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SOHU, Sohu.com Limited

IT Services & Consulting asset-light Revenue in runoff

Sohu's Business Marketing Services Business Sohu's main business is the marketing services business, which consists primarily of advertising and other marketing-related services.

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.

Through our social features, Sohu also enables users to generate and distribute content, as well as interact with each other on our platform.

Latest annual: FY2025 20-F · 1 ADS = 1 ordinary share

SOHU · Sohu.com Limited

The business

What it sells, where the money comes from, the kind of company it is.

Revenue · FY2025

$584M

−2.4% YoY · −5% 5-yr CAGR

Vital signs · TTM, with 5-yr average

Revenue $584M 5-yr avg $671M

Gross margin 77% 5-yr avg 75%

Operating margin −16.1% 5-yr avg −7.5%

ROIC −6% 5-yr avg 1%

Owner-earnings margin −1% 5-yr avg −4%

Free cash flow margin −1% 5-yr avg −4%

The business in brief

read the 10-K →

What this business is and what moves its needle, from its own SEC filings.

Situation: Revenue in runoff. Revenue has shrunk about 11% a year across the record while operations still generate cash.
What moves the needle: Operating margin has reached 12% at its best but run negative through the cycle (median −11%) on a 71% gross margin — so the question is which reading is truer: whether the median was pulled below zero by one-off charges, by the cycle, or by spending it is still growing into, and whether it settles back at a profit. The cash cycle has run negative through the cycle (a median of −74 days): the operation is paid before it pays, so working capital releases cash as the business grows rather than tying it up. Read this kind of business on retention and the cost of growth. On its own account, the filing leans hardest on customer concentration, set against the numbers in what the filing emphasizes, below.
Is it a good business?: Return on capital has rarely cleared the cost of capital (median −6%, above 15% in 1 of 6 years). The steadier read is owner earnings: roughly 5% of revenue reaches owners as cash, though it swings, and customers and suppliers fund the business through negative working capital. This is price-taker territory, where the balance sheet and the cycle matter more than any multiple; the rest is in the 10-K.

Every line is arithmetic on the company's filings, shown in full in the sections below.

The record

Ten years of arithmetic, read across the cycle.

