Q1 2022 Sohu.com Ltd Earnings Call
Ladies and gentlemen, thank you for standing by and good evening. Thank you for joining <unk> first quarter 2022 earnings conference call. At this time all participants are in listen only mode. After management's prepared remarks, there will be the question and answer session. Today's conference call is being recorded.
You have any objections you may disconnect at any time.
Like to turn the conference over to our hosts for today's conference call One pool Investor Relations director of Sohu. Please go ahead.
Thanks, operator, thank you for joining us to these her social so who's first quarter 2022 adult on the call are chairman and Chief Executive Officer, Dr. Charles Zhang CFO , Joanna Lv and Vice President of Finance James Don also gives us a Chinese C O dimension honesty actually all being wrong.
Before management begins their prepared remarks, I would like to remind you of the Companys Safe Harbor statement in connection with today's conference call.
That's for the historical information contained herein the matters discussed on this call may contain 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 containing any forward looking statements.
For more information about the potential risks and uncertainties.
Core to the company's filings with the Securities and Exchange Commission, including the most recent annual report on form 20-F.
That.
I will now turn the call over to Dr. Charles Zhang Charles Please proceed.
Thanks.
Thank you everyone for joining our call.
First quarter of 2022, despite the negative impact of <unk>.
19, and the challenging macroeconomic environment.
Focus on product requirements and improving operational efficiency.
Thanks to the excellent performance of our online game business, we delivered better than expected bottom line performance.
And achieved profitability for the quarter.
Yes.
For Sohu media portal, we carried out product upgrades and improvements in the overall quality of our news and content all of which continued to draw users to our platform and keep them engaged.
For Sohu video.
Continued execution of our twin engine strategy.
We're actively extended our live broadcasting to agree.
Scientific field.
We're also focused on user acquisition for our key mobile products and explore ways to improve monetization for Sohu media portal and so with video.
For Changyou online games performed well during the quarter.
With revenue.
Hitting the high end of our prior guidance.
I'll go into details about each of these businesses in a moment, but first let me look at let us look at.
Review.
The review of our financial performance.
For the first quarter of 2022.
Total revenues were $193 million.
Down, 13% year over year and flat quarter over quarter.
Brad.
Brand advertising revenues.
$24 million.
Down, 23% year over year, and 29% quarter over quarter.
Online game revenues.
$158 million.
Ah down 11% year over year, and up 10% quarter over quarter.
GAAP net income attributable to <unk> Dot Com limited.
$3 million.
Compared with $32 million in the first quarter of 2021, and a $4 million in the fourth quarter of 2021.
non-GAAP net income attributable to <unk> Dot Com limited was $9 million.
Compared with $37 million.
In the first quarter of 2021 and $200000.
In the fourth quarter of 2021.
Yes.
I'll, let I'll go through some of our key businesses.
First media portal and Sohu video for.
For Sohu media portal in order to strengthen our visibility and influence.
As a mainstream media platform, we provided real time, breaking news and social topics to users as.
Well as optimizing algorithms and adding features.
Provide better user experience.
In Adp's user engagement and enhanced social distribution.
For Sohu video will continue to execute our tenant strength twin engine strategy.
The product differentiation and competitive advantages of our live broadcasting.
Enabled us to extend its scope for example, late 2021, we launched.
Trump Trump's physics class I open and start teaching.
Physics online live broadcasting.
In late 2021, now has already more than 40 online episodes since the initial launch.
This marks this year. We've also introduced the offline classes as well with open live broadcasting.
Young audience, we're enthusiastic in the generated robust online conversations the recognition gives us.
Given two this is supported by our advanced library constant technologies attracted broadcasters in a variety of scientific field, ranging from physics, mathematics, chemistry, and aerospace et cetera.
Our platform to engage in scientific live broadcasting.
As a result, we have built a solid and incredible reputation as a library platform.
In the field of science and business knowledge and knowledge based platform.
We will continue to explore innovative ways to create and distribute high.
High quality content.
We also had some new wins with our new one product production house and.
Four episodes and reality shows four original original dramas. Following the successful broadcast of mysterious lob cover and you're going to go back this quarter, we started shooting.
Let me series two and also have several original dramas in our pipeline that will be rollout steadily in 2022 of this year for reality shows we saw the successful release of the fifth season of our own are on her way home thinking about when you work with that.
On her way home was designed to be more inclusive and to include training.
Topics, which led laterally.
Lively conversations with high visibility.
We believe the success of the <unk>, even demonstrated by our ability to create a robust and sustainable.
Which also attracts advertisers advertising dollars.
On the monetary inside the first quarter tends to be a soft period for seasonal reasons.
<unk> spending was the fact that total by macro uncertainties and omicron driven lockdown.
