Sohu.com Limited (SOHU) 20 May 242024 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by, and good evening. Thank you for joining Sohu's First Quarter 2024 Earnings Conference Call. [Operator Instructions] Today's conference call is being recorded.

If you have any objections, you may disconnect at this time. I would now like to turn the conference over to your host for today's conference call, Huang Pu, Investor Relations Director of Sohu. Please go ahead.

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

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

discussed to herein, for statement current this management with in are on on Before like today's their the the the them. forward-looking of conference statements should projections, reliance remarks, prepared place you begins Except not historical plans, and connection contained information company's matters would call. contain undue These may I remind safe and call you estimates harbor therefore, statements. on based

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

potential Form please please Exchange Securities information and over on report proceed. the more to For Charles including now will to the Commission, risks the with Dr. company's Charles, and the Zhang. turn the XX-F. With I about call that, annual filings recent uncertainties, refer most

was Huang line and and performance Thanks, seasonality. our for first performance quarter our you, joining with of guidance Pu, XXXX, everyone, the our line top bottom In impact of call. expectations our our thank line despite the exceeded in

us in with content and and stimulate platforms, Media differentiated and with to interaction and and We delivered algorithms. to optimizing proactively opportunities. not leveraging products continue consumption stimulated user which enhance but gain and content line users' well Online monetization on our integrated we distribution. performance various games refining resources provision expectations. Meanwhile, events Sohu our For product stable IPs more our by Sohu campaigns, advantages, Video, to host and also we help only experience unique our matrix social continue generation,

in quick performance. overview let give of more Before business me going detail, first financial our through unit each you a

in down game with quarter-over-quarter. million, and quarter-over-quarter. down Sohu.com X% compared $XX Brand were $XX down first quarter million XX% total year-over-year Limited and of million, million a compared of quarter-over-quarter. GAAP in $XX first $XXX of the XXXX, of XX% For XXXX. million, net quarter to advertising loss net loss Online of year-over-year quarter revenues revenues, in revenues net was was million attributable last million the loss X% $XXX $XX loss Limited $XX XXXX Sohu.com year of net fourth fourth and a of a net attributable last first and the loss loss the with of to the million, year-over-year up $XX quarter million year. Non-GAAP X% in were $XX a and XX% quarter of

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

First, and Sohu Sohu Media Video.

deeply and the and distribute content We We resulted experience This continue enhance products, integrated platforms the user Sohu simultaneously. refine greater upgrade to during operations to distribution. We in algorithms, premium apps our a users across verticals. substantial in the allow variety of consumption quarter. [ to and Sohu clubs campaigns held Video News our ] to improve content high-quality offline a to product of various content generate in addition which turn even both drove and continue matrix, online entries of

and on share their our and Convention in perspectives person influencers Spring interact users came further quarter, of especially XXXX in event further [indiscernible] other. we result, among the and video where In a Video broadcasters This verticals event metrics hosted and each have with off-line our the interactions to overall vitality engagement, to different platform. enthusiasm ecosystem, successfully increased. interactions improve generation. We user the fueled Sohu As steadily together various young and broadcasters' this live user hosted in events social

and discussions fans across attracted hosted which XXXX traditional and we content Chinese events of handful, social noteworthy quarter, which of recognition. several launched our culture the related distributions and to of generating participate events, Sohu a promoting and a platforms. Besides, and also in we media Video traction KeyPOP Class, this gained Master large During fascinating KeyPOP also various lot widespread Chinese lots number customs, KeyPOP

have We exploring building IPs monetization field in on focused opportunities. consistently broadcasting of live and our knowledge, the kept unique innovated