The record, 2016–2025

realized figures from each filing · older years to the left

2016’16	2017’17	2018’18	2019’19	2020’20	2021’21	2022’22	2023’23	2024’24	2025’25	TTMTTMDec 2025
											Income statement
$1.7B	$1.8B	$690M	$674M	$750M	$836M	$734M	$601M	$598M	$584M	$584M	RevenueRevenue
48%	46%	58%	64%	71%	76%	74%	76%	72%	77%	77%	Gross marginGross mgn
($117M)	($189M)	($168M)	($71M)	$73M	$97M	($873K)	($87M)	($109M)	($94M)	($94M)	Operating incomeOp. inc.
−7.1%	−10.7%	−24.4%	−10.6%	9.8%	11.7%	−0.1%	−14.5%	−18.3%	−16.1%	−16.1%	Operating marginOp. mgn
($115M)	($470M)	($67M)	($43M)	($128M)	$934M	($17M)	($31M)	($100M)	$394M	$394M	Net incomeNet inc.
											Cash flow & returns
$240M	$188M	$84M	$211M	$95M	($62M)	$32M	($26M)	($48M)	($5M)	($5M)	Operating cash flowOp. cash
$73M	$83M	$32M	$28M	$25M	$23M	$20M	$17M	$13M	$13M	$13M	DepreciationDeprec.
$281M	$575M	$119M	$226M	$198M	($1.0B)	$30M	($12M)	$39M	($411M)	($411M)	Working capital & otherWC & other
$105M	$79M	$25M	$15M	$6M	$7M	$9M	$3M	$1M	$576K	$576K	CapexCapex
6.4%	4.4%	3.7%	2.2%	0.8%	0.8%	1.2%	0.5%	0.2%	0.1%	0.1%	Capex / revenueCapex/rev
$135M	$109M	$59M	$196M	$89M	($69M)	$24M	($29M)	($49M)	($5M)	($5M)	Owner earningsOwner earn.
8.2%	6.2%	8.5%	29.0%	11.9%	−8.3%	3.2%	−4.8%	−8.2%	−0.9%	−0.9%	Owner earnings marginOE mgn
$135M	$109M	$59M	$196M	$89M	($69M)	$24M	($29M)	($49M)	($5M)	($5M)	Free cash flowFCF
8.2%	6.2%	8.5%	29.0%	11.9%	−8.3%	3.2%	−4.8%	−8.2%	−0.9%	−0.9%	Free cash flow marginFCF mgn
—	—	—	$0	$0	$17M	$82M	$7M	$41M	$54M	—	BuybacksBuybacks
—	—	—	-21%	—	31%	-0%	-6%	-11%	-6%	-6%	ROICROIC
—	-63%	-11%	-10%	-37%	72%	-2%	-3%	-11%	31%	31%	Return on equityROE
—	−63%	−11%	−10%	−37%	72%	−2%	−3%	−11%	31%	31%	Retained to equityRetained/eq
											Balance sheet
—	$2.2B	$1.9B	$484M	$318M	$1.4B	$1.2B	$960M	$904M	$831M	$831M	Cash & investmentsCash+inv
—	$250M	$264M	$126M	$88M	$83M	$68M	$72M	$54M	$43M	$43M	ReceivablesReceiv.
—	$288M	$287M	$121M	$108M	$87M	$56M	$45M	$36M	$36M	$36M	Accounts payablePayables
—	($38M)	($22M)	$5M	($20M)	($5M)	$11M	$27M	$18M	$7M	$7M	Operating working capitalOper. WC
—	$2.6B	$2.4B	$2.0B	$2.3B	$1.6B	$1.3B	$1.1B	$1.0B	$968M	$968M	Current assetsCur. assets
—	$1.2B	$1.3B	$1.1B	$1.3B	$503M	$417M	$342M	$322M	$334M	$334M	Current liabilitiesCur. liab.
—	2.3×	1.9×	1.8×	1.8×	3.2×	3.2×	3.3×	3.2×	2.9×	2.9×	Current ratioCurr. ratio
$68M	$72M	$48M	$47M	$48M	$49M	$47M	$47M	$47M	$10M	$10M	GoodwillGoodwill
—	$3.4B	$3.4B	$2.7B	$2.8B	$2.2B	$2.0B	$1.9B	$1.7B	$1.6B	$1.6B	Total assetsAssets
—	($2.2B)	($1.9B)	($484M)	($318M)	($1.4B)	($1.2B)	($960M)	($904M)	($831M)	($831M)	Net debt / (cash)Net debt
—	—	-9.6×	-5.0×	11.8×	13.0×	—	—	—	—	—	Interest coverageInt. cov.
—	$751M	$589M	$428M	$347M	$1.3B	$1.1B	$1.1B	$922M	$1.3B	$1.3B	Shareholders’ equityEquity
											Per share
38.7M	38.9M	39.0M	39.2M	39.5M	39.5M	34.9M	34.1M	32.0M	28.2M	26.1M	Shares out (diluted)Shares
$42.64	$45.54	$17.72	$17.17	$19.01	$21.15	$21.00	$17.61	$18.69	$20.70	$22.41	Revenue / shareRev/sh
$-2.97	$-12.10	$-1.73	$-1.11	$-3.25	$23.65	$-0.50	$-0.90	$-3.13	$13.96	$15.12	EPS (diluted)EPS
$3.48	$2.80	$1.51	$4.98	$2.25	$-1.75	$0.68	$-0.84	$-1.54	$-0.19	$-0.20	Owner earnings / shareOE/sh
$3.48	$2.80	$1.51	$4.98	$2.25	$-1.75	$0.68	$-0.84	$-1.54	$-0.19	$-0.20	Free cash flow / shareFCF/sh
$2.71	$2.03	$0.65	$0.38	$0.16	$0.17	$0.24	$0.09	$0.04	$0.02	$0.02	Cap. spending / shareCapex/sh
—	$19.32	$15.11	$10.92	$8.80	$32.68	$31.75	$31.05	$28.81	$45.25	$49.01	Book value / shareBVPS

Per-share growththe realized rate an owner's share compounded

	9-yr	5-yr
Revenue / share	−7.7%/yr	+1.7%/yr
Capital spending / share	−41.9%/yr	−33.8%/yr
Book value / share	+11.2%/yr (8-yr)	+38.7%/yr

The record, charted

FY2016–2025

Each measure over its full record; the current point and the worst year marked.

