by proportion for the periods indicated (in thousands, except percentages): Year ended December 31, 2023 2024 2025 2024 vs 2023 2025 vs 2024 Amount Percentage Amount Percentage Amount Percentage Amount Incremental ratio Amount Incremental ratio Cost of revenues: Marketing services $ 71,103 48 % $ 66,579 40 % $ 53,451 41 % $ (4,524 ) (6 )% $ (13,128 ) (20 )% Online games 65,029 45 % 88,495 53 % 71,804 54 % 23,466 36 % (16,691 ) (19 )% Others 9,625 7 % 10,759 7 % 6,234 5 % 1,134 12 % (4,525 ) (42 )% Total cost of revenues $ 145,757 100 % $ 165,833 100 % $ 131,489 100 % $ 20,076 14 % $ (34,344 ) (21 )% 118 Table of Contents Cost of Marketing Services Revenues Cost of marketing services revenues was $53.5 million for 2025, compared to $66.6 million and $71.1 million, respectively, for 2024 and 2023.
The year-on-year decrease for 2023 was $4.3 million, which was mainly due to a $4.6 million decrease in revenue-sharing payments related to payment channels. 117 Table of Contents Operating Expenses The following table presents our operating expenses by nature and by proportion for the periods indicated (in thousands, except percentages): Year ended December 31, 2022 2023 2024 2023 VS 2022 2024 VS 2023 Amount Percentage Amount Percentage Amount Percentage Amount Incremental ratio Amount Incremental ratio Operating expenses: Product development $ 260,772 48 % $ 279,842 52 % $ 255,233 47 % $ 19,070 7 % $ (24,609 ) (9 )% Sales and marketing 225,480 41 % 213,449 39 % 235,824 44 % (12,031 ) (5 )% 22,375 10 % General and administrative 56,920 11 % 48,934 9 % 50,910 9 % (7,986 ) (14 )% 1,976 4 % Total operating expenses $ 543,172 100 % $ 542,225 100 % $ 541,967 100 % $ (947 ) 0 % $ (258 ) 0 % 118 Table of Contents Product Development Expenses Product development expenses were $255.2 million for 2024, compared to $279.8 million and $260.8 million, respectively, for 2023 and 2022.
The year-on-year increase for 2024 was $1.2 million, which was mainly due to a $3.3 million increase in content and license costs related to paid subscription services, offset by a $1.8 million decrease in revenue-sharing payments related to payment channels. 119 Table of Contents Operating Expenses The following table presents our operating expenses by nature and by proportion for the periods indicated (in thousands, except percentages): Year ended December 31, 2023 2024 2025 2024 vs 2023 2025 vs 2024 Amount Percentage Amount Percentage Amount Percentage Amount Incremental ratio Amount Incremental ratio Operating expenses: Product development $ 279,842 52 % $ 255,233 47 % $ 247,507 45 % $ (24,609 ) (9 )% $ (7,726 ) (3 )% Sales and marketing 213,449 39 % 235,824 44 % 188,989 35 % 22,375 10 % (46,835 ) (20 )% General and administrative 48,934 9 % 50,910 9 % 73,198 13 % 1,976 4 % 22,288 44 % Goodwill impairment 0 0 % 0 0 % 36,955 7 % 0 0 % 36,955 100 % Total operating expenses $ 542,225 100 % $ 541,967 100 % $ 546,649 100 % $ (258 ) 0 % $ 4,682 1 % 120 Table of Contents Product Development Expenses Product development expenses were $247.5 million for 2025, compared to $255.2 million and $279.8 million, respectively, for 2024 and 2023.
However, such VIEs have in the past, and may again in the future, hold significant cash balances. As the VIEs are not owned by our Chinese mainland-based subsidiaries or any of our subsidiaries outside of the Chinese mainland, they are not able to make dividend payments to those subsidiaries.
As the VIEs are not owned by our Chinese mainland-based subsidiaries or any of our subsidiaries outside of the Chinese mainland, they are not able to make dividend payments to those subsidiaries.
The year-on-year decrease for 2024 was $9.8 million, which was mainly attributable to a $7.1 million decrease in revenue from Sohu’s paid subscription services, and a $1.2 million decrease in Sohu’s revenue sharing from other platforms.
The year-on-year decrease for 2025 was $3.9 million, which was mainly attributable to a $1.3 million decrease in revenue from paid subscription services, and a $1.1 million decrease in interactive broadcasting services.
Under regulations of the SAFE, the RMB is not convertible into foreign currencies for capital account items, such as loans, repatriation of investments and investments outside of the Chinese mainland, unless prior approval of the SAFE is obtained and prior registration with the SAFE is made.
Under regulations of the SAFE, the RMB is not convertible into foreign currencies for capital account items, such as loans, repatriation of investments and investments outside of the Chinese mainland, unless prior approval of the SAFE is obtained and prior registration with the SAFE is made. 125 Table of Contents Chinese Mainland Restrictions Related to the VIE Structure A significant portion of our operations is conducted through VIEs, which generate a significant amount of our revenues.
Further, we have continually innovated our content offerings and combined them to customized brand marketing solutions for advertisers through various events, which have not only generated premium content but also gained recognition from both users and advertisers. These events demonstrated our competitive advantages and consolidated our position as a mainstream media platform.
Further, we have continually innovated our content offerings and combined them to customized brand marketing solutions for advertisers through various campaigns, which have generated premium content, gained recognition from both users and advertisers and further consolidated our brand influence and monetization value.
As of December 31, 2024, we had cash and cash equivalents of approximately $159.9 million, short-term investments of $744.5 million, and long-term time deposits of $331.3 million. Of our cash and cash equivalents, $60.1 million was held in financial institutions inside the Chinese mainland and $99.8 million was held in financial institutions outside of the Chinese mainland.
As of December 31, 2025, we had cash and cash equivalents of approximately $128.3 million, short-term investments of $702.4 million, and long-term time deposits of $350.7 million. Of our cash and cash equivalents, $55.6 million was held in financial institutions inside the Chinese mainland and $72.7 million was held in financial institutions outside of the Chinese mainland.
Assumptions: The Sohu reporting unit estimated the fair values by using the income approach and the market approach. The income approach considers a number of factors that include expected future cash flows, revenue growth rates, the discount rate, and profitability. The market approach considers earnings multipliers based on market data of comparable companies engaged in a similar business.
We conduct impairment tests by quantitatively comparing the fair value of the reporting unit to its carrying value. Assumptions: The Sohu reporting unit estimated the fair values by using the income approach and the market approach. The income approach considers a number of factors that include expected future cash flows, revenue growth rates, the discount rate, and profitability.
Net Income/(loss) Attributable to Noncontrolling Interest Our net income from continuing operations attributable to noncontrolling interest was $31,000 for 2024, compared to net loss from continuing operations attributable to noncontrolling interest of $265,000, and net income attributable to noncontrolling interest of $2,000, respectively, for 2023 and 2022.
We had net income from discontinued operations of nil for 2025, compared to net income of nil and $35.4 million, respectively, for 2024 and 2023. 122 Table of Contents Net Income/(loss) Attributable to Noncontrolling Interest Our net loss from continuing operations attributable to noncontrolling interest was $9,000 for 2025, compared to net income from continuing operations attributable to noncontrolling interest of $31,000, and a net loss attributable to noncontrolling interest of $265,000, respectively, for 2024 and 2023.
Our brand advertising gross margin was 9% for 2024, compared to 20% and 16%, respectively, for 2023 and 2022. Cost of Online Game Revenues Cost of online game revenues was $88.5 million for 2024, compared to $65.0 million and $91.0 million, respectively, for 2023 and 2022. The year-on-year increase in cost of online game revenues for 2024 was $23.5 million.
