Sohu.com Limited (SOHU) 7 Aug 232023 Q2 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and good evening. Thank you for joining Sohu's Second Quarter 2023 Earnings Conference Call. [Operator Instructions]. After management's prepared remarks, there will be a question-and-answer session. Today's conference call is being recorded.

objections, disconnect any this have you you at may time. If

go to turn Relations for Please the now your Director conference Sohu. Investor I'll Pu, over host Huang today's of ahead. call,

joining us operator. XXXX you Thanks, to results. Thank Sohu's second discuss quarter for

call us Chief Executive are Yaobin Dewen and are Joanna Changyou’s Zhang; Officer, James Finance, Wang. and President CEO, Vice CEO, and of Chairman Deng. the Charles CFO, On Lv; Also, with Chen;

of would Before for harbor on the forward-looking management based herein, current are you their on to begins contain today's the Except call These discussed this contained safe I in call. like plans, with remarks, information connection the estimates, statement matters statements projections. statements. may remind prepared conference historical and

not undue place them. on should release Therefore, you

We to from differ factors that and involve number a statements statements. important materially results risks inherent forward-looking could Forward-looking actual any caution you cause containing uncertainties. those of

risks with Commission. to the refer and about please information most the XX-F. including Securities more the on recent annual potential For Form uncertainties, report filings and company's the Exchange

Zhang. With Charles call now the proceed. please over turn to I'll that, Charles,

of the expectations. Thanks, and performance quarter enhanced the offering both line delivered of we content technology by through our for and reliable stable you, stream the At real-time. our users continuous bottom Sohu and experience our Media, second and call. user XXXX, revenues meeting thank Huang joining a to products Pu, In with everyone, we steady refinements

advanced again with technology users. also dollars. and line strategy, campaigns, Online Sohu and expanded remained and and video attracted marketing generating us improved hosted a explore steady, our games opportunities short-form more Sohu And premium we Leveraging their prior content in content in proactively, Video, which abundant to position revenues innovative advertising this monetization execution put generated long events more live of flagship and In guidance. our content portfolio Twin broadcasting consistent metrics, our our we with product traditional of and Engine distribution.

me let a you of financial first overview the performance. quick give Now

down quarter revenues, down XX% second quarter-over-quarter. the million, advertising quarter-over-quarter. X% year-over-year revenues, X% and down $XXX Online up game million, million, year-over-year For year-over-year X% and and X% quarter-over-quarter. of Brand XXXX, $XXX revenues, XX% total $XX

Limited with income GAAP of $XX million of million last net the was first XXXX. the first attributable the loss a and $XX income million loss Non-GAAP net Sohu.com year second of Limited was million in of compared in quarter to a attributable the year net second $X of a $XX of net and Sohu.com quarter loss million $XX this $XX in compared of year. in of loss to net with quarter last million net the quarter

go businesses key through more detail. Now our I'll in

further we First, cutting-edge the and Portal, integrating and premium the We Media various content forms Sohu focus into technology and to Video. enhanced Media continue At algorithm. by presentation. product optimizing our refining Portal products experience user our on Sohu expanding of and

media we continuous Thanks our of Video, execute to strategy. Twin our and strengthened and our dedication At influence rich we Sohu to media mainstream as a continue resources, Engine integration platform. advantage

scene crime of [ph] the idle CaoYouning. released Replica we content, romance, video long-form For Love starring,

have Summer further Me is of social expanded attracted created discussions like, shows the on sixth engaging Germany At of High millions media [ph], online widespread is several launched lot [Indiscernible]. quarter, across season our Way Friends, the we These During realities and a base. The platforms. and viewers time, same this and Home of popularity which the various audience our shows

each other popular. content which content attracting social is kept to promoted becoming knowledge with we physics content and users distribution, live our its we short-form on generation by Charles video physics science-related further class, broadcasters. on of concentrating live platform. And produce and distinct high-quality IP terms Driven more very our streaming, In and of and interact class,

of On we and and the our advanced their boosted due monitor the and live potential marketing cater offline Sohu platform leveraging trends market Video. online diversified and and that unique opportunities, dual broadcasting technology modern Media transition provided with to strategies Sohu advertisers advertising needs and side, closely dollars. explore We

second the content positive social quarter Zheng Sohu traditional as as this XXth In and demonstrating News event, marketing year, the the of Chinese Marathon, culture hosted values. well we upward reinvigoration of Shuang, the traditional Sohu's popularity

using We our innovative developed ideas broadcasting events technology. expanded application also integrating monetization opportunities into by advanced new proactively diversified and live scenarios