Electronics time, example, our the International monetization Beijing further increasing integrated Physics years needs To brand cater understanding the of gain to Consumer Expo to capabilities. new Charles' the Appliance value For is the for and influence which of China X the advertisers, getting the offer. in class the highlighted 'XX monetization while we as only Home unique Exhibition, also expanded of outcomes, a XXXX audiences but Class, achieve not helped marketing they physics myself product better Automobile live Shanghai. This at last into and allowed to also same approach we adopted exhibition deeper our we a advertisers

differentiated forward, the advertisers marketing solutions product for matrix provide we to budgets. advertising and Going Sohu continue will drive to advantages leverage of

turning game online Next, to business.

around revenues online for During the our as out quarter, and promotional were PC willingness TLBB regular we which [TV] ad pay. holiday line with Year play New Day rolled to expectations. Valentine our Chinese events business, events in not increased games well Winning players' to game as

simulation skills pack among an upgraded stabilizing. In games Mobile business, to popular expansion TLBB addition plan, celebrate resulted Legacy to and Chinese events, was in In for to play of holiday engagement mobile the which each players. user we optimize the New which continue for game quite vantage our Year launched we fully TLBB

launch players packs updates content keep Next and quarter, we the other TLBB and will for the series to expansion engaged. titles

Its Chinese card-based is May the in we our RPG XX in month. launched games, with current For a expectations. line this on performance Mainland New licensed Westward Journey new

MMORPGs high-quality demand to to market. We'll continue rapidly in well developing for core becomes deeper as needs, talent game games more creatively going maintain expand better markets in the the our top technology to and forward. meet content As market bring we gaming ways invest to portfolio advances diversified innovation our our and new professional as technology development explore more and and competitiveness international will strategy, in and order players'

games including producing also casual are types et We and games, sports multiple of cetera. RPGs, card-based games,

like would to update program. ongoing on an share update -- I on give the Now repurchase an give

As now of I an repurchased that, Sohu May the $XX for call to approximately turn will X.X million million. our ADS With cost aggregate had XXXX, XX, of Joanna, CFO.

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

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

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

in same For and revenue operating quarter the [indiscernible], year. Quarterly Changyou's quarterly $XX $XXX year. last the online was profit game million, revenues with last with $XXX business million the flat quarter of compared same million

second and XXXX, and be $XX to to advertising game brand to million. XX% quarter increase of of between to XX%. to of revenues a of million sequential XX% decrease a million $XX XX% sequential $XXX be expect annual For XX% This annual increase revenue we This million. implies implies $XXX an increase XX% Online XX% and million. the the net to and management's remarks. uncertainty. This is of Limited and Sohu.com questions. and Limited between would we open to preliminary forecast XX%. Non-GAAP attributable be current to to view, Sohu.com substantial million subject attributable loss and This now loss and to be reflects Operator, like call $XX to to $XX GAAP our concludes Sohu's net which $XX $XX million between million to prepared between the

Jefferies. Chong first from Our Thomas comes from question Instructions] [Operator

we is Or from third strategy. question online game growth our is game And license positive QX. my will year-on-year first then my contribution in In break QX. first for? can question about be particular, is How then QX new we the about allocation second Should segment license coming out My our advertising think in is mainly second should that's the question. And advertising more all growth my the our we back from our assume expect have we paid a about impact common Should actually in capital sequential advertising in that question about quarters? business. And our half? to guidance game? we

I about XX amount think that mentioned USD that we Charles million. aggregate you the also repurchase is

regard in in Should assume repurchase about much any some our we the will that share color how used XXX get to with time? million the share remainder plan. up we to should do program think the Or of fully wanted Just full we year about should repurchase X color year? be years'

and Well, question answer me we have we've bought okay? third we volume the because buy. million, that $XX million daily $XXX of So let can been first, your

plan to all takes So I $XXX X the years. finish buyback probably mean million is -- our and finish

daily -- volume So so -- trading. and by volume limited daily

kind still the situation of a on question first well, the macroeconomic so advertising, think of lot is the -- I with And uncertainty.