Despite these headwinds we took advantage of the dual platform advantages of Sohu media portal and Sohu video as well as our advanced live broadcasting technologies and this gave us the opportunity to explore.
The promotional needs and advertisers and work closely with them on their marketing plans in order to attract and capture their advertising dollars.
Next turning to gain business channel during the first quarter of 2000.
22, Chinese online games revenue exceeded our prior guidance. This was thanks.
Thanks to the solid performance of <unk>.
In our business line for our PC game looking first at regular Trp's Tel Aviv BPC, we lost a variety of holiday related credits and promotional events and an adjusted relative strength of different plans based on player feedback.
With <unk> vintage, we launched rich content around the time of new year and Spring Festival, we continue to optimize the game based game based on player feedback to increase player that set of steak satisfaction.
With mobile games, we launched a variety of holiday events and promotional events for legacy <unk> mobile.
<unk> remained steady on a sequential basis.
Next quarter, we will roll out new content.
<unk>.
Legacy <unk> mobile.
Little corn.
<unk> and other game heroes and other games.
We will also launch <unk> vintage on the Wii game platform as we look to bring more of a back longtime <unk> players by way of new channels.
And our game pipeline several key games under development and we are in the process of fine tuning them.
We look forward to bring them bring them two players soon.
Against an ever changing environment, Changyou will stick to its top games strategy by promoting innovation, beating the capacity of this team and rolling out more high quality mobile games in a variety of categories.
Now I'll turn the call to join up therefore, who will walk you through our financial results.
Thanks Vishal.
We will now walk you through the key financials.
Sure.
For the first quarter of 2022.
The number non-GAAP basis.
Finally, a reconciliation of non-GAAP to GAAP measures.
Our IR website.
First of all media portal corporate.
The revenues were $14 million.
22% year over year, and 27% quarter over quarter.
Quarterly operating loss was $44 million.
Compared with operating loss of $31 million in the same quarter last year.
So we'll be deal quarterly revenues were $15 million.
25% year over year.
Last quarter.
Quarterly operating loss was $21 million.
Compared with an operating loss of $13 million in the same quarter last year.
Changyou quarterly revenues, including <unk> $360 million.
11% year over year, and up 10% quarter over quarter.
<unk> and <unk>.
Operating profit of 80.
$3 million.
Compared with $99 million.
In the same quarter last year.
For the second quarter of 2022.
We expect.
Brand advertising revenue to be between $22 million.
And $25 million.
This implies annual decrease of 32% to 40%.
The sequential decrease of 7% sequential.
A sequential increase of 5%.
Alright, good revenues to be between $150 million.
$160 million.
This implies annual decrease of 1%.
The annual uses up 6%.
And a sequential decrease of 5% sequentially.
The sequential increase.
Yes.
non-GAAP net loss attributable to sell without limited.
To be between $50 million and $5 million.
Net loss attributable to Sohu Dot Com limited to.
<unk> to be between $80 million and $8 million.
This forecast reflects our current and preliminary view, which.
It is subject to substantial uncertainty.
This concludes.
Yeah.
Operator.
Now I'd like to open the call to questions.
Thank you.
Ladies and gentlemen, we will now begin the question and answer session. As a reminder, if you wish to ask a question. Please press star and one on your telephone keypad.
The first question comes from the line of Thomas Chong from Jefferies. Please ask your question.
Hi, Good evening, Thanks management for taking my question.
Question regarding the Q2 guidance, how should we think about the low end and the high end of the guidance given that we are seeing a lack of teeth Q on Q and a positive Q on Q.
And that's one may I ask about the advertising our momentum in the months of April and so far we are seeing in the <unk>.
One for me and my second question is about.
If they are slow.
Hi, how does our second quarter would look at differently from before and we are actually seeing a more people spending time paying games recently thank you.
In terms of advertising.
I think.
In Q2.
<unk>.
I think it's.
Quite impacted.
By the Lockdowns and not only Shanghai, but also other cities.
No.
Your question without without any without the.
The comment Lockdown I think.
We should be looking at another.
With him anymore tore.
In terms of.
Right.
$6 million.
Revenue in advertising.
Okay.
And.
Four.
Online game.
People are spending more time playing.
Okay, well known female condom.
Yes, it's Hudson capital.
So thank you all for settlements and legal for Panther.
With that Kevin.
Eastern Canada.
Hello.
In Thailand.
Tom.
Hi.
We're not seeing any influence caused by the pandemic outbreak.
Shanghai and <unk>.
The Shanghai accounted for a little part of our total players and also train the pandemic time.
People have to shopping online and also.
They have some time to testing all the testing so.
Okay.
Got it thank you.