Cost of Online Game Revenues Cost of online game revenues was $71.8 million for 2025, compared to $88.5 million and $65.0 million, respectively, for 2024 and 2023. The year-on-year decrease in cost of online game revenues for 2025 was $16.7 million.
The increase mainly consisted of a $28.1 million increase in advertising and promotional expenses, offset by a $3.2 million decrease in salary and benefits expenses, and a $2.1 million decrease in professional fees. The year-on-year decrease for 2023 was $12.1 million, representing a year-on-year decrease of 5%.
The decrease mainly consisted of a $40.4 million decrease in advertising and promotional expenses, and a $5.7 million decrease in salary and benefits expenses. The year-on-year increase for 2024 was $22.4 million, representing a year-on-year increase of 10%.
While maintaining its core competitiveness in MMORPGs, Changyou also plans to expand its game portfolio with additional types of card-based RPGs, sports games, casual games, and strategy games.
While maintaining its core competitiveness in MMORPGs, Changyou also plans to expand its game portfolio with additional types of card-based RPGs, sports games, casual games, and strategy games. CRITICAL ACCOUNTING ESTIMATES Our discussion and analysis of our financial condition and results of operations relates to our consolidated financial statements, which have been prepared in accordance with U.S. GAAP.
The advertising market continued to face uncertainties, which have had, and may continue to have, an adverse impact on our revenues and results of operations. For Changyou, overall online game revenues for 2024 increased year-over-year, benefiting from the launch of new mobile games and the revitalization of legacy games during the year.
The advertising market continued to face uncertainties, which have had, and may continue to have, an adverse impact on our revenues and results of operations.
The year-on-year decrease for 2023 was $15.5 million, which mainly consisted of an $8.0 million decrease in bandwidth service costs, a $4.1 million decrease in costs incurred for content marketing campaigns, a $2.5 million decrease in depreciation and amortization expenses, and a $1.4 million decrease in salary and benefits expenses.
The year-on-year decrease for 2025 was $13.1 million, which mainly consisted of a $9.4 million decrease in salary and benefits expenses, and a $3.2 million decrease in content and license costs.
CRITICAL ACCOUNTING ESTIMATES Our discussion and analysis of our financial condition and results of operations relates to our consolidated financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, costs and expenses, and related disclosures.
The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues, costs and expenses, and related disclosures.
Other accounting standards that we adopted beginning January 1, 2024 did not have a significant impact on our consolidated financial statements. 124 Table of Contents IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS NOT YET EFFECTIVE Income Taxes (Topic 740). In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740)-Improvements to Income Tax Disclosures .
Early adoption is permitted. The adoption of this standard did not have a material impact on our consolidated financial statements. Other accounting standards that we adopted beginning January 1, 2025 did not have a significant impact on our consolidated financial statements. 126 Table of Contents IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS NOT YET EFFECTIVE Income Statement (Topic 220) .
During 2024, as market competition intensified and user demands increased, Changyou adhered to its “Top Games” strategy, kept close track of changing market trends and user demand, continued to optimize its development process for new games, and refined and revitalized its older games. Changyou also stepped up its efforts to expand international presence.
For Changyou, during 2025, as market competition further intensified and user demands kept evolving, Changyou adhered to its “Top Games” strategy, kept close track of changing market trends and user demand, continued to optimize its development process to improve product success rate and game-development efficiency.
CONTRACTUAL OBLIGATIONS The following table sets forth our contractual obligations as of December 31, 2024 (in thousands): 2025 2026 2027 2028 2029 Thereafter Total Purchase of content and services 13,033 282 55 0 0 0 13,370 Operating lease obligations 4,364 3,989 113 0 0 0 8,466 Royalties and expenditures for licensed content of games $ 3,978 1,391 695 1,043 0 0 7,107 Purchase of bandwidth 5,191 87 8 0 0 0 5,286 Others 271 0 0 0 0 0 271 Total Payments Required $ 26,837 5,749 871 1,043 0 0 34,500 OTHER LONG-TERM LIABILITIES We recorded long-term tax liabilities of $211.8 million, consisting primarily of a $15.3 million in interest on the unrecognized tax benefit related to the Toll Charge, and $196.5 million related to certain business transactions that took place in previous years and management determined may result in additional tax obligations under relevant tax rules.
CONTRACTUAL OBLIGATIONS The following table sets forth our contractual obligations as of December 31, 2025 (in thousands): 2026 2027 2028 2029 2030 Thereafter Total Purchase of content and services 8,558 690 5 0 0 0 9,253 Operating lease obligations 4,381 411 65 0 0 0 4,857 Purchase of bandwidth 4,756 0 0 0 0 0 4,756 Royalties and expenditures for licensed content of games $ 1,423 712 1,067 0 0 0 3,202 Others 188 60 0 0 0 0 248 Total Payments Required $ 19,306 1,873 1,137 0 0 0 22,316 OTHER LONG-TERM LIABILITIES We recorded long-term tax liabilities of $13.1 million related to certain business transactions that took place in previous years and management determined may result in additional tax obligations under relevant tax rules.
For the year ended December 31, 2024, our total revenues were approximately $598.4 million, stable compared to 2023, and our gross margin decreased from 76% to 72%. Our brand advertising business generated revenues of $73.5 million, with a 17% annual decrease, representing 12% of total revenues.
For the year ended December 31, 2025, our total revenues were approximately $584.3 million, representing a decrease of 2% compared to 2024, and our gross margin increased from 72% to 77%. Our marketing services business generated revenues of $60.0 million, with an 18% annual decrease, representing 10% of total revenues.
In 2024, TLBB PC generated revenues of $309.2 million, accounting for approximately 62% of Changyou’s online game revenues, approximately 61% of Changyou’s total revenues, and approximately 52% of the Sohu Group’s total revenues. The year-on-year decrease in PC game revenues for 2024 was $9.4 million, mainly due to a natural decline in TLBB PC.
In 2025, TLBB PC generated revenues of $306.9 million, accounting for approximately 61% of Changyou’s online game revenues, approximately 60% of Changyou’s total revenues, and approximately 53% of the Sohu Group’s total revenues.
Key Information - Risk Factors - Risks Related to the Chinese Mainland’s Regulatory Environment - Restrictions on currency exchange may limit our ability to use our revenues effectively,” “- Our Offshore entities may need to rely on dividends and other distributions on equity paid by our Chinese mainland-based subsidiaries, including the Chinese mainland-based subsidiaries of our subsidiary Changyou, to fund any cash requirements those Offshore entities may have.
Sohu.com Limited and our other Offshore entities may need to rely on dividends and other distributions on equity paid by Chinese mainland-based subsidiaries to fund any cash requirements those Offshore entities may have.
In 2024, the mobile game Legacy TLBB Mobile generated revenues of $44.4 million, accounting for approximately 9% of Changyou’s online game revenues, approximately 9% of Changyou’s total revenues, and approximately 7% of the Sohu Group’s total revenues. The year-on-year increase in mobile game revenues for 2024 was $32.1 million, mainly due to the revenue contribution from several new games.
The dominant mobile game operated by Changyou was Legacy TLBB Mobile. In 2025, the mobile game Legacy TLBB Mobile generated revenues of $41.4 million, accounting for approximately 8% of Changyou’s online game revenues, approximately 8% of Changyou’s total revenues, and approximately 7% of the Sohu Group’s total revenues.
Since substantially all of our operations are conducted through our indirect Chinese mainland-based subsidiaries and the VIEs that we consolidate under U.S. GAAP (ASC 810), all of Sohu.com Limited’s direct subsidiaries may need to rely on dividends, loans or advances made by our Chinese mainland-based subsidiaries and the VIEs in order to make dividends and other distributions to us.
