Q4 2022 Sohu.com Ltd Earnings Call
Speaker 2: Ladies and gentlemen, thank you for standing by and good evening. Thank you for joining SOHU's fourth quarter 2022 earnings conference call. At this time, all participants are in the listen-only mode.
Speaker 2: After management's prepared remarks, there will be a question and answer session.
Speaker 2: Today's conference call is being recorded.
Speaker 2: If you have any objections, you may disconnect at this time.
Speaker 2: And I'd like to turn the conference over to your host for today's conference called Huang Pu, Investor Relations Director of Zohu. Please go ahead.
Speaker 3: Thanks, operator. Thank you for joining us to discuss SOHU's fourth quarter 2022 results. On the call, Chairman and Chief Executive Officer, Dr. Charles Zhang, CFO , Zhu Anili, and Vice President of Finance, James Tseng. Also with us, Chang-Yue Seo, Dau Wen-Cheng, and CFO , Yu-Bing Wang.
Speaker 3: Before management begins their prepared remarks, I would like to remind you of the Committee Safe Harbor Statement in connection with today's conference call.
Speaker 3: Except for the historical information contained herein, the matters discussed on this call may contain four looking statements. These statements are based on current plans, estimates, and projections. Therefore, you should not place any relies on them.
Speaker 3: For looking statements involved in key risks and uncertainties, we caution you that a number of important factors could cause actual results to differ materially from those contained in any following statements.
Speaker 3: For more information about the potential risks and uncertainties, please refer to the conference filings with the Securities and Change Commission, including the most recent annual report on Form 20F. With that, I will now turn the call over to Dr. Charles Zhang. Charles, please proceed.
Speaker 4: Thanks everyone for joining our call. In the post order and full year of 2022, we continue to refine our products and optimize operating efficiency.
Speaker 4: with strict budget control.
Speaker 4: Despite the negative impact of COVID-19 and the macroeconomic challenges, thanks to our efforts, brand advertising revenue and bottom line performance both exceeded our prior guidance for the fourth quarter of 2022.
Speaker 4: At Soho Media Portal, we continue to dedicate ourselves to improving user experience by providing richly premium content and making significant improvements in both product and technology.
Speaker 4: at SOHCO video based on our twin engine strategy, we continue to develop both original content and the science-based
Speaker 4: Live broadcasting with our advanced live broadcasting technology. Meanwhile, we proactively explored the random monetization opportunities with our differentiated content marketing campaigns. Online games delivered stable performance, remaining in line with our prior guidance.
Speaker 4: I'll go into detail about each of these business in a moment, but first a quick overview of financial performance.
Speaker 4: For the fourth quarter of the year, 2022, total revenue is $160 million, down 17% year-over-year and 13% quarter-over-quarter. Brand advertising revenues were $29 million, down 14% year-over-year, and up 12% quarter-over-quarter.
Speaker 4: Online game RAM news, 121 million, down 16% year-old year, and 18% quarter-of-a-quarter. Gap net loss attributable to Silver.com limited was $7 million compared with an income of $4 million in the first quarter of 2021.
Speaker 4: and net loss of 2020.
Speaker 4: net loss of 22 million in the third quarter of 2022.
Speaker 4: non-GAAP net loss attributable to ZOO.com Limited was $2 million compared with the net income of ZOO.com.
Speaker 4: $2 million in the fourth quarter of 2021 and a net loss of $17 million in the third quarter of this year of 2022.
Speaker 4: For the full year of 2022, total RAM news is $734 million, down to how a percent compare with 2021, brand-added RAM news.
Speaker 4: 100 million, 103 million dollars down 24% compared with 2021. I gave you 585 million dollars down 8% compared with 2021.
Speaker 4: Gap net loss attributed to SOHU.com was $17 million compared with the net income of $69 million in 2021. Non-gap net income attributable to SOHU.com limited was $2 million income.
Speaker 4: compared with the net income of $79 million in 2001.
Speaker 4: So now let me go through our key business in more detail.
Speaker 4: First meet the portal and so-called video and so-called meet the portal during 2022 We upgraded algorithms, technologies and products through finance to it
Speaker 4: work hard at improving our user experience and keeping users engaged.
Speaker 4: users engaged by offering a wide range of premium content.
Speaker 4: and the self-media content and also their social distribution.
Speaker 4: We kept strict control budget and made a continuous improvement in operating efficiency. With these efforts, we were able to further reinforce our reputation as a mainstream media platform by leveraging our advanced broadcasting technology and rich media resources.
Speaker 4: At video, we focus on our train engine strategy by providing compelling content in both long and short form. We launched several original dramas and reality shows including Ye Cheng Fu and the fifth season of On Her Way Home.
