SOHU.COM REPORTS FOURTH QUARTER AND FISCAL YEAR 2021 UNAUDITED FINANCIAL RESULTS

BEIJING,Feb. 22,2022 -- Sohu.com Limited (NASDAQ: SOHU),China's leading online media,video,and game business group,today reported unaudited financial results for the fourth quarter and fiscal year ended December 31,2021.

Fourth Quarter Highlights

Total revenues were US$193 million[1],down 24% year-over-year and 11% quarter-over-quarter.

Brand advertising revenues were US$34 million,down 20% year-over-year and flat quarter-over-quarter.

Online game revenues were US$144 million,down 27% year-over-year and 14% quarter-over-quarter.

GAAP net income[2] attributable to Sohu.com Limited was US$4 million,compared with net income of US$47 million in the fourth quarter of 2020 and net income of US$12 million in the third quarter of 2021.

Non-GAAP[3] net income attributable to Sohu.com Limited was US$0.2 million,compared with net income of US$53 million in the fourth quarter of 2020 and net income of US$17 million in the third quarter of 2021.

Fiscal Year 2021 Highlights

Total revenues were US$836 million,up 11% compared with 2020.

Brand advertising revenues were US$135 million,down 8% compared with 2020.

Online game revenues were US$638 million,up 19% compared with 2020.

GAAP net income attributable to Sohu.com Limited was US$69 million,compared with net income of US$33 million in 2020,excluding the impact of an additional accrual of withholding income tax recognized by Changyou in the second quarter of 2020[4].

Non-GAAP net income attributable to Sohu.com Limited was US$79 million,compared withnet incomeof US$51 million in 2020,excluding the impact of the additional accrual of withholding income tax described above.

Dr. Charles Zhang,Chairman and CEO of Sohu.com Limited,commented,"During the fourth quarter of 2021 and for the whole year,we faced ongoing significant challenges from the macroeconomic environment and uncertainties of the COVID-19 pandemic. Despite these headwinds,we were proactive in refining our technology,developing product innovations,improving operating efficiency and exploring differentiated monetization opportunities. In the fourth quarter,we were ahead of guidance in brand advertising revenue,and achieved profitability for the full year and every quarter in 2021. For Sohu Media and Sohu Video,we provided better user experience through improvements in products and social interaction features. We applied advanced live broadcasting technologies to large and unique content marketing events. Based on the competitive advantages of the Sohu product matrix,these live broadcasting events helped us to generate a high volume of premium content and wide social distribution. We were able to further consolidate our influence as a mainstream media platform,and better capture advertisers' attention and budgets. For Changyou,its online game business delivered in-line quarterly results,while its overall revenue for 2021 continued to grow year-over-year."

Fourth Quarter Financial Results

Revenues

Total revenues were US$193 million,down 24% year-over-year and 11% quarter-over-quarter.

Brand advertising revenues totaled US$34 million,down 20% year-over-year and flat quarter-over-quarter. The decrease was mainly due to decreases in portal advertising revenues.

Online game revenues were US$144 million,down 27% year-over-year and 14% quarter-over-quarter. The year-over-year decrease was mainly due to the natural decline of TLBB Vintage,which was launched during the fourth quarter of 2020. The quarter-over-quarter decrease was mainly due to the natural decline of Little Raccoon: Heroes,which was launched during the third quarter of 2021.

Gross Margin

Both GAAP and non-GAAP gross margin was 73%,compared with 79% in the fourth quarter of 2020 and 74% in the third quarter of 2021.

Both GAAP and non-GAAP gross margin for the brand advertising business was28%,compared with 31% in the fourth quarter of 2020 and29% in the thirdquarter of 2021.

Both GAAP and non-GAAP gross margin for online games was 84%,compared with 90% in the fourth quarter of 2020 and 83% in the third quarter of 2021. The year-over-year decrease in gross margin was mainly due to a higher percentage revenue contribution from mobile games,which typically require higher revenue-sharing payments.

Operating Expenses

For thefourth quarter of 2021,GAAP operating expenses totaled US$144 million,up 8% year-over-year and 7% quarter-over-quarter. Non-GAAP operating expenses were US$144 million,up 9% year-over-year and quarter-over-quarter. The year-over-year increase was mainly due to increases in salary and benefits expenses and marketing expenses. The quarter-over-quarter increase was mainly due to increases in marketing expenses and increases in Changyou's outsourcing fees related to product development.

Operating Profit/(Loss)

GAAP operating loss was US$3 million,compared with an operating profit ofUS$67million in the fourth quarter of 2020 and an operating profit of US$25 million in the third quarter of 2021.