Restrictions and Limitations on Cash Available to Sohu.com Limited Sohu.com Limited is a holding company with no operating assets other than investments in the Chinese mainland-based operating entities through our intermediate Offshore holding companies. Substantially all of our operations are conducted through our indirect Chinese mainland-based subsidiaries and the VIEs that we consolidate under U.S. GAAP (ASC 810).
Revenues from mobile games were $143.1 million for 2024, compared to $111.0 million and $159.7 million, respectively, for 2023 and 2022. The dominant mobile game operated by Changyou was Legacy TLBB Mobile.
The year-on-year increase in PC game revenues for 2025 was $53.4 million, mainly due to the revenue contribution from TLBB: Return, a new game that Changyou launched in 2025. Revenues from mobile games were $93.0 million for 2025, compared to $143.1 million and $111.0 million, respectively, for 2024 and 2023.
Chinese Mainland Restrictions Related to the VIE Structure A significant portion of our operations is conducted through VIEs, which generate a significant amount of our revenues. As of December 31, 2024, none of the VIEs that we consolidate in our financial statements under U.S. GAAP (ASC 810) held significant cash balances.
As of December 31, 2025, none of the VIEs that we consolidate in our financial statements under U.S. GAAP (ASC 810) held significant cash balances. However, such VIEs have in the past, and may again in the future, hold significant cash balances.
ASU No. 2024-03 requires publicly-traded business entities to disclose specified information about the components of certain costs and expenses that are currently disclosed in financial statements. The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted.
The guidance is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We do not expect to adopt ASU No. 2024-03 early and we are currently evaluating the impact of adopting this standard on our consolidated financial statements. Financial Instruments - Credit Losses (Topic 326).
The year-on-year reduction in brand advertising revenues resulted mainly from changes in the macroeconomic environment and intensified industry-wide competition in the Chinese mainland. Sohu Revenues from Sohu were $69.7 million for 2024, compared to $83.7 million and $96.4 million, respectively, for 2023 and 2022. The number of advertisers was 1,059, 1,493 and 1,570, respectively, for 2024, 2023 and 2022.
The year-on-year reduction in marketing services revenues resulted mainly from changes in the macroeconomic environment, as well as an imbalance between strong supply and weak demand in the Chinese mainland market. Sohu Revenues from Sohu were $56.8 million for 2025, compared to $69.7 million and $83.7 million, respectively, for 2024 and 2023.
The increase mainly consisted of a $6.8 million increase in bandwidth service expenses, a $5.2 million increase in salary and benefits expenses, a $4.0 million increase in content and license costs, and a $3.9 million increase in content and license impairments, offset by a $1.9 million decrease in share-based compensation expense.
The year-on-year decrease for 2025 was $7.7 million, representing a year-on-year decrease of 3%. The decrease mainly consisted of an $8.9 million decrease in content and license costs, offset by a $1.5 million increase in professional fees. The year-on-year decrease for 2024 was $24.6 million, representing a year-on-year decrease of 9%.
As of December 31, 2024, 2023 and 2022, we recorded $2.1 million, $2.7 million and $2.8 million, respectively, of receipts in advance from advertisers.
Other information Sales to our five largest advertising agencies and advertisers comprised approximately 24% of total marketing services revenues for 2025, compared to 24% and 28%, respectively, for 2024 and 2023. As of December 31, 2025, 2024 and 2023, we recorded $2.5 million, $2.1 million and $2.7 million, respectively, of receipts in advance from advertisers.
The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Adoption of this guidance should be applied retrospectively to all prior periods presented. Early adoption is permitted. The adoption of this standard did not have a material impact on our consolidated financial statements.
The guidance is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted. We do not expect to adopt ASU No. 2025-05 early and we are currently evaluating the impact of adopting this standard on our consolidated financial statements. Intangibles (Topic 350) .
The goodwill balance associated with the Sohu reporting unit was $36.7 million as of December 31, 2024. We conduct an annual impairment test as of October 1 of each year, or more frequently if events or circumstances indicate an impairment may exist. We conduct impairment tests by quantitatively comparing the fair value of the reporting unit to its carrying value.
Goodwill Impairment Assessment for the Sohu Reporting Unit Nature of estimate: The Sohu segment has only one reporting unit, which is the Sohu reporting unit. 113 Table of Contents We conduct an annual impairment test as of October 1 of each year, or more frequently if events or circumstances indicate an impairment may exist.
The year-on-year increase for 2024 was $2.0 million, representing a year-on-year increase of 4%. The increase mainly consisted of a $1.7 million increase in bad debts expense. The year-on-year decrease for 2023 was $8.0 million, representing a year-on-year decrease of 14%.
The year-on-year increase for 2025 was $22.3 million, representing a year-on-year increase of 44%. The increase consisted of a $13.4 million increase in expenses related to legal proceedings and professional fees, and a $7.8 million increase in salary and benefits expenses. The year-on-year increase for 2024 was $2.0 million, representing a year-on-year increase of 4%.
Based on the annual impairment test conducted as of October 1, 2024, the fair value of the reporting unit exceeded the carrying value, indicating that the goodwill was not impaired. Our estimate of the key assumptions did not change significantly throughout the periods presented.
The market capitalization of the Sohu Group was also considered in determining the reasonableness of estimated fair value. Based on the annual impairment test conducted as of October 1, 2025, the fair value of the reporting unit was less than its carrying value, indicating that the goodwill was impaired.
See “Note 2 - Summary of Significant Accounting Policies” of the Notes to Consolidated Financial Statements for more information regarding goodwill.
We recognized a $37.0 million goodwill impairment loss for the year ended December 31, 2025. The nature of the key assumptions did not change significantly throughout the periods presented. See “Note 2 - Summary of Significant Accounting Policies” and “Note 13 - Goodwill” of the Notes to Consolidated Financial Statements for more information regarding goodwill.
We continued to work on a series of science-related live broadcasts, including highly regarded IPs, which we believe reinforced our reputation as a leading knowledge and science-based live broadcasting platform. In addition, leveraging the synergy of our product matrix, we continued to integrate our various influential events centered on different verticals, both online and offline.
We continued to work on a series of science-related live broadcasts, including highly regarded IP, which we believe reinforced our reputation and strengthened our differentiated competitive advantages.
The average amount spent per advertiser was approximately $61,000, $83,000 and $103,000, respectively, for 2024, 2023 and 2022. Other information Sales to our five largest advertising agencies and advertisers comprised approximately 24% of total brand advertising revenues for 2024, compared to 28% and 34%, respectively, for 2023 and 2022.
The number of advertisers was 69, 62 and 60, respectively, for 2025, 2024 and 2023. The average amount spent per advertiser was approximately $46,000, $61,000 and $83,000, respectively, for 2025, 2024 and 2023.
We do not expect to adopt ASU No. 2023-09 early and we are currently evaluating the impact of adopting this standard on our consolidated financial statements. Income Statement (Topic 220) . In November 2024, the FASB issued ASU No. 2024-03, Income Statement (Topic 220)-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40).
The guidance is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods. Early adoption is permitted. We do not expect to adopt ASU No. 2025-06 early and we are currently evaluating the impact of adopting this standard on our consolidated financial statements. Government Grants (Topic 832).
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The worldwide COVID-19 pandemic had a negative impact on the Chinese economy in 2021 and 2022 and, in particular, on advertiser spending, which in turn had an adverse impact on our business and results of operations for those years.