Share count

28Mpeak FY2021

ROIC

−6%low FY2019

Gross margin

77%low FY2017

Owner earnings vs. net income

Owner earningsNet income

The accountant's number, and the cash an owner can take; the gap is the tell.

($5M)owner earningsvs.$394Mnet incomelow FY2021

Where the cash went

ReinvestBuybacksDividendsAcquisitionsRetained

Each year's operating cash, by what management did with it: the mix, and how it drifts.

FY2016FY2022

Owner-earnings bridge

FY2021–FY2025cash-flow statement, SEC EDGAR →

Net income is the accountant's number; owner earnings is the cash an owner could take out. The walk between them, off the cash-flow statement, and whether the gap is widening or holding.

In fiscal 2025 the business reported $394M of profit but ($5M) of owner earnings: $399M less than the profit line, taken out by capital spending and the timing of cash.

	FY2025	FY2024	FY2023	FY2022	FY2021
Reported net income	$394M	($100M)	($31M)	($17M)	$934M
Depreciation & amortizationnon-cash charge added back	+$13M	+$13M	+$17M	+$20M	+$23M
Working capital & othertiming of cash in and out, other non-cash items	−$411M	+$39M	−$12M	+$30M	−$1.0B
Cash from operations	($5M)	($48M)	($26M)	$32M	($62M)
Capital expenditurecash put back in to keep running and to grow	−$576K	−$1M	−$3M	−$9M	−$7M
Owner earnings	($5M)	($49M)	($29M)	$24M	($69M)
Owner-earnings marginowner earnings ÷ revenue	-1%	-8%	-5%	3%	-8%

Owner earnings is the cash an owner could pull out without starving the business: operating cash less the capital it must spend to hold its position .

Much of fiscal 2025's profit didn't arrive as operating cash; it sits in “working capital & other” above. That can be a real inventory or timing swing, or profit that doesn't run through operating cash at all: a heavy tax year, equity-method earnings, or investment income booked through investing. For a year like this, owner earnings understates the cash earned; the full cash-flow statement carries the rest.

Maintenance capex is estimated as depreciation where a growing business invests above it; free cash flow is the figure the scorecard's free-cash margin reads.

III

Quality & stewardship

Returns, the balance sheet, capital allocation, and pay.

Owner’s Scorecard

FY2025 20-F · source on SEC EDGAR →

Will it survive?

Can it pay its interest? —

No meaningful interest burden

Little or no interest expense reported

What this means
Little or no interest expense reported, the business isn't leaning on lenders to operate.
How heavy is the debt, net of cash? +$831M

Net cash, debt-free

Cash $128M + ST investments $702M − debt $0

What this means
Cash and short-term investments exceed every dollar of debt by $831M, on net the company owes nothing, and can act from strength when others can't. Net debt is the leverage figure that matters: the cash is already set against the debt. Strategic or illiquid investments aren't counted here.
How long is cash tied up? -73d

Negative, funded by others

DSO 27 + DIO 0 − DPO 101 days

What this means
Days cash is tied up between paying suppliers and collecting from customers. A negative cycle is a quiet moat: suppliers and customers fund the operation (Buffett's “float”), the company grows on other people's money. (Little or no inventory, a services / asset-light model, so the inventory leg is ~0.)

Is it a good business?

Return on invested capital —

Not enough data

Industry peers: median -2%

What this means
The filing data didn't include the inputs for this check.
Owner-earnings margin 3%

Thin through the cycle

10-yr median margin, range -8%–29%; latest ($5M) = operating cash ($5M) − maintenance capex $576K

Industry peers: median 4%

What this means
What an owner could take out without starving the business: operating cash less the maintenance capital it must spend to hold its position — Buffett's owner earnings. That's -1% of revenue this year, a 3% median across 10 years.
Are earnings backed by cash? -0.01×

Thinly cash-backed

Cash from ops ($5M) ÷ net income $394M

What this means
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.

How is the cash used?

Where do the earnings go? —

No surplus to allocate

What this means
The business didn't generate positive Owner Earnings this year, so any distributions came from the balance sheet or borrowing, not from operations.
Investing or harvesting? 0.05×

Harvesting

Capex $576K ÷ depreciation $13M

What this means
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.