Speaker 4: Audiences were enthusiastic about both of these. We have several new original dramas in our pipeline to be released in coming quarters. In terms of short-term content, short-form content, we launched a successful series of science-related live broadcasting during the year, including the highly regarded...
Speaker 4: Ip of my physical class, I can get to the class, which I taught online.
Speaker 4: This IP has drawn significant attention and attracted hundreds of leading professional broadcasters in the variety of fields, consolidating
Speaker 4: Yeah, attractive Hendra eating professional broadcasters
Speaker 4: and influencers in a variety of fields, consolidating our reputation as a leading science and knowledge-based live broadcasting platform and also another live broadcast on a short video platform.
Speaker 4: On the monetization side of the COVID-19 pandemic and the macroeconomic uncertainties,
Speaker 4: have negatively impacted the whole market.
Speaker 4: Even under these conditions we explore new application scenario using our advanced and live broadcasting technology benefiting from our unique IPs and Continue to code traditional flagship events as well as unique and innovative content marketing campaigns These examples easy fancy campaigns provides us with great premier content
Speaker 4: at the same time strengthen our brand influence and brought out new and significant financial opportunities.
Speaker 4: In 2022, we successfully hosted the Sohu News marathon.
Speaker 4: A traditional item, IT. And the Global Finance Annual Conference.
Speaker 4: the talk under Starry Sky, a new program, and others. This quarter we hosted in fantastic factories
Speaker 4: tailored to an advertiser, which not only drew a significant tension across media platforms, but also consolidated, so whom competitive advantage of brand advantages and captured
Speaker 4: Now turning to online game business, during the fourth quarter of 2002, online game revenues were in line with the company's prior guidance.
Speaker 4: In our business line for PC games, we adjusted the battlefield map and the gameplay of regular TLDB PCs cross-server, clan or system.
Speaker 4: We lost the new expansion pack for TLBB vintage.
Speaker 4: to celebrate its anniversary with the tradition of its first new clan.
Speaker 4: mobile games we introduced a survival mode TVT event for Lexi TLDB mobile.
Speaker 4: In the first quarter of 2023, we keep players engaged. We will launch expansion packs to celebrate Chinese New Year.
Speaker 4: and a serious holiday event for TLBVPC like C like the TLBV mobile and other games.
Speaker 4: Yeah, we have done that now.
Speaker 4: As demand in the online games market becomes deeper and more diversified, we intend to stick with our top game strategy by promoting professional talent development as well as innovation in content technology.
Speaker 4: and roll out more high quality mobile games of different types.
Speaker 4: In terms of game pipelines, while maintaining our core competitiveness in MMORPGs, we'll also invest in more games of multiple types.
Speaker 4: including KARP, RPGs, strategy, sports, and idle games.
Speaker 4: Now I'll turn to the call to join our CFO who will walk you through our financial results. Thank you Charles. I will now walk you through the financials of our major segments for the fourth quarter and the full year 2022.
Speaker 3: All the numbers on the Nangat basis.
Speaker 5: You may find the reconciliation from that gap to get measured our our website
Speaker 5: For Sofa Media Portal, quarterly revenues were $16 million, down 16% year-over-year, and up 9% quarter-over-quarter.
Speaker 5: The quarterly operating loss was $32 million.
Speaker 5: compared with the opposite loss of 38 million dollars in the same quarter last year.
Speaker 5: For the full year 2022, social media portal revenues were $61 million, down 19% compared with 2021.
Speaker 5: The four-year operating laws was $156 million compared with the operating laws of $134 million in 2021.
Speaker 5: For SOGO video, quarterly revenue over $16 million.
Speaker 5: got 28% year over year and up 1% quarter over quarter.
Speaker 5: quarterly operating loss of $21 million compared with the operating loss of $11 million in the same quarter last year.
Speaker 5: for the full year 2022.
Speaker 5: So video revenues were $63 million.
Speaker 5: Down 28% compared with 2021.
Speaker 5: Four-year operating loss was $99 million compared with an operating loss of $47 million in 2021.
Speaker 5: For Charles, Online Gaming Business, and 17173.
Speaker 5: Quarterly revenue, $122 million.
Speaker 5: down 16% yield right here and 18% quarter over quarter.
Speaker 5: Quarterly operating profit was $54 million.
Speaker 5: compared with the operating profit of $55 million in the same quarter last year.
Speaker 5: For the full year 2022, Calio's total revenues were $592 million.
Speaker 5: down 9% compared with 2021.
Speaker 5: The full year operating profit $282 million compared with the operating profit of $310 million in 2021.
Speaker 5: For the first quarter of 2023, we expect run advertising revenues to be between $20 million and $23 million. This implies annual decrease of 3% to 16%, and the sequential decrease of 20%
Speaker 5: to 31% unlike in revenues to be between $121 million and $131 million.
