On August 5th, Beijing time, Sohu Corporation released its financial report for the second quarter of 2024. According to the financial report, Sohu's revenue in the second quarter was $172 million, a year-on-year increase of 13%. The non GAAP net loss attributable to Sohu Corporation was $34 million, an increase of 88.9% year-on-year.
In the second quarter of 2024, our brand advertising revenue reached the previously expected high line, our online gaming revenue exceeded expectations, and our net profit met previous expectations, "said Zhang Chaoyang, founder, chairman, and CEO of Sohu
As Zhang Chaoyang said, the company's two main businesses have grown rapidly, both achieving high month on month growth. The online gaming business, which has the highest revenue share, increased by 25% month on month to $147 million, accounting for over 85%. Brand advertising revenue was $20 million, a 24% increase compared to the same period last year, but a 17% decrease compared to the same period last year.
The high growth of gaming revenue cannot be separated from the contribution of mobile games. According to the financial report, the average monthly active users of Sohu's mobile gaming platform were 4.9 million, a year-on-year increase of 273%. The total number of active paying users for the quarter was 1.1 million, a year-on-year increase of 299%, achieving a more than two-fold increase. The main reason for Sohu's dual growth in monthly active and paid users is due to the large number of users attracted by the release of "Journey to the West: Pen Painting Journey to the West" this quarter.
However, the increase in revenue does not necessarily indicate an improvement in the company's profitability, as Sohu's gross profit margin is showing a significant year-on-year and month on month decline. According to both US Generally Accepted Accounting Principles and non US Generally Accepted Accounting Principles, the gross profit margin for this quarter is 67%, compared to 76% for the same period in 2023 and 77% for the previous quarter.
Among them, the gross profit margin of the gaming business decreased the most, from 88% in the previous quarter to 76%. The financial report stated that the decline was mainly due to an increase in the proportion of mobile game revenue with higher external revenue sharing. However, the increase in costs is also the main factor contributing to the decrease in gross profit margin. The game cost for this quarter was 35.588 million, which is more than double the previous quarter's 14.482 million.
In addition, the gross profit margin of the brand advertising business for this quarter was 20%, a year-on-year decrease of 10%. The gross profit margin of other businesses also decreased by 45% to 9% year-on-year, but the proportion was relatively small and did not have a significant impact
The decrease in gross profit margin of the above businesses has further expanded Sohu's losses. According to the financial report, Sohu's net loss for the quarter reached $34 million based on non US GAAP net. The net loss for the same period in 2023 was $18 million, compared to a net loss of $22 million in the previous quarter.
For the outlook for the third quarter, Sohu's performance is relatively pessimistic. Sohu expects brand advertising revenue to be between $17 million and $19 million in the third quarter, a decrease of 4% to 14% compared to the previous quarter. Online gaming revenue ranged from $104 million to $114 million, a decrease of 22% to 29% compared to the quarter.
Sohu previously announced a total repurchase plan of up to $150 million for its American depositary shares. As of August 1, 2024, Sohu has repurchased 2.347 million shares of Sohu's American depositary shares for a total amount of approximately $26 million.