Okay. Thank you. The next question comes from the line of Eddie Leung from Bank of America. Please ask your question.
Hey, Good evening guys just a follow up question on the advertising pieces.
Could you give us an idea on the key appetite industry.
In first quarter and.
<unk> industry you have seen.
Better performance and which ones are weaker and then secondly, just a question about the share buyback program.
I'm wondering if there is any update on the share buyback program.
Sure.
The management things about.
Launching and not buyback program given the discount the value of your share price. Thank you.
I think the Companys.
Competition on the distribution of <unk>.
Industries are similar to other quarters right with all of them for top category.
Okay.
Mrs and <unk>.
As MSG.
But secondly, I think the.
The auto industry are quite affected by the lockdown.
In Q2.
Also in Q1 I think.
Thanks, Steve.
Kind of a meltdown or something.
Yes.
<unk> <unk> impacted by some of the real estate companies.
Yeah.
Before.
Share buyback program.
Any updates.
We have any update on it.
In July .
We purchased.
Sure.
Total cost.
Yes, so basically 75% of the $100 million have been spent.
And buyback and.
So with this this quarter up to this point.
We do not have.
Any new.
Plan to buyback.
But.
Because.
No.
Yes.
Got it thank you.
Thank you participants as a reminder, if you wish to ask a question. Please press star and one on the telephone keypad.
Our next question comes from the line of Alicia Yap from Citigroup. Please ask your question.
Hi, Thank you good evening management, thanks for taking my questions.
I have a follow up.
Second quarter advertising outflow.
So I think Charles you just mentioned some of the bloody cars, that's probably been impacted more.
So when do you expect some of these budgets to become far well the second half can be attached.
Potentially see some.
Yes.
Instead of <unk>.
The declining trend so any color if you can.
In terms of some of the outlook.
And then second question is.
Unlike many things so we've gained approval.
Recently, so any change of the view for the second half gaming outlook.
Yes.
Okay. The first question about advertising.
As I said without the.
Covid Lockdowns, we should have at least that we basically I think I estimate that we lost about $6 million of advertising dollars due to the pandemic or the lockdown in Q2.
Yes.
In Q1 right.
Kuwait, that's obviously because of Chinese new year.
<unk>.
So for two reasons one is.
These companies are postponing there.
Marketing plans or their product rollout.
Secondly, the.
So they do not they spend less and secondly, especially with open arms.
Unique.
Marketing.
Marketing.
Plan for for advertisers.
Unique event with live broadcasting event.
For that especially with the pandemic.
<unk>.
Events needle on gathering the people and events cannot do it.
So who knew some marathon.
Either.
So that's also.
In particular affected.
Our monetization ability.
So in the second half of the year.
I hope that.
The lockdown will be eased and economy will.
No we gain some momentum.
We will see we don't know.
About the on again, great job on the issue.
Hopefully for farmer selling mandate.
Brazil.
Hey, Fahad.
Uh huh.
So follow up on the <unk>.
So it will make it up on Tahoe.
Okay.
And then Bob if I can ask Jason.
Higher fundings.
It's hard to handicap.
Yes, the license approval resumed issuing from April and we talked for cash of 25 approvals. So we have.
Need to observe further later on.
Changes, but we believe that the direction will be okay for a gaming company.
Thank you.
Thank you can I follow up a couple of questions. One is that can you remind us the games titles that.
As have in the pipeline that you're waiting for the game approval.
And then second question follow up is.
Given the FCC.
Entrust CAE.
The delisting list.
Any plans.
So we'll be thinking about you got the introductory offering in Hong Kong all of the secondary listing in Hong Kong. Thank you.
Hey, Yoshida film then prevailing in nature when you open a holiday on social.
Well channel, we will not see us leaning.
Hi, Jim.
Hello.
Hey, guys.
In times of the year Youll see the high level.
Now we have caused to the license approval for sale and we plan to launch it in July this year.
And.
You have started the appointment right now for other games, we haven't got any new license approval so far.
Okay.
The second question about the.
<unk>.
You guys I mean.
Who.
Listed on the NASDAQ Delisting issue I think there's still.
Urgent yet still.
Two years.
<unk> take over time.
So think about it so we don't have a plan yet to reintroduce.
Hong Kong market.
Okay.
Okay. Thank you.
Yeah.
Thank you Dear participants as a reminder, if you wish to ask a question. Please press star and one on your telephone keypads.
The next question comes from the line of Paul Jakobson.
Investor Please ask your question.
Thank you.
Say that 75% of the share buyback program was spent at the end of Q1 or 75% of the program will spent until today.
75% of the $100 million have been spent since we.
Since we announced the buyback.
That was like in Q.
Alright.
So in the last few months, we finish we achieved.
