- Earnings call transcript Q3 2022

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Operator

Ladies and gentlemen, thank you for standing by, and good evening. Thank you for joining Sohu's Third Quarter 2022 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. Sohu. of Director Relations Investor Please go ahead.

Huang Pu

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

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

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

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

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

Charles Zhang

solid severe environment. Huang. capabilities. from uncertainties our everyone, to And thank faced our of pandemic Thanks monetization our efficiency joining online In performance COVID-XX focus and third Despite our strict products, macroeconomic these, you, refining quarter we XXXX, in enhancing on we've for the the and of game budget business. operating and Thank call. you, headwinds maintained control improving

well quarter Our bottom-line performance for above expectations. was the

and user For Sohu continuous technology. Portal, experience improvements through products enhanced we Media in

and content in we Sohu of guidance. knowledge-based a but Sohu live differentiated the Engine Twin execute and about improve live of and events. businesses Video, and quick Portal of each our financial ways continue Media exceeding the broadcasting a prior these our broadcasting science moment, we Leveraging during first, advanced Sohu with For performed to Sohu explore well Online Video. to matrix, developing our continued with go both for to into performance. product I'll the quarter compelling our technology advantages Games revenues monetization details strategy, overview

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

through our key of go I'll Now some businesses.

First, Media Portal Video. Sohu and

For focused our we Sohu of optimizing refinement and product Video on Portal, consistently algorithms.

working are further to large we a position news and actively premium content. consolidate media and products. We strategy, to were tightly working of enrich amounts continuously user Working have users strengthen also enhancing new reliable within this kept our real-time facilitating platform. We're as engaged We our able in and integrate experience. features experience users' by mainstream

knowledge-based science the distribution social and strategy, we our credible, promoted live leveraging generation Video, the and our leading strengthened of platform. our We Engine Twin broadcasting a technology to and actively premium content. reputation execute as high-quality content. our We live Sohu For advanced continued broadcasting

variety for leading have example, fields class, myself, audiences, attracted of also In from the influential of wide in millions into et with nature-related the drawn During launch and we only producing Physics of a besides a cetera, of our long-form plenty science-related and series attention quarter, but Despite of content, scientific content not continue We unique reality Charles' platform. our to and professional broadcasting, monetization negative acquired opportunities to to live explore advertising integrated the new program COVID-XX technology uncertainties applications we those marketing high-quality dramas capture TD of complement cost-effective content original shows impact activities. extended in ongoing budgets. on market, and the areas of into imposed various broadcasting library. the and advanced broadcasters

continued successfully Sohu at campaign During the and News hosted content XXth Marathon. marketing the [inaudible] breakthroughs quarter, of spreading These and widely the degrees north activities we top to XX make unique wide meet across value dollars. social media. their of the Through such were demand budget advertisers platforms of range and of the attracting media the to and these advertising we able demonstrating events, end

game online to turning Next, business.

the events quarter we relative game, by our the keep TLBB for for In versus and group weekly online players. mobile some new PC business which line legacy environment revenues to game XXXX, TLBB rolled games, for was plans. Vintage, of players. goals dungeon third regular With mobile adjusted TLBB received game player During of skill some introduced the performed we a PC, PvE, introduced we well new out fresh theme With summer strength well. for

top technology, keep the of engaged, mobile professional Legacy more strategy games. innovation as talent environment, and TLBB will by for an roll games. mobile of rolling as to development game will players PC, high-quality and other quarter, content we we Against out the ever-changing well TLBB Next content promoting out to in stick backdrop new our

our in In idle RPGs and competitiveness terms types, pipeline, in car sports RPGs multiple the of including game games will of games. and invest FFO, also while core maintaining

the our CFO, turn Joanna? to Joanna, I'll call walk our through will who you results. Now financial

Joanna Lv

GAAP of quarter through XXXX. a non-GAAP numbers the a the on will I to now All of website. basis, find segments our may reconciliation measures of you major non-GAAP Thank third for you, you our IR financials key Charles. on walk

quarter-over-quarter. an $XX quarterly of million, XX% with loss The Portal, compared Media Sohu million X% same For loss quarterly revenues the $XX last operating quarter year. down was in year-over-year million, operating and $XX were

compared down loss operating million and year. of million, last year-over-year was operating XX% were up with X% $XX $XX an quarterly The $XX same quarterly revenues quarter in For Sohu quarter-over-quarter. Video, the million, loss

was X% XX% $XX The quarterly last quarter online same quarter-over-quarter. in quarterly operating revenues game compared million Changyou's the of and year. million, For an and profit $XX profit business with $XXX million, operating XX,XXX, year-over-year down

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

Operator

question Instructions] of Chong First is Thomas line from of the [Operator Jefferies.

Thomas Chong

evening, good Hi, management. questions. my taking Thanks for

question of should the macro and trends also we the cetera, is about auto, the advertising outlook I Given wanted across headwinds that we advertising how Charles, properties, categories, different some seen can business. in about about et just from the think my how like get have think XXXX? gaming FMCG, second we to share and And pandemic, about also the should you color the outbreak

our Given should the games we should far year? seen in October new we Changyou, haven't about China in about that [inaudible] how so in approval trend think we and how in release November, pipeline think next on the for gaming and

Charles Zhang

Okay.