Graham’s defensive tests · 1 of 4 met

Graham’s numerical criteria for the defensive investor (The Intelligent Investor, ch. 14), run on the filings. A floor of safety, not a buy signal; many fine modern businesses fail his strictest liquidity rules by design.

Adequate size Miss

Revenue ≥ $2B · $584M

What this means
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
Strong liquidity Pass

Current ratio ≥ 2× · 2.90×

What this means
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
Earnings stability Miss

A profit every year (10-yr record) · 8 loss years

What this means
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
Dividend record Miss

Uninterrupted dividends · none paid

What this means
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
Earnings growth —

Earnings +33% over the record · —

What this means
Earnings were negative early in the record, a growth rate isn't meaningful.
Moderate price —

P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price

What this means
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Three-year average earnings are $3.37/share (latest year $15.12), the averaged base the calculator's gate runs on, and book value is $49.01/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.

Durability & moat, 2016–2025

Whether the record’s returns held, and what the capital reinvested earned.

Profitable years 2 of 10

What this means
Lost money in 8 year(s), look at what happened there before trusting the average.
Operating margin −14% → −16% (3-yr avg ends)

What this means
The recent-years average (−16%) sits below the early years (−14%), but the latest year (−16%) is back near the early level: a cyclical trough dragging the window down, not a one-way slide. The through-cycle median is −11% — read it across the cycle, not on the dip.
Worst year 2018 · −24.4% op. margin

What this means
Operations went underwater in 2018, understand why before trusting the good years.
Share count −3.4%/yr

What this means
The share count is shrinking, buybacks are quietly growing your slice of the business.
How management talks about it Promotional

What this means
Results have held roughly flat while the filing leans on a promoter’s vocabulary — watch whether the words are doing work the numbers are not.

Does AI threaten the moat?

Elevated contestability

The product is software or information, the very thing capable AI now produces more cheaply, so the moat is more contestable than the record alone implies.

In its own filing Raised, but not as a competitor

The filing raises AI among its risks, but in other terms (security, regulation, energy or the like), not as a competitor to its product; it frames AI mainly as a capability.

AI has collapsed the cost of building a capable substitute for the very thing this business sells. When a credible alternative can be assembled for a fraction of the incumbent's price, it is pricing power that erodes first, not revenue tomorrow. The live question is whether the moat survives that, not whether it held in the past. Whether that question is answerable at all is yours to decide, against your own circle of competence.

Read from the filing's own risk factors, paired with the industry's structure under its SIC code; the durability is read above, the price below.

All figures as filed; the source filing is linked above.

Current Position

as of fiscal year-end, Dec 31, 2025

Can the business pay what it owes this year, off the freshest balance sheet: the quality of the assets, the debt actually coming due, and what a low ratio means here.

Current assets$968M

Cash & short-term investments$831M
Receivables$43M
Other current assets$94M

Current liabilities$334M

Accounts payable$36M
Other current liabilities$297M

Current ratio2.90×all current assets ÷ what's due · Graham looked for 2×

Quick ratio2.90×stricter: inventory excluded

Cash ratio2.49×strictest: cash alone against what's due

Working capital$634Mthe cushion left after near-term bills

Cash runway155.6 yrsthe business is consuming cash; this is how long the cash on hand lasts at that rate

Deeper floors

Tangible book value$1.3Bequity stripped of goodwill & intangibles

Net current asset value$610MGraham's net-net: current assets less all liabilities

Debt incl. operating leases$2M$2M of it operating leases

Deferred revenue$8Mcustomer cash collected before delivery; operating float

From the company's latest filing.

How the cash was used, 2016–2025

Over the record, the business generated $709M of operating cash; how management split it reads as a balanced allocator, splitting cash between the business, owners, and the balance sheet.