Speaker 5: This implies annual decrease of 70% to 23% and a sequential increase of 0 to 8%.
Speaker 5: Nangaf Netlaw, attributable to SOHU.com unlimited.
Speaker 5: to be between 50 million dollars and 25 million dollars.
Speaker 5: a direct mass loss are definitely both shown throughochutica millimit.
Speaker 5: to be between 20 million dollars and 30 million dollars.
Speaker 5: Our guidance reflects our current and preliminary view.
Speaker 5: which is subject to substantial uncertainties.
Speaker 5: This concludes our prepared remarks.
Speaker 5: Operator, we would now like to open the call to questions.
Speaker 2: Thank you. We will now begin the question and answer session.
Speaker 2: To ask a question, please press star 1-1 on your telephone. You will then hear an automatically message advising your hand is raised.
Speaker 2: To withdraw your questions, please press star 1-1 again.
Speaker 2: Please stand by while we compile the Q&A roster. Once again, star 1-1 for questions.
Speaker 2: Our first question comes from the line of Thomas Chong from Jefferies.
Speaker 6: Please ask your question, Thomas. Hi, good evening. Thanks, management, for taking my questions. My first question is about the overall advertising industry outlook in 2023. Can management comment about the sentiment so far other than a career in the economic output. Such a good decision on a future look at investment Qin to take on truth mostly is the
Speaker 6: And on Song Hu, how should we think about the advertising spending among AUSPO, FMCG, Internet services? And my second question is more about the use of cash and our investment strategies for this year.
Speaker 6: And finally, may I also get some color for management about our thoughts on the recent Chai GPT and how it reshaped the internet sector? Thank you.
Speaker 4: Okay, so the first overall advertising market after the basically the lift of lockup and after the, you know, the coming and in the, I think the economy is picking up in the first quarter.
Speaker 4: So we are I'm seeing a
Speaker 4: you know, an outlook of...
Speaker 4: you know a Kind of optimistic about the overall independent market compared with the last year 2022 Because companies are starting to spend Start marketing events to start spending money to market their products
Speaker 4: brand. In terms of industry, specific industry, I think auto is the first account right? Also and followed by FMCG is doing fine? Yeah. Internet service in Q4 is doing fine.
Speaker 4: Yeah, actually for both parts of Q4, we're still at in the lockdown.
Speaker 4: Error, right?
Speaker 4: But because of our some live broadcasting activities we were we have a growth, right? Improvement of the health center.
Speaker 7: in Q4.
Speaker 4: But that was still during the lockup.
Speaker 4: years. So 2023 we're kind of optimistic. We see the economy is picking up and the company is starting to spend money now.
Speaker 4: So, 2023, we're kind of optimistic. We see the economy is picking up and the company is starting to spend money now.
Speaker 4: And the investment strategy, I think, first of all, we'll continue to invest in the products, designing our products and building the networks.
Speaker 4: And also to spend user acquisition with the product ready and with its features, improving stickiness. We're going to spend money on...
Speaker 4: user acquisition as we did in 2022 on video, on Sofa video.
Speaker 4: spending more than before on super video. That's why you see the loss of video business widening, right, in last year. So this year we'll spend both on video and...
Speaker 4: on the Sofa.News Sofa Media Portal. It separates Sofa.News app.
Speaker 4: when we believe that our product is ready and with stickiness and
Speaker 4: to acquire users and make sure they come and they stay.
Speaker 4: In terms of more investment, probably with AI technology and chat GPT and we'll actually our new recommendation algorithm is a...
Speaker 4: deep application of AI technology like deep learning and all these algorithms or AI.
Speaker 4: but for to have the whole
Speaker 4: chat GTT type of open AI services. It's already, you know, so-go, you know, already so-go. So we don't, this need, you know, to have the whole, develop the whole algorithm from one-off. It really needs the kind of company that with certain background.
Speaker 4: Now we are already so focused. Right now we are not able to develop the whole OpenAI system, but we can outsource.
Speaker 4: the fundamental layers of those algorithms and to some...
Speaker 4: some other companies and then to just
Speaker 4: applications apply them to our...
Speaker 4: for our social network because it's about...
Speaker 4: Cretz ringing and entering and interactivity.
Speaker 4: So it fits well with our social network strategy.
Speaker 4: work, strategy. No.
Speaker 4: Well, I hope I answered your question.
Speaker 6: Thanks for the detailed answer.
Speaker 2: Thank you.
Speaker 2: Our next question comes from the line of Eddie Leung from Bank of America, Merrillidge. Please ask your question, Eddie.
Speaker 8: Good evening guys, just two questions. The first one is about games. Just wondering if that one has any, I won't say guidance, any outlook on the potential launch time of some of the new games.