We bought back yes.
That's right yes.
Yes.
What's your what's your country.
Yes of course, correct can I follow up with another question.
And the combination of a huge amount of cash in a very low market cap looks like an excellent opportunity to create a lot of shareholder value.
We gave an update on I would think about the current cash pile when can we expect to get more clarity regarding how the cash will be used.
We.
Currently we have like $1 5 billion, one 5 billion U S dollar cash.
And.
We.
<unk>.
Well at this this quarter at this point we did.
Decided not to have the new buyback program, but that doesn't say that will not happen in the future.
We probably will have some buyback program in the future.
And.
Also.
Sure.
We.
We see it with you.
<unk>.
See some.
Promising product innovation that we expect to.
To test our products to make sure that it has some potential to explode or to really again either attract.
Traction in.
Then we will we'll spend some money.
Hum.
On user acquisition to bring more users.
Through our platform.
No.
Actually in Q1.
We.
Because we are still fine tuning on some of the products in test.
They're viable durability of the products that we.
Spend less than we.
We plan we expected so that's why our guidance.
We exceeded our guidance because we were guiding.
Our loss rate.
But because the gaming are performing better than those that we spend less on the channel our user acquisition so that was it.
Quarter overall, but in the future we will spend.
Because Chinese internet market is very competitive and you have to.
First of all you have to have the right.
Products and then.
For the right strategy either of you.
Algorithm recommendation based or sort of network based and we probably our products more.
Children Metro based and.
We hope that will explode or.
But we.
With the product and then.
You need to spend the money if you don't spend the money you don't have to bring the users through your platform. Then you don't know whether the product is the right while not so.
With that kind of cash we will spend wisely and we will.
We're not going to.
Yeah.
Yes.
That's all I.
I can think of either buyback and also spend the money on our product innovation users.
For these media and social network platform you have to have the size. If you don't have to.
Yes.
A critical mass of size a user.
Users.
Yeah.
Sure.
It's very hard to achieve that profitability.
But then some product.
Sometimes I'm products blow the interesting all youll have the right business model you have the right.
The design or the right idea, but actually the product has been there had been refining that product for years and suddenly one day, just exploded and people think that it just overnight success, it's actually not.
That's why we need to improve the product and it really.
Experience.
Improved user experience.
Gradually and slowly and really very carefully and.
And we're doing that.
Thank you for the answers.
Do you see that for example.
If you do not think that you can spend all the money on marketing overtime.
More buybacks or more likely that for example, a special dividend to the current situation with other low market cap.
Okay.
Yes, it's all possible and also we are we also need to look at how the how the how the COVID-19 pandemic and the lockdown in the overall economy.
The world.
<unk>.
The work so that's a lot of factors we're looking at so.
So we will not exclude the possibility of a buyback more buyback and dividends So hospital.
But we are still in the <unk>.
And we're on our media platform and we're still the players on the Internet field and then we see some good opportunities, especially in the social network with fewer people or in China. The.
Companies has not.
No.
Have have not stopped we have each had but still it's an open field a lot of the needs of user user needs are not satisfied.
So we are still the players and then with fiber Internet Wallets, you need a war chest of cash and you need to fight.
And it's we're just we're just to give up and don't do it.
We will distribute the money and creative stewardship holder value.
But we believe that we have a chance to win.
And then.
Okay can I ask one more question.
There is some upcoming game called <unk>, you start getting still plan for us.
So it Hasnt 22 release, which will be released in the second half Akshay last year.
Meaning to hold shrinking onto Ohio.
Okay, King and ship yes.
Yes, we will launch <unk> in July of this year.
Thank you.
That's all for me.
So basically.
The company has actually as a company.
I think he is better positioned than before.
We are.
First of all we are.
Game business, that's making money.
And we after the <unk> deal, we have a pile of cash.
And also our media platform and the video platforms growth strategy is organic we do not using <unk>.
Organic growth, sometimes consumed less cash needs really rely on is the right product.
Product design, so that's why I think.
We are in a.
Pretty good position to really fight the battle.
Even in a video our video business instead of spending huge amount of money buying very expensive content.
We have our <unk> strategy.
We are spending less money to spend less.
Less amount of money than some of our peers and to create.
Sure.
To create these dramas.
Episode, and then we have we.
Once users come to our platform video they found the video networking social networking and need in the short video.
It will stay.
So the user acquisition and also the user sticky.
Stickiness.
Just higher.
It's less cost effective small cost effective growth of users.
Then.
Just the.
No.
Long video.
Long form.
Drama.
Those content basically Netflix model.
Yes.
Alright other questions.
There are no further questions that does conclude our conference for today. Thank you for participating all disconnect have a nice day.