Reinvested$251M · 35%
Buybacks$201M · 28%
Retained (debt / cash)$257M · 36%

Returned to owners$201M
44% of the owner earnings the business produced over the span, $0 as dividends and $201M as buybacks.
Average price paid for buybacks—
Buybacks ran $201M over the span, but the filings don't tag the share count needed to deduce the average price paid.
Net change in share count−32.6%
The diluted count fell from 39M to 26M, so the buybacks outran the stock issued to staff.
Dividend record—
No dividend line was reported in the filing data over the span; the record here neither confirms nor rules out a payout.
Return on what it retained−83%
Of the earnings it kept rather than paid out ($155M over the span), annual owner earnings (first three years vs last three) fell $129M, so each retained $1 gave back about 0.83 of yearly owner earnings. Buffett's test, run on owner earnings instead of market value.

Buybacks are gross of stock issued to staff; the share-count line above is the net of that, the figure that decides whether owners gained. The average price paid blends a year of purchases (and any accelerated repurchase), so it is close, not exact. The record of where the cash went and on what terms.

Inverting the record

Invert: instead of why Sohu.com Limited is a good business, the question is what would make owning it a mistake, and whether those marks are in the record. Disconfirming tests across 2016–2025.

1 of the 3 tests turned up something to look into; the other 2 came back clean.

Look hereIs it less profitable than it was?−4.7% vs 7.6%
The owner-earnings margin averaged 7.6% early in the record and −4.7% across the last three years, and the latest year has not recovered. Ask the filing whether that is a structural drift or a cyclical trough — price, mix, cost, or a competitor — and whether it is permanent.

And these came back clean

Did the share count rise anyway?
Did reported profit become cash?

Each test is read from the filings and is noisy alone; a flag can mark a cyclical trough or a year of heavy investment as easily as a problem. The filing says which.

Peers, IT Services & Consulting

The same industry, side by side on owner economics. Each figure is a through-cycle median, so a peak or trough year can’t distort it; the group median at the foot is the line to read each against.

Company	Revenue	Gross margin	Op. margin	ROIC	Owner earn. margin
GDRXGoodRx Holdings Inc.	$797M	—	5.1%	2%	20%
UPWKUpwork Inc.	$788M	73%	-5.3%	-7%	3%
CARSCars.com Inc. Common Stock	$723M	90%	8.1%	5%	21%
HNGEHinge Health Inc.	$588M	77%	-44.6%	—	12%
SOHUSohu.com Limited	$584M	72%	-10.6%	-6%	5%
IBEXIBEX Limited	$558M	—	7.7%	31%	4%
LIFLife360 Inc.	$489M	76%	-15.2%	-28%	-4%
YEXTYext Inc.	$447M	75%	-24.8%	-85%	1%
Group median	—	76%	-8.0%	-6%	5%

The price

What a price has to assume.

What the price implies

reverse-DCF

Enter the US price, in dollars: the NYSE/Nasdaq quote you hold. Per the filing's own cover, “American Depositary Shares, each representing one ordinary”; Sohu.com Limited reports in USD, so every figure in this tool is stated per ADS so your dollar quote reconciles exactly. The record tables elsewhere on this page remain as filed.

Sohu.com Limited is profitable, but owner earnings are negative this year because capital spending currently outruns operating cash, a build-out, so the owner-earnings reverse-DCF has no positive base to grow. We read the price from both ends instead: type a price to see the steady-state profitability it demands, then set the mature margin you would believe and weigh the two against each other. Nothing leaves your browser unless you enter it in your notebook.

Today’s price $

The assumptions Required return 9% Years to get there 10 Revenue growth 0%

Revenue, delivered−7%/yr’20→’25

Mature owner-earnings margin 15%

Enter a price to run it.

Owner earnings it must reach—

Margin the price demands—

Owner-earnings margin today−1%

Two reads of one future. From your price: the owner earnings the company must reach, valued at a mature multiple and discounted back at your rate, expressed as the margin it implies on revenue grown at your rate. From your belief: the mature margin you would credit, set on the dial above. When the margin the price demands runs above the one you would believe, you are paying for a future taken on faith. For a deep cyclical at a trough, normalized through-cycle earnings are the better lens; this mode is for the genuinely unprofitable, and for the profitable business whose capital spending currently outruns its cash.

Weigh SOHU against another business →

Cite: Owner Scorecard, "Sohu.com Limited (SOHU), the owner's record," https://ownerscorecard.com/c/SOHU, data as of 2026-07-09.

Manual order: ← SOGP its page in the Manual SONY →

Industry order: ← SJ the IT Services & Consulting chapter SOPH →