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Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Committees of the Board of Directors Audit Committee The members of our Audit Committee currently are Dr. Dave Qi, Dr. Zhonghan Deng and Mr. Dave De Yang, who are each independent as that term is defined in Rule 10A-3 under the Exchange Act and Rule 5605(a)(2) of the Nasdaq Listing Rules. Our Board has determined that Dr.
Committees of the Board of Directors Audit Committee The members of our Audit Committee currently are Dr. Dave Qi, Dr. Zhonghan Deng and Mr. Dave De Yang, who are each independent as that term is defined in Rule 10A-3 under the Exchange Act and Rule 5605(a)(2) of the Nasdaq Listing Rules. Our Board of Directors has determined that Dr.
In compiling a list of possible candidates and considering their qualifications, our Nominating Committee makes its own inquiries, solicits input from other directors on our Board and may consult or engage other sources, such as a professional search firm, if it deems appropriate.
In compiling a list of possible candidates and considering their qualifications, our Nominating Committee makes its own inquiries, solicits input from other directors on our Board of Directors and may consult or engage other sources, such as a professional search firm, if it deems appropriate.
Dave Qi is an audit committee financial expert as set forth under the applicable SEC rules and Rule 5605(c)(2) of the Nasdaq Listing Rules. The full responsibilities of our Audit Committee are set forth in its charter, which will be reviewed and updated annually and approved by our board, and will be posted on our website at http://investors.sohu.com/committee-details/audit-committee.
Dave Qi is an audit committee financial expert as set forth under the applicable SEC rules and Rule 5605(c)(2) of the Nasdaq Listing Rules. The full responsibilities of our Audit Committee are set forth in its charter, which will be reviewed and updated annually and approved by our Board of Directors, and will be posted on our website at http://investors.sohu.com/committee-details/audit-committee.
(New York Stock Exchange). Mr. Huang holds a Master of Science degree in Computer Science from MIT. Dr. Zhonghan Deng is the Chief Scientist of Vimicro International Corporation (“Vimicro”), which he co-founded in 1999. Dr. Zhonghan Deng also worked as a research scientist for International Business Machines Corporation at the T.J. Watson Research Center in Yorktown Heights, New York. Dr.
(New York Stock Exchange). Mr. Huang holds a Master of Science degree in computer science from MIT. Dr. Zhonghan Deng is the Chief Scientist of Vimicro International Corporation, which he co-founded in 1999. Dr. Zhonghan Deng also worked as a research scientist for International Business Machines Corporation at the T.J. Watson Research Center in Yorktown Heights, New York. Dr.
Dave Qi has published many articles and research essays on accounting, financial reporting, capital market and other related topics. Dr. Dave Qi also serves as director of the following public companies: Bison Finance Group Limited (HK Stock Exchange), CTV Golden Bridge International Media Co., LTD. (Hong Kong Stock Exchange), Momo Inc.
Dave Qi has published many articles and research essays on accounting, financial reporting, capital market and other related topics. Dr. Dave Qi also serves as director of the following public companies: Bison Finance Group Limited (Hong Kong Stock Exchange), CTV Golden Bridge International Media Co., LTD. (Hong Kong Stock Exchange), Momo Inc.
Yang served as Chief Financial Officer for the North Asia region, including the Chinese mainland, Hong Kong, Taiwan, Japan, and Korea, of Reckitt Benckiser, a London-based company that is listed on the London Stock Exchange and is included in the FTSE 100 Index. Prior to joining Reckitt Benckiser, Mr.
Yang served as Chief Financial Officer for the North Asia region, including the Chinese mainland, Hong Kong, Taiwan, Japan, and South Korea, of Reckitt Benckiser, a London-based company that is listed on the London Stock Exchange and is included in the FTSE 100 Index. Prior to joining Reckitt Benckiser, Mr.
Yang worked for McDonald’s Corporation as a senior financial director, including an international assignment as the Corporate Controller of McDonald’s China for three and half years.
Yang worked for McDonald’s Corporation as a senior financial director, including an international assignment as the Corporate Controller of McDonald’s China division for three and half years.
(Nasdaq), Yunfeng Financial Group Limited (formerly Reorient Group Limited) (Hong Kong Stock Exchange) and Haidilao International Holding Ltd. (HK Stock Exchange). In addition, Dr.
(Nasdaq), Yunfeng Financial Group Limited (formerly Reorient Group Limited) (Hong Kong Stock Exchange) and Haidilao International Holding Ltd. (Hong Kong Stock Exchange). In addition, Dr.
Chen worked with Fujian Shi Da Computer Group as a software engineer and project manager, and later as the Director of the Technology Department of the Shanghai branch office. Mr. Dewen Chen received a bachelor’s degree in Computer Engineering from Xi’an Jiaotong University. 125 Table of Contents Joanna Lv has been our Chief Financial Officer since January 27, 2018. Ms.
Chen worked with Fujian Shi Da Computer Group as a software engineer and project manager, and later as the Director of the Technology Department of the Shanghai branch office. Mr. Dewen Chen received a bachelor’s degree in computer engineering from Xi’an Jiaotong University. Joanna Lv has been our Chief Financial Officer since January 27, 2018. Ms.
Our directors currently consist of Dr. Charles Zhang, Zhonghan Deng, and Dave De Yang, whose terms will expire at our 2026 annual general meeting of shareholders, and Charles Huang, Dave Qi, and Shi Wang, whose terms will expire at our 2025 annual meeting of shareholders.
Our directors currently consist of Dr. Charles Zhang, Zhonghan Deng, and Dave De Yang, whose terms will expire at our 2026 annual general meeting of shareholders, and Charles Huang, Dave Qi, and Shi Wang, whose terms will expire at our 2027 annual meeting of shareholders.
Chen was the Director of Marketing & Operations of our online game business. From April 2000 until he joined us in 2005, Mr. Chen worked at Shanghai Hua Teng Software System Co. Ltd. as a pre-sale technology consultant and sales manager. Prior to that, Mr.
Prior to Changyou’s carve-out from us in 2007, Mr. Chen was the Director of Marketing & Operations of our online game business. From April 2000 until he joined us in 2005, Mr. Chen worked at Shanghai Hua Teng Software System Co. Ltd. as a pre-sale technology consultant and sales manager. Prior to that, Mr.
The Audit Committee is responsible for, among other things: • selecting the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; • overseeing our accounting and financial reporting processes and audits of the financial statements of our company; • reviewing with the independent auditors any audit problems or difficulties and management’s response; • reviewing and approving all proposed related party transactions, as defined in the Nasdaq Listing Rules; • discussing the annual audited financial statements with management and the independent auditors; • reviewing major issues as to the adequacy of our internal controls over financial reporting and any special audit steps adopted in the light of any significant deficiency or material weakness in those internal controls; and • meeting separately and periodically with management and the independent auditors.
The Audit Committee is responsible for, among other things: • selecting the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; • overseeing our accounting and financial reporting processes and audits of the financial statements of our company; • reviewing with the independent auditors any audit problems or difficulties and management’s response; • reviewing and approving all proposed related party transactions, as defined in the Nasdaq Listing Rules; • discussing the annual audited financial statements with management and the independent auditors; • reviewing major issues as to the adequacy of our internal controls over financial reporting and any special audit steps adopted in the light of any significant deficiency or material weakness in those internal controls; and • meeting separately and periodically with management and the independent auditors. 129 Table of Contents Compensation Committee The members of our Compensation Committee currently are Dr.
Institute of Certified Internal Auditors, the Institute of Certified Public Accountants and the Institute of Certified Management Accountants. Dr. Dave Qi is a Professor of Accounting and the former Associate Dean of the Cheung Kong Graduate School of Business.