Okay.
[music].
Ladies and gentlemen, thank you for standing by and good evening. Thank you for joining <unk> first quarter 'twenty to 'twenty two earnings conference call. At this time all participants are in listen only mode. After management's prepared remarks, there will be the question and answer session. Today's conference call is being recorded if you have any.
You may disconnect at any time I would now like to turn the conference over to host for today's conference call One pool Investor Relations director of Sohu. Please go ahead.
Thanks, operator, thank you hold your applause to the car. So who's so it was first quarter 'twenty going into adult on the call, our chairman and Chief Executive Officer, Dr. Charles Zhang CFO , Joanna Lv and the Vice President of Finance Gemstone also gives us a child with C O Dorland Chen honesty, they're all doing well.
Before management begins their prepared remarks, I would like to remind you of the Companys Safe Harbor statement in connection with today's conference call.
For the historical information contained herein the matters discussed on this call may contain forward looking statements. These statements are based on contract 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 kind of tiny under forward looking statements.
For more information about the potential risks and uncertainties.
The company's filings with the Securities and Exchange Commission, including the most recent annual report on form 20-F.
With that I will now.
Now I'll turn the call over to Dr. Charles Zhang Charles Please proceed.
Thanks, <unk> and thank you everyone for joining our call.
The first quarter of 2022, despite the negative impact of <unk>.
<unk> 19, and the challenging macroeconomic environment, we continue to focus on product requirements and improving operational efficiency.
Thanks to the excellent performance of our online game business, we delivered better than expected bottom line performance.
And achieved profitability for the quarter.
So it will be a portal, we carried out product upgrades and improvements in the overall quality of our news and content.
All of which continued to draw users to our platform and keep them engaged.
For Sohu video.
Execution of our twin engine strategy, we proactively extended our live broadcasting to acquire scientific fields.
We also focused on user acquisition for our key mobile products and explore ways to improve monetization for Sohu media portal and so with video.
For Changyou online games performed well during the quarter with revenue exceeding the high end of our prior guidance.
Yes.
I'll go into details about each of these businesses in a moment, but first let me look at let US look at a quick review.
View of our financial performance.
For the first quarter of 2022.
Total revenues were $193 million down, 13% year over year and flat quarter over quarter.
Brad brand advertising revenues.
$24 million.
Down, 23% year over year, and 29% quarter over quarter.
Online game revenues.
$158 million.
Down, 11% year over year, and up 10% quarter over quarter.
GAAP net income attributable to <unk> Dot Com limited was.
$3 million.
Compared with $32 million in the first quarter of 2021 and $4 million in the fourth quarter of 2021.
non-GAAP net income attributable to Sohu Dot Com limited was $90 million.
Compared with $37 million in the first quarter of 2021 and $200000.
In the fourth quarter of 2021.
Yes.
Now, let I will go through some of our key businesses.
First media portal and Sohu video.
For Sohu media portal in order to strengthen our visibility and influence.
As a mainstream media platform, we provided real time, breaking news and social topics to users.
Well as optimizing algorithms and adding features.
Provide better user experience.
And increased user engagement and enhanced social distributions.
For Sohu video will continue to execute our tenant strength twin engine strategy.
The product differentiation and competitive advantages of our live broadcasting has enabled us to extend its scope for example, late 2021, we launched.
Transform physics class I open and start teaching.
<unk> online live broadcasting.
Late 2021, now has already more than <unk>.
40 online episodes since the initial launch.
This marks this year, we also introduced the offline classes as well with both the live broadcasting.
Young audience, we're enthusiastic on the generated robust online conversations this recognition gives us IP.
Given to this it is supported by our advanced library cutting technologies attracted broadcasters in a variety of scientific fields, ranging from physics, mathematics, chemistry, and aerospace et cetera.
Our platform to engage in scientific live broadcasting.
As a result, we have built a solid and incredible reputation as a library platform.
In the field of science and business knowledge and knowledge based platform.
Sure.
We will continue to explore innovative ways to create and distribute.
Our high quality content.
We also had some new wins with our new owned product production House and.
Four episodes of reality shows for original original dramas following this.
Central broadcast of mysterious how then you're going to go back this quarter. We started excluding this sequel, let me series two and also have several original dramas in our pipeline that will be rollout steadily in 2022 of this year for reality shows we saw the successful release of the fifth season of our own are on her way home schooling.
When you work with your view.
On her way home was designed to be more inclusive and to include training.
Topics, which led.
Lively conversations with high visibility.
We believe the success of the <unk>, even demonstrated by our ability to create a robust and sustainable IP, which also attracts advertisers advertising dollars.
On the monetary side, the first quarter tends to be a soft period for seasonal reasons.