Auto trend think is we right, QX QX of not doing So QX, QX season, is as of better. good the general I The QX so services, QX. Real fine. sectors. better low advertising relatively among a bad. downward. at because think XXX as and is logging. is of in have FMCG Internet relatively estate and auto is doing really least QX, market the onwards them, ranking is -- seems doing QX -- for is That's kind I in The But is kind [inaudible]

right? question about next Your is game,

Yaobin Wang

waiting the have that further of license projects but couple a approval, about have news are We no that. for we

game fit So are have we of domestic of and rest the the our half XX Currently, and in games for market waiting. pipeline, market. global them are are we than for them just more

Charles Zhang

downward said the I just trend, as we -- to marketing -- advertising the we we draw were a advertisers. mean this by -- our some I -- actually marketing marketing that unique were activity event, little to better event bit able activities unique activities,

Operator

from comes line Leung Bank question the of Our of Eddie of next America.

Eddie Leung

recent XX know trend. thanks. on seen November? is follow-up we I early Can the more you there September, what and Could been have Hey, October The ask all near-term the have a you in have lockdowns reason we in advertising months. describe

wondering of how the use my the to we very evolving couple So strong months? of just see on trend continue see in secondly, have you So question. a -- first how that's balance. cash, past cash And then you

So if buyback any dividend? share we expect wondering or even program more should a

Charles Zhang

Yes.

on income I think advertising expect the rely our a -- negative because impact advertising. companies have over brand we lockdown did mostly

events to especially companies, previously those scheduled held. not So be their kinds large marketing corporations, -- things able are of events and

does spending some I their mentioned, that doing need people not live are other broadcasting person. why bad because to class of in like have actually events our not and knowledge-based or we online so just that's on So that events But platform. streaming, there impacted Physics are kind meet science nature-based, we

So advertising that's little we -- the some -- of just dollars. their a back bit get

Eddie Leung

cash? And use of

Charles Zhang

the in after a reported, cash, back we a do. see of So buyback, of have uncertainties, uncertainties things it. to of economic hold also, -- wait we we Use just completed the And we $XXX we -- already, yes, because with hold -- economic view -- to million macroeconomic have completed further our uncertainties because as we we buyback back right? lot of the

do our of our our improving -- lot We a for term have things in -- long user the in so we and to spend have base money. we developing future, place products,

Operator

Yap Next, from we Citi. have Alicia the question from

Alicis Yap

and for couple Charles do have question. evening, a questions. taking Thanks my management. I Good thanks. Hi, of

a fourth guidance. that. will soft some if there revenue elaborate actually path correctly, the heard seems quarter on Can little for a all mentioned gaming It quite PC the update be of it is decline. Charles TLBB expansion First gaming bit the I sequential management the online thought big and reasons guidance. I

discrepancy guidance. the the of wondering games content versus kind update the on just So

Secondly, also gaming. to related the

share Just monetization weakness. view, in general, management has the latest by can been macro industry gaming your if affected

the have gaming? the do COVID think you soft the and the on or or negatively impacted spend time you have gamers' macro So revenues lockdown seen gaming

Charles Zhang

as much your and situation, macroeconomic the more people One is not spend have more are Yes. yes, question, before. so stay will To spending less game. time have last time willing conflicting people to But people play as that answer it's home factors. to money,

it's now. why monetization that's effect is it's So actually a -- negative the -- overall

Yaobin Wang

was decline due as the partly primarily as exchange our our natural of negative TLBB the other rate. of the That to and of due sales impact to well games decline for franchise some --

Alicis Yap

Thank follow-up one see. on Can advertising. I I you. the have brand

well can as So Are into that confident you comment if or as guidance sentiment the regarding more next XQ of your provide confident ad less thoughts management the about recovery for the you into pace year? XXXX.

Charles Zhang

our our confident light growing these Well, and It's have very companies and events base not because platform, broadcasting we marketing of also things. unique our unique. kinds also is Other activities. user do our are

all it are it the depends. future So right? really situation confident, the the COVID-XX policy, but and if also economic depends -- -- So on overall we

we the So average. if overall the really we'll is confident are COVID on doing depends well. well, do the it lockdown... better very and the But -- than do economy We'll policy that

Alicis Yap

-- just see. then And I

share the on buyback. lastly, Just

you still recover you your business that bit a little consider wanted because mentioned doing right? then advertising the level, around Is think recover you this you also aggressive more weakness, let's share buyback? spending your and to given money, gaming cautious the if what so macro But price of if mean? I macro well, would say, on be

Charles Zhang

Well, we'll not exclude that possibility.

Alicis Yap

Thank Thank today's Thank participation. for conference for question. That Okay. you All concludes the call. you, you Charles. management. you, Thank right. your

now disconnect. may You

Sohu.com Limited (SOHU) 15 Nov 222022 Q3 Earnings call transcript