Institute of Certified Internal Auditors, the Institute of Certified Public Accountants and the Institute of Certified Management Accountants. 128 Table of Contents Dr. Dave Qi is a Professor of Accounting and the former Associate Dean of the Cheung Kong Graduate School of Business.
Grants of Shares and Options to Directors and Executive Officers The following tables set forth summaries of all outstanding equity awards granted by us to, and held by each of our directors and executive officers as of February 21, 2025.
Grants of Shares and Options to Directors and Executive Officers The following tables set forth summaries of all outstanding equity awards granted by us to, and held by each of our directors and executive officers as of February 20, 2026.
Changyou’s employees have entered into confidentiality agreements with Changyou. A number of our employees hold share-based awards granted by Sohu and Changyou, which provide additional financial incentives to them. Most of these awards vest over a period of four years. 130 Table of Contents Share Ownership Refer to “ Item 7.
Changyou’s employees have entered into confidentiality agreements with Changyou. A number of our employees hold share-based awards granted by Sohu and Changyou, which provide additional financial incentives to them. Most of these awards vest over a period of four years. Share Ownership Refer to “Item 7.
Compensation Committee The members of our Compensation Committee currently are Dr. Dave Qi and Dr. Zhonghan Deng, who are each independent as that term is defined in Rule 5605(a)(2) of the Nasdaq Listing Rules.
Dave Qi and Dr. Zhonghan Deng, who are each independent as that term is defined in Rule 5605(a)(2) of the Nasdaq Listing Rules.
Employees As of December 31, 2024, we had approximately 4,300 employees, including 2,500 employees for Sohu and 1,800 employees for Changyou. None of our personnel are represented under collective bargaining agreements. We have entered into standard employment agreements with our employees through our subsidiaries and the VIEs. Sohu’s employees have entered into confidentiality, non-competition and non-solicitation agreements with Sohu.
Employees As of December 31, 2025, we had approximately 4,000 employees, including 2,400 employees for Sohu and 1,600 employees for Changyou. None of our personnel are represented under collective bargaining agreements. We have entered into standard employment agreements with our employees through our subsidiaries and the VIEs. Sohu’s employees have entered into confidentiality, non-competition and non-solicitation agreements with Sohu.
The full responsibilities of our Nominating Committee are set forth in its charter, which is posted on our Web site at http://investors.sohu.com/committee-details/nominating-committee 127 Table of Contents It is a policy of our Nominating Committee that candidates for director (i) be determined to have unquestionable integrity and honesty, (ii) have the ability to exercise sound, mature and independent business judgment which is in the best interests of the shareholders as a whole, (iii) have a background and experience in fields which will complement the talents of the other Board members, (iv) have the willingness and capability to take the time to actively participate in Board and committee meetings and related activities, (v) have the ability to work professionally and effectively with other Board members and our management, (vi) have the ability to remain on our Board long enough to make a meaningful contribution and (vii) have no material relationships with competitors or other third parties that could create a reasonable likelihood of a conflict of interest or other legal issues.
It is a policy of our Nominating Committee that candidates for director (i) be determined to have unquestionable integrity and honesty, (ii) have the ability to exercise sound, mature and independent business judgment which is in the best interests of the shareholders as a whole, (iii) have a background and experience in fields which will complement the talents of the other Board members, (iv) have the willingness and capability to take the time to actively participate in Board and committee meetings and related activities, (v) have the ability to work professionally and effectively with other Board members and our management, (vi) have the ability to remain on our Board of Directors long enough to make a meaningful contribution and (vii) have no material relationships with competitors or other third parties that could create a reasonable likelihood of a conflict of interest or other legal issues.
We paid an aggregate of approximately $0.58 million in cash compensation to our directors other than Dr. Charles Zhang. In 2024, the total compensation expense for our non-executive directors and executive officers recorded in our consolidated statements of comprehensive income was $6.7 million. None of our directors, other than Dr.
We paid an aggregate of approximately $0.61 million in cash compensation to our directors other than Dr. Charles Zhang. In 2025, the total compensation expense for our non-executive directors and executive officers recorded in our consolidated statements of comprehensive income was $9.5 million. None of our directors, other than Dr.
Major Shareholders and Related Party Transactions ” below for a description of the share ownership of our directors and senior executive officers.
Major Shareholders and Related Party Transactions” below for a description of the share ownership of our directors and executive officers.
Directors and Executive Officers Age Position Charles Zhang 60 Chairman of the Board and Chief Executive Officer Dewen Chen 49 Chief Executive Officer of Changyou Joanna Lv 54 Chief Financial Officer Charles Huang 55 Director Zhonghan Deng (1) (2) (3) 57 Independent Director Dave De Yang (1) 59 Independent Director Dave Qi (1) (2) (3) 61 Independent Director Shi Wang (3) 74 Independent Director (1) Member of the Audit Committee of our Board of Directors.
Directors and Executive Officers Age Position Charles Zhang 61 Chairman of the Board and Chief Executive Officer Dewen Chen 50 Chief Executive Officer of Changyou Joanna Lv 55 Chief Financial Officer Charles Huang 56 Director Zhonghan Deng (1) (2) (3) 58 Independent Director Dave De Yang (1) 60 Independent Director Dave Qi (1) (2) (3) 62 Independent Director Shi Wang (3) 75 Independent Director (1) Member of the Audit Committee of our Board of Directors.
For more information about the classification of our Board of Directors, see “- Board of Directors.” Officers are elected by and serve at the discretion of the Board of Directors. Compensation of Executive Officers and Directors During the year ended December 31, 2024, we paid an aggregate of approximately $5.2 million in cash compensation to our executive officers.
For more information about the classification of our Board of Directors, see “- Board of Directors.” Officers are elected by and serve at the discretion of our Board of Directors. 130 Table of Contents Compensation of Executive Officers and Directors During the year ended December 31, 2025, we paid an aggregate of approximately $6.3 million in cash compensation to our executive officers.
Shi Wang also serves as the Chairman of the Board of Directors of Destone Acquisition Corp. 126 Table of Contents Board of Directors Our Board of Directors currently consists of six directors and is divided into two classes consisting of three directors each, with one class of directors being elected by the holders of our ordinary shares at each annual general meeting of shareholders and holding office for staggered two-year terms, with the term of one of the classes expiring at each annual general meeting.
Board of Directors Our Board of Directors currently consists of six directors and is divided into two classes consisting of three directors each, with one class of directors being elected by the holders of our ordinary shares at each annual general meeting of shareholders and holding office for staggered two-year terms, with the term of one of the classes expiring at each annual general meeting.
Zhang, Ms. Lv or Mr. Chen without cause upon thirty days’ advance written notice. In such case of termination by us and also in a case where Dr. Zhang, Ms. Lv or Mr.
We or Changyou may also terminate our employment agreements with Dr. Zhang, Ms. Lv or Mr. Chen without cause upon thirty days’ advance written notice. In such case of termination by us and also in a case where Dr. Zhang, Ms. Lv or Mr.
Awards Granted under Sohu 2018 Share Incentive Plan Directors and Executive Officers Ordinary Shares underlying outstanding options Exercise price Date of grant Expiration date Charles Zhang 70,000 (1) $ 0.001 7/1/2019 6/30/2029 Joanna Lv 40,000 (1) $ 0.001 7/1/2019 6/30/2029 Joanna Lv 10,000 (1) $ 0.001 9/1/2020 8/31/2030 (1) Consists of options to purchase our ordinary shares at a nominal exercise price, all of which options were vested and exercisable as of February 21, 2025.