<unk> spending was the fact that those are by macro uncertainties and omicron driven lockdowns.
Despite these headwinds we took advantage of the dual platform advantages of Sohu media portal and Sohu video as well as our advanced live broadcasting technologies and this gave us the opportunity to explore.
The promotional needs and advertisers and work closely with them on their marketing plans in order to attract and capture their advertising dollars.
Sure.
Next turning to <unk>.
Game business during the first quarter of 2000.
22 triangles online games revenue exceeded our prior guidance. This was thanks.
Thanks to the strong performance of <unk>.
In our business line for our PC game looking first at regular Trp's terribly BPC, we launched a variety of holiday related cuts in promotional events and an adjusted relative strength of different plans based on player feedback.
With <unk> vintage, we launched rich content around the time of new year and Spring Festival, we continue to optimize the game based.
Jim based on player feedback to increase player that set of steak satisfaction.
With mobile games, we launched a variety of holiday events and promotional events for legacy <unk> mobile.
Revenue remained steady on a sequential basis.
Next quarter, we will roll out new content.
<unk>.
Legacy <unk> mobile.
Little corn.
Heroes and allergens heroes and other games.
We will also launch <unk> vintage on the game platform as we look to bring more of a bank a longtime <unk> players by way of new channels.
And our game pipeline several key games under development and we are in the process of fine tuning them.
We look forward to bringing them, bringing them to players soon.
Against an ever changing environment, Changzhou will stick to its top games strategy by promoting innovation, beating the capacity of this team and rolling out more high quality mobile games in a variety of categories.
Now ill turn to the call to join up therefore, who will walk you through our financial results.
Thanks Vishal.
I will now walk you through the key financials of our <unk>.
Andrew.
For the first quarter of 2022.
All the numbers on a non-GAAP basis.
Find a reconciliation of non-GAAP to GAAP measures.
Our IR website.
First of all media portal.
The revenues were $40 million.
So on 22% year over year, and 27% quarter over quarter.
Quarterly operating loss was $44 million.
Compared with an operating loss of $31 million.
Same quarter last year.
Total video quarterly revenues were $15 million down 25% year over year.
Third quarter.
Quarterly operating loss was $21 million.
Compared with an operating loss of $13 million in the same quarter last year.
<unk> quarterly revenue, including once over 1300 $60 million.
Down, 11% year over year, and up 10% quarter over quarter.
And operating profit.
It is $3 million.
Compared with $99 million.
In the same quarter last year.
For the second quarter of 2022.
Perfect.
Advertising revenue to be between $22 million.
$25 million.
This implies annual decrease of 32% to 40% and.
And a sequential decrease of 7%.
A sequential increase of 5%.
Online game revenues to be between $150 million and $160 million.
This implies annual decrease of 1%.
The annual EBITDA is up 6%.
The sequential decrease of 5% plus.
The sequential increase.
Yes.
non-GAAP net loss attributable to several dozen limited.
To be between $50 million and $5 million.
Net loss attributable to Sohu Com limited to.
<unk> to be between $80 million and $8 million.
This forecast reflects our current and preliminary review, which.
It is subject to substantial uncertainty.
This concludes our prepared remarks.
Operator.
Now like to open the call to questions.
Thank you.
Ladies and gentlemen, we will now begin the question and answer session. As a reminder, if you wish to ask a question. Please press star and one on your telephone keypad.
The first question comes from the line of Thomas Chong from Jefferies. Please ask your question.
Hi, Good evening, Thanks management for taking my question I have a question regarding the Q2 guidance how should we think about the low end and the high end of the guidance given that we are seeing a negative Q on Q and a positive Q on Q.
And that's one may ask about the advertising our momentum in the month of April and so far we are seeing in the in the month of May and my second question is about.
If they are slow.
In Shanghai.
Our second quarter will look differently from before and we actually see in a more people spending time paying games recently thank you.
In terms of advertising.
I think.
In Q2.
<unk>.
I think it's.
Quite impacted.
By the Lockdowns and not only Shanghai, but also other cities.
No.
Your question without without any without.
Sure.
The Lockdown I think.
We should be looking at another time.
By moving more and more.
In terms of.
EBIT more right.
$5 million to $6 million.
Revenue in advertising.
Okay.
And.
For online game are people spending more time playing.
Okay well.
Jonathan This is Hudson capital.
So thank you all for settlements in Reno for content on a p/e with that David.
Eastern Canada.
Hello.
In Thailand.
Tom.
Hi.
We're not seeing any influence caused by the pandemic operate.
Shanghai and.
When you think of the Shanghai accounted for it as a part of our total players.
Also during the pandemic time.
People have to shopping online and also.
You have some time to test.