Non-GAAP operating loss wasUS$3 million,compared with an operating profit ofUS$68millionin thefourth quarter of 2020 and an operating profit of US$28 millionin the third quarter of 2021.

Income Tax Expense

GAAP income tax expense was US$9 million,compared with income tax expense of US$21 million in the fourth quarter of 2020 and income tax expense of US$20 million in the third quarter of 2021. Non-GAAP income tax expense was US$6 million,compared with income tax expense of US$21 million in the fourth quarter of 2020 and income tax expense of US$19 million in the third quarter of 2021. Income tax expense in the fourth quarter of 2021 included a one-time tax benefit of US$7 million recognized by Changyou after pre-adjustment of its income tax due for 2021.

Net Income

GAAP net income attributable to Sohu.com Limited was US$4 million,or net income of US$0.09 per fully-diluted ADS,compared with net income of US$47 million in the fourth quarter of 2020 and net income of US$12 million in the third quarter of 2021.

Non-GAAP netincome attributable to Sohu.com Limited was US$0.2million,or net income of US$0.01per fully-diluted ADS,compared withnet incomeof US$53 million in thefourth quarter of 2020 and net incomeof US$17 million in the third quarter of 2021.

Liquidity and Capital Resources

As of December 31,2021,cash and cash equivalents,short-term investmentsand long-term time deposits were totaled approximately $1.59 billion.

Fiscal Year 2021Financial Results

Revenues

Total revenues were US$836 million,down 8% compared with 2020. The decrease was mainly due to decreases in portal advertising revenues.

Online game revenues were US$638 million,up 19% compared with 2020. The year-over-year increase was mainly from TLBB Vintage.

Gross Margin

Both GAAP and non-GAAP gross margin was 76%,compared with 71% in 2020.

Both GAAP and non-GAAP gross margin for the brand advertising business was 26%,compared with28% in2020.

Both GAAP and non-GAAP gross margin for online games was 86%,compared with 83% in 2020.

Operating Expenses

For 2021,GAAP operating expenses totaled US$533 million,up 16% compared with 2020. Non-GAAP operating expenses were US$525 million,up 18% compared with 2020. The increase in operating expenses was mainly due to increases in salary and benefits expenses and marketing expenses.

Operating Profit

GAAP operating profit was US$97 million,compared with an operating profit ofUS$73 million in 2020.

Non-GAAP operating profit wasUS$106 million,compared with an operating profit ofUS$88 millionin2020.

Income Tax Expense

GAAP income tax expense was US$62 million,compared with income tax expense of US$133 million in 2020. Non-GAAP income tax expense was US$56 million,compared with income tax expense of US$127 million in 2020. The income tax expense in 2020 included an additional accrual of withholding income tax of US$88 million recognized by Changyou in the second quarter of 2020,as Changyou changed its policy for its PRC subsidiaries with respect to distribution of cash dividends after the completion of the privatization of Changyou.

Net Income

GAAP net income attributable to Sohu.com Limited was US$69 million,or net income of US$1.75 per fully-diluted ADS,compared with net incomeof US$33 million in 2020,excluding the impact of the additional accrual of withholding income tax recognized by Changyou in the second quarter of 2020 described above. Non-GAAP net income attributable to Sohu.com Limited was US$79 million,or net income of US$2.00 per fully-diluted ADS,excluding the impact of the additional accrual of withholding income tax described above.

Supplementary Information for Changyou Results

FourthQuarter 2021 OperatingResults

For PC games,total average monthly active user accounts[5] (MAU) were 2.0 million,a decrease of 12% year-over-year and an increase of 1% quarter-over-quarter. The year-over-year decrease was mainly due to the natural decline of Changyou's older games. Total quarterly aggregate active paying accounts[6] (APA) were 0.9 million,flat year-over-year and a decrease of 8% quarter-over-quarter. The quarter-over-quarter decrease was mainly due to fewer in-game promotional activities launched for TLBB PC during the quarter.

For mobile games,total average MAU were 2.5 million,an increase of 3% year-over-year and a decrease of 45% quarter-over-quarter. The quarter-over-quarter decrease was mainly due to the natural decline of Little Raccoon: Heroes. Total quarterly APA were 0.5 million,a decrease of 14% year-over-year and 48% quarter-over-quarter. The year-over-year decrease was mainly from TLBB Honor and Illusion Connect. The quarter-over-quarter decrease was mainly due to the natural decline of Little Raccoon: Heroes.