Awards Granted under Sohu 2018 Share Incentive Plan Directors and Executive Officers Ordinary Shares underlying outstanding options Exercise price Date of grant Expiration date Charles Zhang 70,000 (1) $ 0.001 7/1/2019 6/30/2029 Joanna Lv 40,000 (1) $ 0.001 7/1/2019 6/30/2029 Joanna Lv 10,000 (1) $ 0.001 9/1/2020 8/31/2030 (1) Consists of options to purchase our ordinary shares at a nominal exercise price, all of which options were vested and exercisable as of February 20, 2026. 132 Table of Contents Awards Granted under Changyou 2019 Share Incentive Plan Directors and Executive Officers Ordinary Shares underlying outstanding options Exercise price Date of grant Expiration date Dewen Chen 1,238,774 (1) $ 0.01 8/26/2019 9/30/2029 (1) Consists of options, granted on August 26, 2019 and effective as of October 1, 2019, all of which options were vested as of February 20, 2026.
In any such case, such officer will not be entitled to receive payment of any severance benefits or other amounts by reason of termination other than accrued salary and vacation through the date of termination and such officer’s right to all other benefits will terminate, except as required by applicable law. 128 Table of Contents We or Changyou may also terminate our employment agreements with Dr.
In any such case, such officer will not be entitled to receive payment of any severance benefits or other amounts by reason of termination other than accrued salary and vacation through the date of termination and such officer’s right to all other benefits will terminate, except as required by applicable law.
Upon the dissolution of Sohu.com Inc. on May 31, 2018, we assumed all then existing obligations of Sohu.com Inc. with respect to equity incentive awards that had been granted under Sohu 2010 Stock Incentive Plan and then remained outstanding, and such awards were converted into the right to receive upon exercise or settlement our ordinary shares under the Sohu 2018 Share Incentive Plan rather than shares of the common stock of Sohu.com Inc., subject to the other terms of such outstanding awards. 129 Table of Contents Changyou Share Incentive Plan Changyou adopted a share incentive plan in June 2014 (the “Changyou 2014 Share Incentive Plan”), which expired in June 2024 and is no longer available for granting new share-based awards.
Upon the dissolution of Sohu.com Inc. on May 31, 2018, we assumed all then existing obligations of Sohu.com Inc. with respect to equity incentive awards that had been granted under Sohu 2010 Stock Incentive Plan and then remained outstanding, and such awards were converted into the right to receive upon exercise or settlement our ordinary shares under the Sohu 2018 Share Incentive Plan rather than shares of the common stock of Sohu.com Inc., subject to the other terms of such outstanding awards.
(2) Member of the Compensation Committee of our Board of Directors. (3) Member of the Nominating Committee of our Board of Directors. Dr. Charles Zhang is our founder and has been Chairman of our Board and Chief Executive Officer since August 1996. Dr. Charles Zhang also served as our President from August 1996 to July 2004.
(2) Member of the Compensation Committee of our Board of Directors. (3) Member of the Nominating Committee of our Board of Directors. 127 Table of Contents Dr. Charles Zhang is our founder and has been Chairman of our Board of Directors and Chief Executive Officer since August 1996. Dr.
Charles Zhang has a Ph.D. in experimental physics from MIT and a Bachelor of Science degree from Tsinghua University. Dewen Chen is the Chief Executive Officer of Changyou and was one of the principal founders of Changyou’s online game business. Mr. Chen was named as one of our executive officers effective November 1, 2016. Mr.
Charles Zhang was the Chairman of the Board of Changyou prior to the completion of the Changyou Merger. Dr. Charles Zhang has a Ph.D. in experimental physics from MIT and a Bachelor of Science degree from Tsinghua University. Dewen Chen is the Chief Executive Officer of Changyou and was one of the principal founders of Changyou’s online game business. Mr.
Shi Wang is the Executive Manager of the China Real Estate Association and is Deputy Director of the City Housing Development Council of the China Real Estate Association. Mr.
Shi Wang is the Executive Manager of the China Real Estate Association and is Deputy Director of the City Housing Development Council of the China Real Estate Association. Mr. Shi Wang also serves as the Chairman of the Board of Directors of Destone Acquisition Corp.
Chen joined us in 2005 as a business manager, responsible for building a sales team for game products. Beginning in May 2006, Mr. Chen was in charge of the overall marketing, promotion, sales and channel distribution of our game products. Prior to Changyou’s carve-out from us in 2007, Mr.
Chen was named as one of our executive officers effective November 1, 2016. Mr. Chen joined us in 2005 as a business manager, responsible for building a sales team for game products. Beginning in May 2006, Mr. Chen was in charge of the overall marketing, promotion, sales and channel distribution of our game products.
Prior to founding Sohu, Dr. Charles Zhang worked for Internet Securities Inc. and helped to establish its China operations. Prior to that, Dr. Charles Zhang worked as the liaison officer with China for the Massachusetts Institute of Technology (“MIT”). Dr. Charles Zhang was the Chairman of the Board of Changyou prior to the completion of the Changyou Merger. Dr.
Charles Zhang also served as our President from August 1996 to July 2004. Prior to founding Sohu, Dr. Charles Zhang worked for Internet Securities Inc. and helped to establish its China operations. Prior to that, Dr. Charles Zhang worked as the liaison officer with China for the Massachusetts Institute of Technology (“MIT”). Dr.
Each of Dr. Zhang, Ms. Lv and Mr. Chen has also agreed to disclose to us or Changyou all inventions which he or she conceives and develops during the employment and to assign all right, title and interest in them to us or Changyou and has agreed not to assert any such rights against us or Changyou.
Chen has also agreed to disclose to us or Changyou all inventions which he or she conceives and develops during the employment and to assign all right, title and interest in them to us or Changyou and has agreed not to assert any such rights against us or Changyou. 131 Table of Contents Share Incentive Plans Sohu Share Incentive Plans We adopted a share incentive plan in April 2018 (the “Sohu 2018 Share Incentive Plan”), which will expire in April 2028.
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Share Incentive Plans Sohu Share Incentive Plans We adopted a share incentive plan in April 2018 (the “Sohu 2018 Share Incentive Plan”), which will expire in April 2028.
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The full responsibilities of our Nominating Committee are set forth in its charter, which is posted on our Web site at http://investors.sohu.com/committee-details/nominating-committee.
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Awards Granted under Changyou 2019 Share Incentive Plan Directors and Executive Officers Ordinary Shares underlying outstanding options Exercise price Date of grant Expiration date Dewen Chen 1,238,774 (1) $ 0.01 8/26/2019 9/30/2029 (1) Consists of options, granted on August 26, 2019 and effective as of October 1, 2019, all of which options were vested as of February 21, 2025.
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Each of Dr. Zhang, Ms. Lv and Mr.
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Changyou Share Incentive Plan Changyou adopted a share incentive plan in June 2014 (the “Changyou 2014 Share Incentive Plan”), which expired in June 2024 and is no longer available for granting new share-based awards.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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GAAP (ASC 810)) as would ownership of these businesses; and the contracts may be difficult to enforce” and “- A failure by the VIEs or their shareholders to perform their obligations under our contractual arrangements with them could have an adverse effect on our business and financial condition.” The following is a summary of the agreements currently in effect between these principal Chinese mainland subsidiaries and principal VIEs: Agreements between Subsidiaries, Consolidated VIEs and Nominee Shareholders Loan and share pledge agreement between Sohu Media and the shareholders of High Century.
