On February 22, Sohu (SOHU. US) announced its 2021Q4 and full-year financial reports. According to the data, the company's Q4 revenue reached $193 million, and the total annual revenue reached $836 million, an increase of 11% year-on-year. Non-GAAP continuing operations net income attributable to Sohu was $79 million. The company's annual revenue and profit have increased year-on-year.
Judging from the results, even if the epidemic and macroeconomic downward pressure have made the external development environment more complicated, Sohu still relies on "returning to Internet innovation supported by technology and products" and handed over a good report card.
First, each quarter of 2021 will be profitable, and the annual profit will be achieved for two consecutive years in a complex environment
Looking back at Sohu's business performance in the first three quarters of 2021, "exceeding expectations" is a high-frequency word.
In 2021, Q1, Q2 and Q3 achieved revenue of $222 million, $204 million and $216 million respectively, and net profit reached $37 million, $25 million and $17 million, respectively. Combined with the fact that Q4 continues to maintain profitability, Sohu has achieved a new achievement of average profitability in each quarter in 2021.
Pulling the long-term latitude, the continuous improvement trend of Sohu's performance is more obvious. It is not difficult to find from the company's revenue change trend between 2017 and 2021 that Sohu, which is highly focused on media and social networking, has resumed growth.
(Source: Gronhui)
In terms of business, Sohu's other businesses account for less than 1% of the total revenue, and the business focus is still on online games and brand advertising. Online games have always been Sohu's cash cow business, and in 2021, the company's online game revenue reached $638 million, an increase of 19% year-on-year, and online games accounted for 76% of total revenue, continuing to provide steady support for performance growth.
The brand advertising business achieved revenue of $135 million, a slight decline. However, this situation is placed in the context of the macroeconomic weakness affecting the demand for advertising delivery, and the advertising revenue of Internet manufacturers in the second half of the year is generally affected, which is basically in line with or even better than expected. Zhang Chaoyang, founder, chairman of the board and chief executive officer of Sohu, said: "In the fourth quarter, our advertising revenue exceeded the upper limit of our guidance expectations and achieved profitability in all quarters and full years of 2021. ”
Overall, in a volatile environment, Sohu has stabilized its upward development trend and achieved full-year profitability for two consecutive years.
Second, the gross profit margin reached a new high, highlighting the true color of steady operation
At the same time as revenue growth, thanks to the long-term cost control strategy, the company's comprehensive gross profit margin also showed a continuous upward trend. Despite the pressure of the external environment, the company's gross profit margin in 2021 still hit a new high. In the past five years, the company's gross profit margin level has increased from 44.37% in 2017 to 76% in 2021. Among them, the gross profit margin of the online game business increased from 83% last year to 86%.
From the perspective of asset-liability ratio, it can also be clearly seen that the company's healthy and high-quality development trend. By 2021, the company's asset-liability ratio will hit a new low in the past five years, reaching 42.46%, a decrease of about 21 percentage points compared with last year, which means that the company's operation tends to be stable and the anti-risk coefficient is significantly enhanced.
Third, the $100 million stock repurchase plan is more than half, and the future development is full of confidence
In the past, the big box of Sohu was complicated, and under the highly focused adjustment strategy, the company's performance data improved, and the effectiveness of the reform has emerged. From the multiple layouts at this stage, it can also be seen that the company is full of confidence in future development.
On the one hand, under the stable business strategy and extensive media ecology, the company proposes to take live video broadcasting as the middle stage, optimize with the help of product technology innovation, integrate the advantages of media resources, and drive the overall improvement of media value. On the video side, Sohu continues to exert efforts on "small essence" self-made dramas, and in 2021, under the environment of insufficient supply of video content, the company launched a variety of quality dramas with various genres such as "My Pet Major General", "He Confessed in the Backlight", "I Love You", "Intimate Player", "Silent Proof" and other genres, which received widespread attention and good word-of-mouth feedback, highlighting the business precipitation of the veteran media platform.
On the live broadcast end, Sohu's strong circle-breaking knowledge live broadcast "Zhang Chaoyang's Physics Lesson"; the unique live broadcast variety show "Comedy Open Wheat", "Ice and Snow New Year", "Sohu Snow Mountain Trip", etc.; immersive recommendation and sharing live broadcast "Charles's Good Things Sharing", "Sister's Good Things Sharing", etc.; Sohu News Marathon With Extensive Social Influence, the Four Places United Charity Run, the China Drone Image Contest and the Sohu National School Flower and School Grass Competition and other live broadcast activities, in the dissemination of data performance, Advertiser feedback and ecological effects have achieved good performance, and are continuing to consolidate the company's product matrix advantages, boosting the company to actively grasp the trillion live broadcast market.
On the other hand, Sohu approved the implementation of a one-year, up to $100 million American Depositary Stock Repurchase Program. According to the plan, as of February 18, 2022, Sohu has repurchased 3,079,064 shares of Sohu American Depositary Shares, with a total amount of about US$53 million, showing its confidence in development with real money and silver.
Sohu has ample ammunition to implement the established strategy and escort the development of the company's game, media and video businesses. As far as the company's stock price trend is concerned, under the overall situation of the 2021 China stock market, Sohu's performance is relatively firm, and it showed certain signs of bottom reversal at the beginning of the year.
(Source: Futu Cattle)