FourthQuarter 2021 Unaudited Financial Results

Total revenueswere US$146 million,a decrease of 27% year-over-year and 14% quarter-over-quarter. Online game revenues were US$144 million,a decrease of 27% year-over-year and 14% quarter-over-quarter. Online advertising revenues were US$2 million,a decrease of 27% year-over-year and 33% quarter-over-quarter.

GAAP and non-GAAP gross profit were both US$122 million,a decrease of 32% year-over-year and 13% quarter-over-quarter.

GAAP operating expenseswere US$69 million,flat year-over-year andan increase of 8%quarter-over-quarter. The quarter-over-quarter increase was mainly due to an increase in outsourcing fees related to product development.

Non-GAAP operating expenseswere US$67 million,an increase of 1% year-over-year and 10% quarter-over-quarter.

GAAP operating profitwas US$53 million,compared with an operating profit of US$110 million for the fourthquarter of 2020 and US$77 million for the thirdquarter of 2021.

Non-GAAP operating profitwas US$55 million,compared with a non-GAAP operating profit of US$112 million for the fourth quarter of 2020 and US$79 million for the third quarter of 2021.

Fiscal Year 2021 Unaudited Financial Results

Total revenueswere US$649 million,an increase of 18% year-over-year. Online game revenues were US$638 million,an increase of 19% year-over-year. Online advertising revenues were US$11 million,a decrease of 8% year-over-year.

GAAP and non-GAAP gross profit were both US$558 million,an increase of 23% year-over-year.

GAAP operating expenseswere US$256 million,an increase of 13% year-over-year. The year-over-year increase was mainly due to an increase in bonus expenses related to revenue growth.

Non-GAAP operating expenseswere US$249 million,an increase of 15% year-over-year.

GAAP operating profitwas US$302 million,compared with an operating profit of US$226 million for 2020.

Non-GAAP operating profitwas US$310 million,compared with a non-GAAP operating profit of US$238 million for 2020.

Recent Development

As previously announced,on November 13,2021 Sohu's board of directors authorized a share repurchase program of up to US$100 million of the outstanding American depositary shares ("ADSs") of Sohu over the next twelve months. As of February 18,2022,Sohu had repurchased 3,079,064 ADSs under the share repurchase program for an aggregate cost of approximately US$53 million.

Business Outlook

For the first quarter of 2022,Sohu estimates:

Brand advertising revenues to be between US$23million and US$26 million; this implies an annual decrease of 15% to 25% and a sequentialdecrease of 23% to 32%.

Online game revenues to be between US$130 million and US$140 million; this implies an annual decrease of 21% to 26% and a sequential decrease of 3% to 10%.

Non-GAAP net loss attributable to Sohu.com Limited to be between US$10 million and US$20 million; and GAAP net loss attributable to Sohu.com Limited to be between US$13 million US$23 million.

For the firstquarter 2022 guidance,the Company has adopted a presumed exchange rate of RMB6.36 =US$1.00,as compared with the actual exchange rate of approximately RMB6.48=US$1.00 for the firstquarter of 2021,and RMB6.40=US$1.00for thefourthquarter of 2021.

This forecast reflects Sohu's management's current and preliminary view,which is subject to substantial uncertainty,particularly in view of the potential ongoing impact of the worldwide COVID-19 pandemic,which remains difficult to predict.

Non-GAAP Disclosure

To supplement the unaudited consolidated financial statements presented in accordance with accounting principles generally accepted in the United States of America ("GAAP"),Sohu's management uses non-GAAP measures of gross profit,operating profit,net income,net income attributable to Sohu.com Limited and diluted net income attributable to Sohu.com Limited per ADS,which are adjusted from results based on GAAP to exclude the impact of the share-based awards,which consist mainly of share-based compensation expense; changes in fair value recognized in the Company's consolidated statements of operations with respect to equity investments with readily determinable fair values; an impairment charge recognized for an investment unrelated to the Company's core businesses; and interest expense recognized in connection with the Toll Charge imposed by the U.S. TCJA. These measures should be considered in addition to results prepared in accordance with GAAP,but should not be considered a substitute for,or superior to,GAAP results.