GAAP (ASC 810)) as would ownership of these businesses; and the contracts may be difficult to enforce” and “- A failure by the VIEs or their shareholders to perform their obligations under our contractual arrangements with them could have an adverse effect on our business and financial condition.” The following is a summary of the agreements currently in effect between these principal Chinese mainland subsidiaries and principal VIEs: 135 Table of Contents Agreements between Subsidiaries, Consolidated VIEs and Nominee Shareholders Loan and share pledge agreement between Sohu Media and the shareholders of High Century.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS Major Shareholders The following table sets forth certain information regarding the beneficial ownership of our ordinary shares as of February 21, 2025 by (i) each person (including any “group” as that term is used in Section 13(d)(3) of the Exchange Act known by us to be the beneficial owner of more than 5% of our ordinary share (assuming conversion of all outstanding exercisable options and warrants held by that person), (ii) each current director, (iii) each named executive officer and (iv) all of our current directors and named executive officers as a group.
MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS Major Shareholders The following table sets forth certain information regarding the beneficial ownership of our ordinary shares as of February 20, 2026 by (i) each person (including any “group” as that term is used in Section 13(d)(3) of the Exchange Act known by us to be the beneficial owner of more than 5% of our ordinary share (assuming conversion of all outstanding exercisable options and warrants held by that person), (ii) each current director, (iii) each named executive officer and (iv) all of our current directors and named executive officers as a group.
In 2023 and 2024, we paid $218,256 and $14,088, respectively, to Deeprock Management Consultancy (Shenzhen) Co., Ltd. for services it provided to us. Mr. Shi Wang, one of our directors, holds 99% of the outstanding shares of Deeprock Management Consultancy (Shenzhen) Co., Ltd.
In 2023, 2024 and 2025, we paid $218,256, $14,088 and $26,294, respectively, to Deeprock Management Consultancy (Shenzhen) Co., Ltd. for services it provided to us. Mr. Shi Wang, one of our directors, holds 99% of the outstanding shares of Deeprock Management Consultancy (Shenzhen) Co., Ltd.
(2) Includes (i) 70,000 ordinary shares subject to options exercisable within 60 days of February 21, 2025 and (ii) 11,048,400 ordinary shares beneficially owned by Photon Group Limited. Dr. Charles Zhang is a Director of Photon Group Limited, and may be deemed to be a beneficial owner of shares owned by it. Dr.
(2) Includes (i) 70,000 ordinary shares subject to options exercisable within 60 days of February 20, 2026 and (ii) 11,048,400 ordinary shares beneficially owned by Photon Group Limited. Dr. Charles Zhang is a Director of Photon Group Limited, and may be deemed to be a beneficial owner of shares owned by it. Dr.
The number of shares beneficially owned by a person includes the number of ordinary shares subject to options or restricted stock units held by that person that are currently exercisable or settleable or that are exercisable or settleable within 60 days of February 21, 2025.
The number of shares beneficially owned by a person includes the number of ordinary shares subject to options or restricted stock units held by that person that are currently exercisable or settleable or that are exercisable or settleable within 60 days of February 20, 2026.
In connection with such loan arrangements, we recorded in our audited consolidated balance sheets as of December 31, 2024 loans receivable from Fox Financial in a total amount of $33.2 million as prepaid and other current assets, and loans payable to Fox Financial in a total amount of $34.1 million as other short-term liabilities. 132 Table of Contents Transactions with Vanke Co., Ltd.
In connection with such loan arrangements, we recorded in our audited consolidated balance sheets as of December 31, 2025 loans receivable from Fox Financial in a total amount of $33.9 million as prepaid and other current assets, and loans payable to Fox Financial in a total amount of $34.1 million as other short-term liabilities. Transactions with Vanke Co., Ltd.
If the shareholders breach their obligations under any VIE-related agreements (Gamease’s or Guanyou Gamespace’s breach of any of its obligations under the various applicable VIE-related agreements will be treated as its shareholder’s breach of its obligations), including the equity pledge agreements, AmazGame and Gamespace are entitled to exercise their rights as the beneficiaries under the applicable equity pledge agreements, including all rights the respective shareholders have as shareholders of Gamease or Guanyou Gamespace. 133 Table of Contents Equity interest purchase right agreements among AmazGame, Gamease and the sole shareholder of Gamease and among Gamespace, Guanyou Gamespace and the sole shareholder of Guanyou Gamespace.
If the shareholders breach their obligations under any VIE-related agreements (Gamease’s or Guanyou Gamespace’s breach of any of its obligations under the various applicable VIE-related agreements will be treated as its shareholder’s breach of its obligations), including the equity pledge agreements, AmazGame and Gamespace are entitled to exercise their rights as the beneficiaries under the applicable equity pledge agreements, including all rights the respective shareholders have as shareholders of Gamease or Guanyou Gamespace.
In 2022, 2023 and 2024, Vanke Co., Ltd. purchased $139,428, $208,092 and $75,982, respectively, in advertising services from us. Mr. Shi Wang, one of our directors, is the Honorary Chairman of the Board of Vanke Co., Ltd. Transactions with Deeprock Management Consultancy (Shenzhen) Co., Ltd.
In 2023, 2024 and 2025, Vanke Co., Ltd. purchased $208,092, $75,982 and $58,734, respectively, in marketing services from us. Mr. Shi Wang, one of our directors, is the Honorary Chairman of the Board of Vanke Co., Ltd. Transactions with Deeprock Management Consultancy (Shenzhen) Co., Ltd.
In December 2018 and 2019, Changyou entered into several supplemental agreements with Fox Financial, pursuant to which (i) all accrued and unpaid interest on the loans was added to the principal of the corresponding loans; (ii) Fox Financial provided security for its repayment obligations to Changyou; and (iii) Changyou similarly provided security for its repayment obligations to Fox Financial.
All of the loans carry a fixed rate of interest which approximated the market interest rate at the inception of the loans. 134 Table of Contents In December 2018 and 2019, Changyou entered into several supplemental agreements with Fox Financial, pursuant to which (i) all accrued and unpaid interest on the loans was added to the principal of the corresponding loans; (ii) Fox Financial provided security for its repayment obligations to Changyou; and (iii) Changyou similarly provided security for its repayment obligations to Fox Financial.
Pursuant to these agreements, AmazGame, Gamespace and Changyou Chuangxiang, respectively, provide marketing, staffing, business operation and maintenance services to Gamease and Guanyou Gamespace, respectively, in exchange for a fee equal to the cost of providing such services plus a predetermined margin.
Pursuant to these agreements, AmazGame, Gamespace and Changyou Chuangxiang, respectively, provide marketing, staffing, business operation and maintenance services to Gamease and Guanyou Gamespace, respectively, in exchange for a fee equal to the cost of providing such services plus a predetermined margin. Each agreement terminates only when AmazGame, Gamespace or Changyou Chuangxiang, as the case may be, is dissolved.
Charles Huang’s address is Suit 611, Chinachem Tower, 34-37 Connaught Road Central, Hong Kong. (4) Mr. Shi Wang’s address is Vanke Architecture Research Center, No. 68 Meilin Road, Futian District, Shenzhen 518049, People’s Republic of China. 131 Table of Contents (5) Dr.
Charles Huang’s address is Suit 611, Chinachem Tower, 34-37 Connaught Road Central, Hong Kong. (4) Mr. Shi Wang’s address is Vanke Architecture Research Center, No. 68 Meilin Road, Futian District, Shenzhen 518049, People’s Republic of China. (5) Dr. Zhonghan Deng’s address is 16/F, Shining Tower, No. 35, Xueyuan Road, Haidian District, Beijing 100191, People’s Republic of China. (6) Dr.
Pursuant to the agreement, the shareholders executed in blank transfers of their equity interests in High Century, which are held by the Sohu Group’s legal department and may be completed and effected at Sohu Media’s election. Loan and share pledge agreement between Sohu Focus (HK) Limited (“Focus HK”) and the shareholders of Heng Da Yi Tong.
