Benzinga | Aug 9, 2021 07:11AM EDT

Tencent's Planned Acquisition, Lower Traffic Activity Continue To Weigh On Sogou's Q2 Results

* Chinese search engine company Sogou Inc (NYSE:SOGO) reported a second-quarter FY21 revenue decline of 44% year-on-year to $147.5 million.

* Tencent Holdings Ltd's (OTC:TCEHY) plan to take Sogou private, and reduced traffic acquisition activity led to the decline akin to Q1.

* Search, and search-related revenues decreased 43% Y/Y to $137.2 million, led by lower auction-based pay-for-click services.

* Non-GAAP gross margin expanded 400 bps to 29% as costs reduced 47% Y/Y due to lower traffic acquisition costs.

* Non-GAAP operating margin loss was (23)%.

* Non-GAAP earnings per ADS of $0.11, and GAAP income per ADS was $0.10.

* Sogou held $1 billion in cash and equivalents.

* Price action: SOGO shares closed lower by 0.11% at $8.78 on Friday.