Well the testing so.
Okay.
Got it thank you.
Okay. Thank you. The next question comes from the line of Eddie Leung from Bank of America. Please ask your question.
Hey, Good evening guys just a follow up question on the advertising pieces.
Could you give us an idea on the key appetite industry.
In the first quarter, and which industry you have seen better performance and which ones are weaker and then secondly, just a question about the share buyback program.
Wondering if there is any update on the share buyback program.
Sure.
The management things about that.
Launching and not buyback program given the discount the value of your share price. Thank you.
I think the.
The competition on the distribution of them.
The industries are similar to other quarters right with all of them for the top category.
Okay.
Internet services.
As Mcg.
And but especially I think.
The auto industry are quite affected by the Lockdowns.
In Q2.
Also in Q1, I think we are seeing quite.
Real estate.
Kind of a meltdown something yes.
<unk> Q1 is impacted by some of the real estate companies.
Yeah.
Before.
Share buyback program.
Any updates.
We have any updates on it.
<unk>.
Perfect.
Three 3 million shares.
Yes.
Total cost of it.
Yes, so basically 75% of the $100 million have been spent.
And buyback and.
So with this this quarter up to this point.
We do not have.
Any new.
Plan to buyback.
But.
We will see because.
Yeah.
Got it thank you.
Thank you Yeah participants as a reminder, if you wish to ask a question. Please press star and one on the telephone keypad.
Next question comes from the line of Alicia Yap from Citigroup. Please ask your question.
Hi, Thank you good evening management, Thanks for taking my question.
I have a follow up on.
Second quarter advertising outflow.
So I think Charles you just mentioned some of their body cars, that's probably been impacted more.
So when do you expect some update at budget to be culture will the second half can be.
Or potentially see some.
Yes.
Instead ill.
The declining trend so any colors.
Okay.
In terms of some of the outlook.
And then second question is.
On the online gaming so we've gained approval.
<unk>.
Recently, so any change of the view for the second half gaming outlook for triangle.
Okay. The first question about advertising.
I said that without the <unk>.
Harvard Lockdowns.
We should have at least we basically I think I estimate that we lost about $6 million advertising dollars due to the pandemic or the lockdown in Q2.
Yes.
In Q1 Q2.
Q2, Q1's, a soft season, because Chinese new year.
So for two reasons one is.
These companies are.
Are postponing their marketing plans or product rollout.
Secondly, the.
So they do not they spend less and secondly, especially with openings.
Unique.
Marketing.
Marketing.
Plan for for advertisers.
<unk> unique event with live broadcasting event.
For that especially with.
The pandemic.
Events needle a gathering of people in the event cannot do it.
So when you sum marathon and other.
So that's also.
In particular affected.
Our own monetization ability.
So in the second half of the year.
I hope that.
The lockdown will be eased and.
Economy will.
No we gain some momentum.
We'll see we don't know.
Above all again.
Hopefully for farmer selling on those Amanda.
Yes.
Hey, Fahad Fahad.
So a follow up on the.
It's similar.
Is that one time Hershey.
Okay.
The financial part.
<unk>.
Higher fundings.
It's a harder challenge.
Yes, the license approval resumed issuing from April and we talked for cash of 25 approvals. So we have many.
Need to observe further later on.
Changes, but we believe that the basic direction will be okay for a gaming company.
So.
Thank you can I follow up a couple of questions. One is that can you remind us the games titles that sees that.
I have in the pipeline that youre waiting for the game approval.
And then second question follow up is.
Given the FCC.
Thanks Jesse.
The delisting list.
Any plans.
So we'll be thinking about the introductory offering.
In Hong Kong or the secondary listing in Hong Kong. Thank you.
Go ahead <unk>.
He'll then prevailing in the only open holiday <unk>.
Yes.
Hello channel alliances.
Hi, <unk>.
100 <unk>.
Thanks Sanjay.
A year.
You will see though in mail.
Now we have caused to the license approval for sale and we plan to launch it in July this year.
Has been.
Since the appointment right now.
Other games, we haven't got any new license approval so far.
Okay.
The second question about the.
Yes.
Yes.
Who.
Listen on the NASDAQ listing.
Sure I think there's still that urban yet.
Two years.
Timetable.
So think about it so we don't have a plan yet to reintroduce into Hong Kong market.
Okay.
Thank you.
Yeah.
Thank you Dear participants as a reminder, if you wish to ask a question. Please press star and one on hotel from Teapot.
The next question comes from the line of fully Jakobson private Investor. Please ask your question.
Thank you.
You say that 75% of the share buyback program was spent at the end of Q1 or 75% of the program will spend some time today.
75% of the $100 million have been spent since we.
Since we announced the buyback.