Pursuant to the agreement, the shareholders executed in blank transfers of their equity interests in High Century, which are held by the Sohu Group’s legal department and may be completed and effected at Sohu Media’s election.
Name and Address of Beneficial Owner Amount and Nature of Beneficial Ownership (1) Percent of Class (1) Charles Zhang 11,462,100 (2) 38.59 % Charles Huang (3) 76,265 * Shi Wang (4) 34,132 * Dave Qi (5) 28,940 * Zhonghan Deng (6) 5,878 * Dave De Yang (7) — — Joanna Lv 58,637 (8) * Dewen Chen (9) — — All directors, nominees and executive officers as a group (8 persons) 11,665,952 (10) 39.21 % Photon Group Limited (11) 11,048,400 37.28 % Macquarie Investment Management Business Trust (12) 3,429,040 10.16 % * Less than 1%.
Name and Address of Beneficial Owner Amount and Nature of Beneficial Ownership (1) Percent of Class (1) Charles Zhang 11,462,100 (2) 44.45 % Charles Huang (3) 76,265 * Shi Wang (4) 34,132 * Zhonghan Deng (5) 5,878 * Dave Qi (6) — — Dave De Yang (7) — — Joanna Lv 58,637 (8) * Dewen Chen (9) — — All directors, nominees and executive officers as a group (8 persons) 11,637,012 (10) 45.05 % Photon Group Limited (11) 11,048,400 42.97 % Nomura Asset Management International Inc. and Nomura Investment Management Business Trust, as joint filers (12) 2,831,951 9.4 % 133 Table of Contents * Less than 1%.
Each agreement terminates only when AmazGame, Gamespace or Changyou Chuangxiang, as the case may be, is dissolved. 134 Table of Contents Certain of the contractual arrangements described above between the VIEs and the related wholly-owned subsidiaries of the Sohu Group are silent regarding renewals. However, because the Sohu Group has a controlling financial interest under U.S.
Certain of the contractual arrangements described above between the VIEs and the related wholly-owned subsidiaries of the Sohu Group are silent regarding renewals. However, because the Sohu Group has a controlling financial interest under U.S.
Dewen Chen’s address is c/o Changyou.com Limited, Changyou Creative Industrial Park, No. 65 East Bajiao Road, Shijingshan District, Beijing 100043, People’s Republic of China. (10) Includes 120,000 ordinary shares that such persons have the right to acquire pursuant to currently exercisable options or options that may be exercised within 60 days of February 21, 2025.
(10) Includes 120,000 ordinary shares that such persons have the right to acquire pursuant to currently exercisable options or options that may be exercised within 60 days of February 20, 2026. (11) Photon Group Limited’s address is c/o Sohu.com Limited, Sohu.com Media Plaza, Block 3, No. 2 Kexueyuan South Road, Haidian District, Beijing 100190, People’s Republic of China.
Powers of attorney executed by the sole shareholder of Gamease in favor of AmazGame and by the sole shareholder of Guanyou Gamespace in favor of Gamespace, with a term of ten years.
Powers of attorney executed by the sole shareholder of Gamease in favor of AmazGame and by the sole shareholder of Guanyou Gamespace in favor of Gamespace, with the same term as that of the corresponding business operation agreements among AmazGame, Gamease and the sole shareholder of Gamease and among Gamespace, Guanyou Gamespace and the sole shareholder of Guanyou Gamespace (as discussed below).
Dave Qi’s address is 3/F, Tower E3, Oriental Plaza, 1 East Chang An Avenue, Beijing 100005, People’s Republic of China. (6) Dr. Zhonghan Deng’s address is 16/F, Shining Tower, No. 35, Xueyuan Road, Haidian District, Beijing 100191, People’s Republic of China. (7) Mr. Dave De Yang’s address is 11132 Egeria Drive, Odessa, FL 33556, United States.
Dave Qi’s address is 3/F, Tower E3, Oriental Plaza, 1 East Chang An Avenue, Beijing 100005, People’s Republic of China. (7) Mr. Dave De Yang’s address is 11132 Egeria Drive, Odessa, FL 33556, United States. (8) Includes 50,000 ordinary shares subject to options exercisable within 60 days of February 20, 2026. Ms.
Each agreement has a term of 10 years. Business Arrangements between Subsidiaries and Consolidated VIEs A significant portion of our operations are conducted through the VIEs that we consolidate under U.S. GAAP (ASC 810), which generate a significant amount of our revenues.
Each agreement has an initial term of 10 years, extendable for additional 10-year terms at the sole discretion of AmazGame or Gamespace, as the case may be. 136 Table of Contents Business Arrangements between Subsidiaries and Consolidated VIEs A significant portion of our operations are conducted through the VIEs that we consolidate under U.S.
(8) Includes 50,000 ordinary shares subject to options exercisable within 60 days of February 21, 2025. Ms. Joanna Lv’s address is c/o Sohu.com Limited, Level 18, Sohu.com Media Plaza, Block 3, No. 2 Kexueyuan South Road, Haidian District, Beijing 100190, People’s Republic of China. (9) Mr.
Joanna Lv’s address is c/o Sohu.com Limited, Level 18, Sohu.com Media Plaza, Block 3, No. 2 Kexueyuan South Road, Haidian District, Beijing 100190, People’s Republic of China. (9) Mr. Dewen Chen’s address is c/o Changyou.com Limited, Changyou Creative Industrial Park, No. 65 East Bajiao Road, Shijingshan District, Beijing 100043, People’s Republic of China.
The principal business address of Macquarie Management Holdings Inc. and Macquarie Investment Management Business Trust is 610 Market Street, Philadelphia, PA 19106, United States.
Each of Nomura Asset Management International Inc. and Nomura Investment Management Business Trust reported that it beneficially owned 2,831,951 ordinary shares and that its principal business address is 100 Independence, 610 Market Street, Philadelphia, PA 19106, United States.
(11) Photon Group Limited’s address is c/o Sohu.com Limited, Sohu.com Media Plaza, Block 3, No. 2 Kexueyuan South Road, Haidian District, Beijing 100190, People’s Republic of China. (12) Data based on a Schedule 13G/A filed jointly by Macquarie Group Limited, Macquarie Management Holdings Inc. and Macquarie Investment Management Business Trust with the SEC on February 14, 2024.
(12) Data based on a Schedule 13G filed jointly by Nomura Asset Management International Inc. and Nomura Investment Management Business Trust with the SEC on February 17, 2026.
Removed
Each of Macquarie Group Limited and Macquarie Management Holdings Inc. reported that it was deemed to beneficially own 3,429,040 ordinary shares beneficially owned by Macquarie Investment Management Business Trust. The principal business address of Macquarie Group Limited is 50 Martin Place Sydney, New South Wales, Australia.
Added
Loan and share pledge agreement between Sohu Focus (HK) Limited (“Focus HK”) and the shareholders of Beijing Heng Da Yi Tong Information Technology Co., Ltd. (“Heng Da Yi Tong”), a VIE that we consolidate. Dr. Charles Zhang, our Chairman of the Board and Chief Executive Officer, and one of our employees hold 80% and 20% interests, respectively, in this entity.
Removed
All of the loans carry a fixed rate of interest which approximated the market interest rate at the inception of the loans.
Added
Equity interest purchase right agreements among AmazGame, Gamease and the sole shareholder of Gamease and among Gamespace, Guanyou Gamespace and the sole shareholder of Guanyou Gamespace.
Added
GAAP (ASC 810), which generate a significant amount of our revenues.

Other SOHU 10-K year-over-year comparisons