Sohu's management believes excluding share-based compensation expense,changes in fair value recognized in the Company's consolidated statements of operations with respect to equity investments with readily determinable fair values; the impairment charge recognized for an investment unrelated to the Company's core businesses; and interest recognized in connection with the Toll Charge from its non-GAAP financial measure is useful for itself and investors. Further,the impact of share-based compensation expense and changes in fair value recognized in the Company's consolidated statements of operations with respect to equity investments with readily determinable fair values; the impairment charge recognized for an investment unrelated to the Company's core businesses; and interest expense recognized in connection with the Toll Charge cannot be anticipated by management and business line leaders and these expenses were not built into the annual budgets and quarterly forecasts that have been the basis for information Sohu provides to analysts and investors as guidance for future operating performance. As the impact of share-based compensation expense,changes in fair value recognized in the Company's consolidated statements of operations with respect to equity investments with readily determinable fair values,and the impairment charge recognized for an investment unrelated to the Company's core businesses does not involve subsequent cash outflow or is reflected in the cash flows at the equity transaction level,Sohu does not factor this impact in when evaluating and approving expenditures or when determining the allocation of its resources to its business segments. As a result,in general,the monthly financial results for internal reporting and any performance measures for commissions and bonuses are based on non-GAAP financial measures that exclude share-based compensation expense,the impairment charge recognized for an investment unrelated to the Company's core businesses,and also excluded the interest expense recognized in connection with the Toll Charge.

The non-GAAP financial measures are provided to enhance investors' overall understanding of Sohu's current financial performance and prospects for the future. A limitation of using non-GAAP gross profit,excluding share-based compensation expense,is that the impact of share-based awards has been and will continue to be a significant recurring expense in Sohu's business for the foreseeable future. In order to mitigate these limitations Sohu has provided specific information regarding the GAAP amounts excluded from each non-GAAP measure. The accompanying tables include details on the reconciliation between the GAAP financial measures that are most directly comparable to the non-GAAP financial measures that have been presented.

Notes to Financial Information

Financial information in this press release other than the information indicated as being non-GAAP is derived from Sohu's unaudited financial statements prepared in accordance with GAAP.

Safe Harbor Statement

This announcement contains forward-looking statements. It is currently expected that the Business Outlook will not be updated until release of Sohu's next quarterly earnings announcement; however,Sohu reserves right to update its Business Outlook at any time for any reason. Statements that are not historical facts,including statements about Sohu's beliefs and expectations,are forward-looking statements. These statements are based on current plans,estimates and projections,and therefore you should not place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include,but are not limited to,instability in global financial and credit markets and its potential impact on the Chinese economy; exchange rate fluctuations,including their potential impact on the Chinese economy and on Sohu's reported US dollar results; recent slow-downs in the growth of the Chinese economy; the uncertain regulatory landscape in the People's Republic of China; fluctuations in Sohu's quarterly operating results; the possibilities that Sohu will be unable to recoup its investment in video content and that Changyou will be unable to develop a series of successful games for mobile platforms or successfully monetize mobile games it develops or acquires; Sohu's reliance on online advertising sales,online games and mobile services for its revenues; the impact of the U.S. TCJA; and the effects of the COVID-19 pandemic on the economy in China in general and on Sohu's business in particular. Further information regarding these and other risks is included in Sohu's annual report on Form 20-F for the year ended December 31,2020,and other filings with and information furnished to the Securities and Exchange Commission.

Conference Call and Webcast

Sohu's management team will host a conference call at 7:30 a.m. U.S. Eastern Time,February 22,2022 (8:30 p.m. Beijing/Hong Kong time,2022) following the quarterly results announcement. Participants can register for the conference call by navigating tohttp://apac.directeventreg.com/registration/event/3658638. Once preregistration has been completed,participants will receive dial-in numbers,an event passcode,and a unique registrant ID.

To join the conference,please dial the number you receive,enter the event passcode followed by your unique registrant ID,and you will be joined to the conference instantly. Please dial in 10 minutes before the call is scheduled to begin.

A telephone replay of the call will be available after the conclusion of the conference call at 10:30 a.m. Eastern Time February 22 through March 1,2022. The dial-in details for the telephone replay are:

International:

+1-646-254-3697

Passcode:

3658638

The live Webcast and archive of the conference call will be available on the Investor Relations section of Sohu's Website at http://investors.sohu.com/.

About Sohu.com

Sohu.com Limited (NASDAQ: SOHU) was established by Dr. Charles Zhang,one of China's internet pioneers,in the 1990s. As a mainstream media platform in China,Sohu is indispensable to the daily life of millions of Chinese,providing a network of web properties and community based products which continually offer a broad array of choices regarding information,entertainment and communication to the vast number of Sohu users. Sohu has built one of the most comprehensive matrices of Chinese language web properties,consisting of the leading online media destinations Sohu News App,mobile news portal m.sohu.com,PC portal www.sohu.com; online video website tv.sohu.com; and the online games platform www.changyou.com/en/.