Stairs These of activities premium Charles the advertisers. into the Sohu this generated Tech obtained content integrated IP Talk [ph] of and Physics into expanding called have Class [Indiscernible]. and recognition events further series Conference other We Guy, Under new abundance a an from

to the business. online turning game Next,

XXXX, game quarter line of the make game players' game investments with development second more for pack we anniversary guidance. PC an Within event business, our optimized in the social to player-versus-player expansion demand the TLBB -- were satisfy regular of Vantage. prior limited-time of traditional relation the mobile character our in-game and of for During online we combat. business, revenues TLBB system the Mobile also Legacy improved TLBB our launched for PC the for to system additional with addition worthwhile In

along the -- for launch games maintain updates content Next quarter, we next-generation expansion expansion our engagement. TLBB other to and packs TLBB will updates product, Mobile, and with with player other packs new for along content

order our industry innovation high-quality advances diversified, in strategy, mobile allocating for more out game technology resources talent and more intend ideas, research to to to rapidly development step more we as games. and Nowadays, professional as roll and becomes well market top demand and development as game generate our technology to the in deeper content

core games. games our card-based various including producing while -- we game will other casual terms types, in also maintain game of sports competitiveness the RPGs, and In pipeline, MMORPGs

our Joanna, through Now our let's turn walk over you the Joanna? call to who financials. CFO, will

non-GAAP are now Thank you, segments the through a basis. quarter walk financials All will our key on major second for the you XXXX. for Charles. I the of numbers

on non-GAAP a find reconciliation our measures may website. You to GAAP of IR

of of $XX $XX revenue million the quarter with were with in loss year. same same Portal, loss operating was For compared $XX year. compared million quarterly million in last The the $XX an quarter quarterly last operating million Sohu Media revenues

Video, quarterly million, quarter $XX Sohu revenues year. same last with For $XX compared million revenues the in of were

Quarterly million of quarter was in the compared $XX loss loss operating operating year. $XX same an million last with

For operating Changyou last with million $XX operating for with -- was same Changyou's online million in of Quarterly in million compared and revenue the of the year. business game same quarterly compared profit year. $XX $XXX million. an profit revenues $XXX quarter quarter last XXXXX,

annual $XX $XX to million; $XXX to sequential of Sohu.com decrease net near sequential decrease between attributable revenues only million million $XXX and For million, revenues XX%; X% $XX game be decrease X% third quarter online a this of and advertising from $XX game and This loss net to of XX% XX% of $XX XX% Sohu.com expect to a [ph] and X% million and near Limited decrease XXXX, to be of between million. to be million between X%; and impacts we to and implies attributable business, $XX be to loss million. to non-GAAP GAAP between to Limited annual

uncertainty. is and preliminary our reflects to substantial subject which current guidance view, Our

which excludes please is be of the projections for game, the that Also, Mobile XXXX. quarter TLBB guidance third above in scheduled the noticed to launch new

quarter revenue believes conservative to that approach game third take is game it Given company the launched, a for the not that is the with guidance. remain yet Therefore, appropriate the projections uncertain.

remarks. our now Operator, concludes the This like would for call prepared questions. open we to

[Operator Instructions].

Our of the Thomas. Chong first Jefferies. line question, from from ask question comes Thomas your Please

of When have high. first. question chance look currency, seems I that Hi, good QX questions. on guidance the end seems range by positive the high the we to my there's advertising a I seems low I the the foreign evening. If impact end exclude would Thanks, growth. a taking sequential guidance, is have try and it management exchange into that looking the quite local for into that it a the

how just the sentiment like so to advertising So trend you. in seeing different June advertising Internet across ask services. and versus about are think and of should we far, we Thank about auto, the management month how July categories wanted FMCG, the

growth? sequential for sequential that Is growth said you QX? So, a

the the range. guidance, coming QX,

in So, kind right? of Some terms growth. RMB, of

Yes.

for overall, back -- bouncing market not So revenue second so the the expected. not advertising the is is quarter, as overall whole

not with compared of holding steady X%. a expected. we in RMB, a have we because, terms it's QX still normal QX. bounce in economy, of the said, right, revenue better dropped, back are the still as why right, But But normally, year, that's So because a QX is Normally, situation. X% I last the growth for economic sluggish

QX. We are for a downward revenue forecasting

is basically of And yes, doesn't broadcasting, our our overall, to advertisers, it's in our no, exist the and so -- we're script, the I in anymore. because revenue and innovative of said live But marketing terms because estate the as real solutions the categories, just events. holding it innovative -- up

Internet And service, XX%; so, XX%. XX%; our top FMCG, advertisers: auto,

more not much same buying With people even doing now because same auto, -- not the spending online. well, And marketing thing, of did campaigns, the service it's hesitant it's are seems as less because our in automakers economy. not because overall spending with Internet they well as are less, and big the

our little a revenue. seems it's but still with FMCG smaller percentage a So -- overall of bit it's okay,

that's the the your that's Did question, I Thomas? of -- overall kind So picture. answer

our in about strategies a LLM? benefit AIGC you, details. how want the to have area? I Charles, industry the Thank about for just thank and the follow-up And can thoughts spending what this and you. management's future. I Yes, Sohu are May quick seek in AIGC

We and It's a very -- technological revolutionized important. formally, search it's a It believe -- is that it's AIGC way advancement. major engine. the

important for media delivering totally very providers a way information it's so it's of Sohu. especially different and opportunity, or Now a information -- like

the not we data big So, large model, model, are large in model. investing

to a outsource -- and providers, before probably social we article, consumer example, are -- us. like services redeveloped -- some are applications now in our we -- and amount network. will third-party Like Sohu machine-generated… providers use Sohu have each News services and those for -- the We to service and we But of then large

Abstract.