That was like in Q.
Alright.
So in the last few months, we finish we achieved.
We bought back.
That's right yes.
What's your what's your country.
Yes, that's correct can I follow up with another question.
And the combination of a huge amount of cash in a very low market looks like an excellent opportunity to create a lot of shareholder value.
Can you give an update on I would think about the current cash pile.
We expect to get more clarity regarding how the cash will be used.
We are.
Currently we have like $1 5 billion, one 5 billion U S dollar cash.
And.
We.
<unk>.
Well at this this quarter at this point.
We have decided not to have a new buyback program, but that doesn't say that we will not happen in the future.
We probably will have some buyback program in the future.
<unk>.
Also.
We will.
We see we feel.
See some.
Promising product innovation that we expect to.
<unk>.
To test our products to make sure that it has some potential to explode or really.
Again either.
Traction in.
And then we will spend some money on.
On user acquisition to bring more users.
Through our platform.
No.
Actually in Q1.
We.
Because we are still fine tuning on some of the products in test.
Barbeau durability of the products that we sell.
Spend less than we.
We plan, what we expected so that's why we our guidance we.
We exceeded our guidance because we were guiding.
Our loss rate.
But because they are winning are performing better and also we spend less on the channel our user acquisition so that was it.
Quarter overall, but in the future we will spend.
Because Chinese internet market is very competitive and you have to.
First of all you have to have the right.
Products and then.
For the right strategy either of you.
Algorithm recommendation based or sort of network based and we are probably our products more.
Metro based and.
We hope that will explode or.
But we.
With the product and then.
Do you need to spend the money if you don't spend the money you don't have to bring the users through your platform. Then you don't know whether the product is the right one or not so.
With that kind of cash we will spend wisely and well.
We're not going to do that.
Sure.
Yes.
Sure.
That's all.
Either buyback and also spend the money on our product innovation user.
This media and social network platform you have to have the size if you don't have to.
A critical.
Critical mass of size of user.
Users.
Yeah.
Yes.
It's very hard to achieve profitability.
But there are some products.
Sometimes I'm products flow testing all you will have the right business model you have the right.
The design or the right idea, but actually the product has been theres been refining that product for years and suddenly one day exploded and people think that it just overnight success, it's actually not.
That's why we need to improve the product and it really.
Experience.
Improved user experience.
Gradually and slowly and really very carefully.
And we're doing that thank.
Thank you for the answers and shows.
Do you see that for example.
If you do not think that you can spend all the money on marketing overtime.
More buybacks or more likely that for example, a special dividend in the future that Sharon situation with other low market cap.
Jim.
Okay.
Yes, it's possible, but it's also where we also need to look at how the how the.
How the Covid pandemic and the lockdown in the overall economy.
The world.
<unk>.
The work so that's a lot of factors looking at so.
So we will not exclude the possibility of a buyback more buyback and the dividend.
Paul.
But we are still in the game, where on a media platform. We're still the players on the Internet field and then we see some good opportunities, especially in the social network with fewer people or in China.
Companies have not.
No.
Have have not stopped we have each had but still it's an open field a lot of the needs of user user needs are not satisfied.
So we are still the players and then to further enhance the internet what do you need a war chest of cash and you need to fight.
And it's really just we're just to give up and don't do it.
We will distribute the money and creators of.
The value.
But we believe that we have a chance to win.
And then.
Thank you sure can I ask one more question.
There is upcoming game called <unk> is just getting still plan for us.
So it Hasnt 22, released so it will be released in the second half the year.
Meaning how shrinking onto Ohio.
Okay King of ship, yes.
Yes, we will launch <unk> in July of this year.
Thank you.
That's all for me.
So basically.
The company has actually as a company.
I think he is better positioned than before.
We are.
First of all we are.
Game business, that's making money.
And we after the <unk> deal, we have a pile of cash.
And also our media platform and video platforms growth strategy is organic we do not using <unk>.
Organic growth, sometimes consumed less cash needs really rely on is the right product.
In the product design, so that's why I think.
We're in a pretty good position to really fight the battle.
Even in a video our video business instead of spending huge amount of money buying very expensive content.
We have our <unk> strategy, we use we are spending less money to spend.
Less amount of money than some of our peers and to create.
Two to create these dramas.
Episode.
And then we have.
When users come to our platform as the video they found the video networking social networking and so need to short video clips they will stay.
So the user acquisition and also the user stickiness.
Stickiness.
Just higher.
Less cost effective and more cost effective growth of users.
Then.
Just.
No.
Long video.
Long form.
Drama.
Those content Netflix model.
Yes.
Alright other questions.
There are no further questions that does conclude our conference for today. Thank you for participating all disconnect have a nice day.