Sohu provides online brand advertising services as well as multiple news,information and content services on its matrix of websites and also on its mobile platforms. Sohu's online game business,conducted by its subsidiary Changyou,develops and operates a diverse portfolio of PC and mobile games,such as Tian Long Ba Bu ("TLBB"),one of the most popular PC games in China. Changyou also owns and operates the 17173.com Website,a game information portal in China.

For investor and media inquiries,please contact:

In China:

Ms. Pu Huang

Sohu.com Limited

Tel:

+86 (10) 6272-6645

E-mail:

ir@contact.sohu.com

In the United States:

Ms. Linda Bergkamp

Christensen

Tel:

+1 (480) 614-3004

E-mail:

lbergkamp@christensenir.com

[1] On a constant currency (non-GAAP) basis,if the exchange rate in the fourth quarter of 2021 had been the same as it was in the fourth quarter of 2020,or RMB6.63=US$1.00,US$ total revenues in the fourth quarter of 2021 would have been US$186 million,or US$7 million less than GAAP total revenues,and down 26% year-over-year.

[2] Following the completion on September 23,2021 of the transaction with Tencent related to Sogou,Sohu no longer has any ownership interest in Sogou. Retrospective adjustments to the historical statements have been made in order to provide a consistent basis of comparison. Unless indicated otherwise,results presented in this release exclude results from Sogou operations. For historical statements,the results of operations of Sogou and the gain from its disposal are presented in separate line items as discontinued operations.

[3] Non-GAAP results exclude share-basedcompensation expense; changes in fair value recognized in the Company's consolidated statements of operations with respect to equity investments with readily determinable fair values; an impairment charge recognized for an investment unrelated to the Company's core businesses; and interest expense recognized in connection with the one-time transition tax (the "Toll Charge") imposed by the U.S. Tax Cuts and Jobs Act signed into law on December 22,2017 (the "U.S. TCJA"). Explanation of the Company's non-GAAP financial measures and related reconciliations to GAAP financial measures are included in the accompanying "Non-GAAP Disclosure" and "Reconciliations of Non-GAAP Results of Operation Measures to the Nearest Comparable GAAP Measures."

[4] Following completion of the Changyou privatization,Changyou changed its policy for its PRC subsidiaries with respect to distribution of cash dividends. As a result,Changyou recognized an additional accrual of withholding income tax of US$88 million in the second quarter of 2020.

[5]Monthly active user accounts refers to the number of registered accounts that are logged in to these games at least once during the month.

[6]Quarterly aggregate active paying accounts refers to the number of accounts from which game points are utilized at least once during the quarter.

SOHU.COM LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED,IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

Three Months Ended

Twelve Months Ended

Dec. 31,2021

Sep. 30,2021

Dec. 31,2020

Dec. 31,2020

Revenues:

Brand advertising

$

33,638

$

33,748

$

41,810

$

134,967

$

146,526

Online games

143,708

166,750

196,063

638,225

536,684

Others

15,645

15,592

15,362

62,384

66,680

Total revenues

192,991

216,090

253,235

835,576

749,890

Cost of revenues:

Brand advertising (includes share-based compensation

expense of $-115,$7,$-59,$1,and $177 respectively)

24,214

24,006

28,836

99,522

105,604

Online games (includes share-based compensation

expense of $43,$78,$79,$276,and $543,respectively)

23,053

28,977

19,154

87,616

91,526

Others

4,477

3,754

5,086

17,533

20,307

Total cost of revenues

51,744

56,737

53,076

204,671

217,437

Gross profit

141,247

159,353

200,159

630,905

532,453

Operating expenses:

Product development (includes share-based

compensation expense of $437,118,$966,$3,904,and

$7,326 respectively)

68,392

65,898

65,671

268,863

241,941

Sales and marketing (includes share-based

compensation expense of $-186,$83,$-95,$168,and

$458 respectively)

54,793

45,349

51,945

182,690

159,787

General and administrative (includes share-based

compensation expense of $110,368,$459,$4,229,

and $5,976 respectively)

20,970

23,290

15,696

81,880

57,354

Total operating expenses

144,155

134,537

133,312

533,433

459,082

Operating profit/(loss)

(2,908)

24,816

66,847

97,472

73,371

Other income,net

12,982

5,043

1,738

29,416

25,993

Interest income

3,359

4,200

2,670

15,641

7,369

Interest expense

-

(2,501)

(1,176)

(7,500)

(6,234)

Exchange difference

(1,150)

317

(2,080)

(3,462)