What? Abstract, exactly. also, some of Yes, AIGC. Abstract. using products our actually And

a turn are and attractive and turn side we're new monitoring into its we user products, real to closely those applications into to developments -- a development yes. be of heavy it user the AIGC, consumer and So, going also

question comes from next Please Our Citi. from go ahead Alicia Yap Alicia.

three I questions. have

up the on -- Charles. I on wanted to Thomas questions the previous follow advertising, First,

little bit So, you can than sluggish it mentioned you weaker expected. is bit back a was and elaborate little bouncing a --

to that had you is Or expect question also the you a actually worse months the worse previously on first rest like So, into year? Internally, than and has is than next the expected? follow-up. of continue this the situation just do this the advertising, few So, what expected? is everybody

after lockdown, And everyone that we're remember then last the probably three of we it's you bounce the call, in and note stronger seeing -- have just bounce year, throughout call we back seeing we everyone I economy. QX, not not after just think of of quarter the QX, expected probably did strong the like back we seeing like that middle a -- years in quarter. the seem -- -- But like nothing. phone COVID actually -- everyone to -- everyone is now are conference

sluggish. pretty So

I overall getting macro sentiment understood. of reason events, Would of well? events attribute because as the of maybe to natural the worse happened flooding, kind the is some of that also kind or also The like the softer amplify of you some natural like magnitude?

I so less income. happened. not then are not no money disposable don't people those buying sales enough It's the the buying nothing have and People because people export have does know, -- products, the the with the have you -- not situation, to or flooding, to I overall of things, just not disposable -- people -- macroeconomic those there's are products. but income flooding the don't having things then do export, the think buy if

opportunity, Those and stop companies job hiring then job no opportunities.

more In a spending buying down, pessimistic terms if or companies Then company -- people a have like think right, entire Sohu, like because -- in But cars large probably I buy downward. trend. it's I I'm little negative cash, still and are to It's buying item a our of cash So, of still they that spiral houses. not spending things. terms not

monthly So, like games, subscription of our drama video consuming and -- just the social the games, playing networks. the or playing subscription online membership

of item largest. side items some advertisers the economy and come of And is declining the then -- so -- probably FMCG China's is still the large consumers kind if consumers the spending little then and the population number some a are up could and small pretty bit, because large is -- auto still

So, I'm of optimistic. still kind

of this grow So -- that our actually we take at that's why more we and investing to economic cash-rich we spend the are so networks can base. information our actually, and social user and continue also it we social develop to we to we have downtime, advantage are delivery network are -- --

So, our grow it's a good use time to base.

Okay.

ask second I gaming. to The wanted question is

You just items. mentioned on the small

TLBB understand guidance I think in hasn't baked I your launch. So, the new

Just that the anything Is of seen brings gamers forward you in title it that attract helpful. the expectations launch, you terms game it share for something be looking could -- again? it you of a that potentially, guys gaming business your can guys also that for going back for any much to that potentially some expectation. are very long in the time looking would that and haven't growth you the actually a So, be you can that share you're

share. and Well, Chen can you Dewen, go

now China registration launch before is The by developed team Tencent. prepared game in a research published the development And being is phase. its and Yes. by

is Tencent charge because process. the So, of in

monetization in cannot the gaming the But for the June and and phase. our did results performance. prior mid-to-long-term just any projections for testing sure, we we test expectations with testing So, for met do

be didn't to just So, our put we guidance. conservative, into it

use Okay. also then any a thinking us For any the the regular policy? also shareholder policy can the thoughts share new example, cash lastly, you. and program? or about And dividend Charles, buyback views any Thank update upcoming share with or on return you

buyback we dividend Well, plans. we have plan or now, don't for right -- currently, any

yes, We applications, social are And for working we'll the our our will and to huge battlefield growing base. side. still the we acquisition, do on the our need have and develop task user to a stage the to last years new the -- it of in And few user side, been refine network especially of into user enter Sohu we've stage net acquisition major that. on a products that fund

So, investment. have our to -- be to don't the have use user base. much develop plans be We -- of to currently don't cash continue other any will

management. Charles. thank you, Okay, Thank you,

Instructions]. [Operator further no There questions. are

So, you participating. for Thank with that, conference call. we conclude today's

may disconnect. You now