QX, in advertisers -- some cautious. in yes, there's so spending and economy but strong not recovery So sectors of are very kind certain

we able to scale about in -- there's we user -- achieved Then because achieve online sequential we we whether have growth. kind have compared It up of is growth yes. develop have all about leverage. our base. increase. Yes. the do continue do gaming terms the -- we our advertising base QX, I'm so question for we in increase But or not still on year, That's of with second a with user when XXXX, to advertising time compared So we sure last Yes, that need to QX. brand and decrease, depends a are we can Q-o-Q a

[Foreign Language]

we revenue Fly The from IP and Korea is and South New second. I that which of Japan in March Journey end be I launched some at we of of XXth sequential And May will Westward -- Chinese High, in same from the increase in think mainly there at also older our the launched decrease Thomas, our missed games. there time, the Mainland. are in some the

Yes.

capital, fight our right, of cash products we need buyback, our the besides and develop level have to -- still to market allocation the to to products. So we will the better,

Yap Our from of comes Citi. line Alicia question next from the

I have couple follow up. a of questions

So one is the the number on guidance. follow-up

the however, sequential just profit follow-up than you increase gaming to I us should is the I revenue gaming on given overall that net expense quarter? So the any guidance. with profitability sure your is the I wanted the got on and loss from think make the can great. a the But And if wider and color delivered and it group gaming XQ side, understand share be in high-margin would actually buyback. support correct. is business, I you for profitable guidance why questions sequential first in So growth

last and $XX that of of think end million. about now quarter, mentioned February back the I you you February So -- bought you million $XX have as

transfer money over of because Or the is just kind So X like daily is or the months there Is about it anything that any on is you executed the And money? restrictions the last the there like million volume true on or limitation? actually that $X that is of out moving so? that?

to Just all, -- to just think like them we back it's -- over out but of daily the right, limit. daily the buy million question, the $XXX because volume can't the last carry buyback, I limit. We'd buy

yes, last that The we right? think calculation million to X Yes, that early are so right? million future, I trying $X more, this as possible. finish volume to that right, buy back, as the we is $XXX months, in we improve So we hope can so your the bought will --

the to right? QX, As

lower Because spend we for new on loss Changyou's the QX game. than of more is in because expense QX guidance marketing net is

Yes.

see. I

or nothing for the Video promotion, game but like only it's a the the step-up on Media business? So for

TV few QX, the that already drama, right? spent We a already -- Yes. in right, money spent,

in spending. side So media no increase

see. I

Okay. treat to also on I follow Helpful. question Maybe last in can up.

a improvement little bit recovery in -- but certain think, little a macro second while bit quarter? you did in second quarter. of the the kind you which or a I you bit see industry actually share that see you sector us with some the vertical in uncertain, vertical remain mentioned Charles, Can little

-- but I think before, competition, very I to beverage And electric people with they're people getting and than competition the the very, overall, FMCG and intensified and yes, are of industry, spending because mean, right? much The although is forced some some money, advertising there is vehicle, and is better electric auto also food spending in industry. is very still cautious. car the still are spend less still vehicle

estate especially Maybe recent from in policy -- see. second will advertiser in improving Do follow-up government just a be sentiment side. the measure the quick think I you real with the half? maybe overall from on positive

any not in -- not real -- nothing with real well industry, is I people estate does think think improved. It not recent does the -- that -- policies will is be consumers that right, about has other, do particular but to about estate that the estate. income reflect right? real don't the And -- I

will not consumer -- will not increase. spending be -- spending So

they it consumers lot coming willingness on -- seems spending, that's not they're business back becoming little do is but not overall are spending traveling. bit. as a when strong. So But spending is -- Travel a

the the will product things, means people then that will than not expect company's -- sales you So products not buying not when -- advertising. are

positive it's does direct. policies advertising not impact, a the direct impact So market. The not recent have on

showing Thank questions. no very for you And conference conclude of call. your I'm with you for further that, today's much all Thank we Well, participating. questions.

disconnect. now may You

Okay. you. Thank