(3,800)

Income before income tax expense

12,283

31,875

67,999

131,567

96,699

Income tax expense[7]

8,695

19,577

21,416

62,296

133,226

Net income/(loss) from continuing operations

3,588

12,298

46,583

69,271

(36,527)

Net income/(loss) from discontinued operations,net of tax[8]

-

756,768

(9,212)

864,902

(91,793)

Net income/(loss)

3,588

769,066

37,371

934,173

(128,320)

Less: Net income/( loss) from continuing operations

attributable to the noncontrolling interest shareholders

(1)

(1)

2

(3)

18,448

Less: Net income/(loss) from discontinued operations

attributable to the noncontrolling interest shareholders

-

(65,134)

(6,119)

6,451

(60,656)

Net income/(loss) from continuing operations attributable

to Sohu.com Limited

3,589

12,299

46,581

69,274

(54,975)

Net income/(loss) from discontinued operations

attributable to Sohu.com Limited

-

821,902

(3,093)

858,451

(31,137)

Net income/(loss) attributable to Sohu.com Limited

3,589

834,201

43,488

927,725

(86,112)

Basic net income/(loss) from continuing operations per

share/ADS attributable to Sohu.com Limited[9]

$

0.09

$

0.31

$

1.18

$

1.75

$

(1.39)

Basic net income/(loss) from discontinued operations per

share/ADS attributable to Sohu.com Limited

$

-

$

20.75

$

(0.08)

$

21.74

$

(0.79)

Basic net income/(loss) per share/ADS attributable to Sohu.com Limited

$

0.09

$

21.06

$

1.10

$

23.49

$

(2.18)

Shares/ADSs used in computing basic net income/(loss)

per share/ADS attributable to Sohu.com Limited

39,373

39,614

39,508

39,501

39,452

Diluted net income/(loss) from continuing operations per

share/ADS attributable to Sohu.com Limited

$

0.09

$

0.31

$

1.18

$

1.75

$

(1.40)

Diluted net income/(loss) from discontinued operations per share/ADS attributable to

Sohu.com Limited

$

-

$

20.75

$

(0.08)

$

21.74

$

(0.79)

Diluted net income/(loss) per share/ADS attributable to Sohu.com Limited

$

0.09

$

21.06

$

1.10

$

23.49

$

(2.19)

Shares/ADSs used in computing diluted net income/(loss)

per share/ADS attributable to Sohu.com Limited

39,452

[7] Income tax expense for 2020 includes an additional accrual of withholding income tax of US$88 million recognized by Changyou in the second quarter of 2020,as Changyou

changed its policy for its PRC subsidiaries with respect to distribution of cash dividends after the completion of the privatization of Changyou.

[8] Following the completion on September 23,Sohu no longer has any ownership interest in Sogou. Retrospective

adjustments to the historical statements have been made in order to provide a consistent basis of comparison. Unless indicated otherwise,results presented in this release exclude

results from Sogou operations. For historical statements,the results of operations of Sogou and the gain from its disposal are presented in separate line items as discontinued

operations.

[9]Each ADS represents one ordinary share.

SOHU.COM LIMITED

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED,IN THOUSANDS)

As of Dec. 31,2021

As of Dec. 31,2020

ASSETS

Current assets:

Cash and cash equivalents

$

998,949

$

217,057

Restricted cash

1,969

330,791

Short-term investments

399,345

100,745

Accounts receivable,net

82,550

87,521

Prepaid and other current assets

107,311

106,590

Assets held for sale (current)

-

1,412,168

Total current assets

1,590,124

2,254,872

Long-term investments,net

53,121

31,634

Fixed assets,net

329,997

337,674

Goodwill

48,811

48,434

Intangible assets,net

9,136

4,842

Long -term time deposits

189,007

-

Restricted time deposits

-

101,519

Prepaid non-current assets

-

1,006

Other assets

25,589

42,140

Total assets

$

2,245,785

$

2,822,121

LIABILITIES

Current liabilities:

Accounts payable

$

87,447

$

107,611

Accrued liabilities

138,196

157,513

Receipts in advance and deferred revenue

57,041

52,055

Accrued salary and benefits

91,485

100,826

Taxes payable

16,714

28,006

Short-term bank loans

-

315,550

Other short-term liabilities

112,568

106,171

Liabilities held for sale (current)

-

416,998

Total current liabilities

$

503,451

$

1,284,730

Long-term other payables

3,922

3,202

Long-term bank loans

-

92,000

Long-term tax liabilities

443,083

406,353

Other long-term liabilities

3,142

3,855

Total long-term liabilities

$

450,147

$

505,410

Total liabilities

$

953,598

$

1,790,140

SHAREHOLDERS' EQUITY:

Sohu.com Limited shareholders' equity

1,290,869

347,369

Noncontrolling interest

1,318

684,612

Total shareholders' equity

$

1,292,187

$

1,031,981

Total liabilities and shareholders' equity

$

2,121

SOHU.COM LIMITED

RECONCILIATIONS OF NON-GAAP RESULTS OFOPERATIONS MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES

(UNAUDITED,IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

Three Months Ended Dec. 31,2021

Three Months Ended Sep. 30,2021

Three Months Ended Dec. 31,2020

GAAP

Non-GAAP

Adjustments

Non-

GAAP

GAAP

Non-GAAP

Adjustments

Non-

GAAP

GAAP

Non-GAAP

Adjustments

Non-

GAAP

(115)

(a)

7

(a)

(59)

(a)

Brand advertising gross profit

$

9,424

$

(115)

$

9,309

$

9,742

$

7

$

9,749

$

12,974

$

(59)

$

12,915

Brand advertising gross margin

28%

28%

29%

29%

31%

31%

43

(a)

78

(a)

79

(a)

Online games gross profit

$

120,655

$

43

$

120,698

$

137,773

$

78

$

137,851

$

176,909

$

79

$

176,988

Online games gross margin

84%

84%

83%

83%

90%

90%

-

(a)

-

(a)

-

(a)

Others gross profit

$

11,168

$

-

$

11,168

$

11,838

$

-

$

11,838

$

10,276

$

-

$

10,276

Others gross margin

71%

71%

76%

76%

67%

67%

(72)

(a)

85

(a)

20

(a)

Gross profit

$

141,247

$

(72)

$

141,175

$

159,353

$

85

$

159,438

$

200,159

$

20

$

200,179

Gross margin

73%

73%

74%

74%

79%

79%

Operating expenses

$

144,155

$

(361)

(a) $

143,794

$

134,537

$

(2,639)

(a) $

131,898

$

133,312

$

(1,330)

(a) $

131,982

289

(a)

2,724

(a)

1,350

(a)

Operating profit/(loss)

$

(2,908)

$

289

$

(2,619)

$

24,816

$

2,724

$

27,540

$

66,847

$

1,350

$

68,197

Operating margin

-2%

-1%

11%

13%

26%

27%

Income tax expense

$

8,695

$

(2,863)

(b,c)$

5,832

$

19,577

$

(865)

(b,c)$

18,712

$

21,416

$

(8)

(b,c)$

21,408

289

(a)

2,350

(a)

(4,900)

(b)

1,068

(b)

3,547

(b)

1,230

(c)

1,221

(c)

1,190

(c)

Net income before non-controlling

interest

$

3,588

$

(3,381)

$

207

$

12,298

$

5,013

$

17,311

$

46,583

$

6,087

$

52,670

289

(a)

2,190

(c)

Net income from continuing

operations attributable to Sohu.com

Limited for diluted net loss per

share/ADS

$

3,589

$

(3,381)

$

208

$

12,299

$

5,312

$

46,581

$

6,668

Net income/(loss) from discontinued

operations attributable to Sohu.com

Limited for diluted netloss per

share/ADS[10]

$

-

$

-

$

-

$

821,902

$

320

$

822,222

$

(3,093)

$

425

$

(2,668)

Net income attributable to Sohu.com

Limited for diluted net loss per

share/ADS

$

3,381)

$

208

$

834,201

$

5,333

$

839,534

$

43,488

$

6,512

$

50,000

Diluted net income from continuing

operations per share/ADS

attributable to Sohu.com Limited

$

0.09

$

0.01

$

0.31

$

0.44

$

1.18

$

1.33

Diluted net income/(loss) from

discontinued operations per

share/ADS attributable to Sohu.com

Limited

$

-

$

-

$

20.75

$

20.76

$

(0.08)

$

(0.06)

Diluted net income per share/ADS

attributable to Sohu.com Limited

$

0.09

$

0.01

$

21.06

$

21.19

$

1.10

$

1.27

Shares/ADSs used in computing

diluted net income/(loss) per

share/ADS attributable to Sohu.com

Limited

39,508

Note:

(a)To eliminate the impact of share-based awards as measured using the fair value method. This adjustment does not have an impact on income tax expense.

(b)To adjust for changes in the fair value of the Company's investments and the income tax effect.

(c) To adjust for the effect of the U.S. TCJA.

[10] Following the completion on September 23,Sohu no longer has any ownership interest in Sogou. Retrospective adjustments to the historical

statements have been made in order to provide a consistent basis of comparison. Unless indicated otherwise,

the results of operations of Sogou and the gain from its disposal are presented in separate line items as discontinued operations.

SOHU.COM LIMITED

RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATION MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES

(UNAUDITED,IN THOUSANDS EXCEPT PER SHARE AMOUNTS)

Twelve Months Ended Dec. 31,2021

Twelve Months Ended Dec. 31,2020

GAAP

Non-GAAP

Adjustments

Non-

GAAP

GAAP

Non-GAAP

Adjustments

Non-

GAAP

1

(a)

177

(a)

Brand advertising gross profit

$

35,445

$

1

$

35,446

$

40,922

$

177

$

41,099

Brand advertising gross margin

26%

26%

28%

28%

276

(a)

543

(a)

Online games gross profit

$

550,609

$

276

$

550,885

$

445,158

$

543

$

445,701

Online games gross margin

86%

86%

83%

83%

-

(a)

-

(a)

Others gross profit

$

44,851

$

-

$

44,851

$

46,373

$

-

$

46,373

Others gross margin

72%

72%

70%

70%

277

(a)

720

(a)

Gross profit

$

630,905

$

277

$

631,182

$

532,453

$

720

$

533,173

Gross margin

76%

76%

71%

71%

Operating expenses

$

533,433

$

(8,301)

(a)$

525,132

$

459,082

$

(13,760)

(a) $

445,322

8,578

(a)

14,480

(a)

Operating profit

$

97,472

$

8,578

$

106,050

$

73,371

$

14,480

$

87,851

Operating margin

12%

13%

10%

12%

Income tax expense[11]

$

62,296

$

(6,101)

(c,d)$

56,195

$

133,226

$

(5,985)

(c,d)$

127,241

8,480

(a)

(3,828)

(c)

660

(c)

4,827

(d)

6,205

(d)

156

(e)

-

(e)

Net income/(loss) before non-controlling

interest

69,271

9,733

79,004

(36,527)

21,345

(15,182)

8578

(a)

14,480

(a)

-

(b)

(2,868)

(b)

(3,205

(d)

156

(e)

-

(e)

Net income/(loss) from continuing

operations attributable to Sohu.com Limited

for diluted netloss per ADS

$

69,274

$

9,733

$

79,007

$

(55,365)

$

18,477

$

(36,888)

Net income/(loss) from discontinued

operations attributable to Sohu.com Limited

for diluted net loss per ADS[12]

$

858,431

1,216

859,647

$

(31,139)

3,048

$

(28,091)

Net income/(loss) attributable to Sohu.com

Limited for diluted net loss per ADS

$

927,705

10,949

938,654

$

(86,504)

21,525

$

(64,979)

Diluted net income/(loss) from continuing

operations per ADS attributable to

Sohu.com Limited

$

1.75

$

2.00

$

(1.40)

$

(0.94)

Diluted net income/ (loss) from

discontinued operations per ADS

attributable to Sohu.com Limited

$

21.74

21.76

$

(0.79)

$

(0.71)

Diluted net income/(loss) per ADS

attributable to Sohu.com Limited.

$

23.49

23.76

$

(2.19)

$

(1.65)

ADS used in computing diluted net

income/(loss) per ADS attributable to

Sohu.com Limited

39,452

39,452

Note:

(a)To eliminate the impact of share-based awards as measured using the fair value method. This adjustment does not have an impact on income tax expense.

(b) To adjust Sohu's economic interests in Changyou attributable to the above non-GAAP adjustments. This adjustment does not have an impact on income tax expense.

(c)To adjust for changes in the fair value of the Company's investments and the income tax effect.

(d) To adjust for the effect of the U.S. TCJA.

(e) To adjust for the one-time impairment charge recognized for an investment unrelated to the Company's core businesses.

[11] For the income tax expense in 2020,following completion of the Changyou privatization,Changyou changed its policy for its PRC subsidiaries with respect to

distribution of cash dividends. As a result,Changyou recognized an additional accrual of withholding income tax of US$88 million in the second quarter of 2020.

[12] Following the completion on September 23,Sohu no longer has any ownership interest in Sogou.

Retrospective adjustments to the historical statements have been made in order to provide a consistent basis of comparison. Unless indicated otherwise,results

presented in this release exclude results from Sogou operations. For historical statements,the results of operations of Sogou and the gain from its disposal are

presented in separate line items as discontinued operations.

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