Speaker 8: And then secondly, I think Charles should talk a little bit about that. So in terms of use of cash, because you guys still have a very good cash balance, in addition to investment, will there be any potential plan for, for example,
Speaker 8: more share buyback or even dividend. Thank you.
Speaker 8: If will,' if everybody youro see your first ING long, you will see the transction again time nextion.
Speaker 8: And more energy. hust the en and the Q cent in general such year, currently with plan to launch new tey in third quarter this year.
Speaker 9: Got that. Thank you.
Speaker 4: So we will not exclude the possibility of shared buybacks this year. Yes, it's possible.
Speaker 10: We may.
Speaker 8: Understood Charles, thank you.
Speaker 2: Our next question comes from the line of Alicia Yup from Citi. Please ask your question Alicia.
Speaker 11: Hi, can you hear me? Hi, good evening management. Yeah, thanks for taking my questions. I have a couple questions. First, follow up on the gaming business. So the driver for your sequential improvement for your gaming.
Speaker 11: business that you've guided for first quarter, is that mainly on some of the expansion packs that have released and been doing well, so that's your guided flight improvement on the gaming for one queue. That's the first question within the gaming. And then follow up on the new TRBB launch.
Speaker 11: because we also noticed there is another similar title, which is called TRBB2 by Perfect War. So would that be, can you comment, would that be any confusions or any kind of globalization effect from this similar title?
Speaker 11: And then for advertising business.
Speaker 11: Can you also elaborate a little bit in terms of the first quarter guidance? Do you think this is actually considering an improving trend? Because it does look like your guidance on the year-over-year basis is still a negative growth despite the entire year.
Speaker 11: already having declined, but is it because of the Chinese New Year in first quarter? So would you expect second quarter on birth, we should start to get positive year-over-year growth. So, yeah, thank you.
Speaker 8: Produced the iser is Dam, So unde can and K stream K to sh and help can shop your.
Speaker 12: The last thing will it easy to allow. You see, chary is the goattoroom, virini and soor this ia hoto her her, who shallcre?
Speaker 13: Because we launched some promotional activities for our existing games in the first quarter around Chinese New Year.
Speaker 13: You in general. younang my the, but me should do that if Canal lel are here the self, So you could find something to. Cannot can be C change So soon, zimbabo her.
Speaker 12: They both use hand-t?? and Arduino for the head. So I think they spend their time minutos thinking about it. When we clan Light's mix the autonomous wasteiken in Vietnam tego gu, to us how to manage our victim population, it gets our minds held.
Speaker 12: Thank you very much for your time.
Speaker 12: Thank you.
Speaker 12: They signed into hold that section goal.
Speaker 13: Yeah, first of all, we are aware of that new TLDB and TLDB 2 are made for mobile games and we are sure there will be some kind of impact, but from our past experiences, we can have relationships with GO fire the code up into the system and also be transparent to use Firebase.
Speaker 13: especially like, like I said, TLBB Mobile or TLBB Owner, when they launched to the market, there was some kind of positive impact to the existing TLBB franchise games. So we can only see the result by then after the games, two games to launch.
Speaker 4: Okay. All right. In terms of advertising, so
Speaker 4: The first quarter of 2022 is basically before it's prior, you know, it's before the real lockdown that happened in Q2, right? So it's a relatively a more normal quarter, right, Q1.
Speaker 4: But this quarter, the Q1 of 2023 is, you know, as Q4, we already, you know, pick up some, you know, end-time pickups, but it's due to the special unique offering of this class, you know, this class. But currently, the maestro says, You are our PA program, too.
Speaker 4: Q1, first of all, is slow season, but it's also a... It's still, you know, restoring, right? It's resuming, but it's still not fully... It's prior... Gaiden, prior lockdown, you know, a quarter, right? That's why it's kind of a decrease.
Speaker 4: Yeah. Did I answer your question?
Speaker 4: Yeah, I see what you mean in terms of the year over year. It's a year over year. Q2 is going to pick up speed, yeah. I'm sure Q2 will definitely be better than Q2 in 2022. Q2 and Q3 of 2022 are the worst.
Speaker 4: Right because the lockdown is it in lockdown the Shanghai and you know So this kill lines are we already see some hope right? So it's speaking up, but it's still not fully fully, you know resume the horror
Speaker 11: I see. I think they thank you, Charles. And also, thank you, the 1 for the answer. I just have 1 very quick follow up in terms of the social media and so who do we have any plans or target to narrow the last issue?
Speaker 4: Actually, the answer is no because we're going to spend. You were asking the question about how do we spend, we have a good cash balance, right? So that's why we need a wall chat to really develop.
Speaker 4: in order to have ultimately have the profitable platform we have to have larger user base you have to have the scale scale of the user base
Speaker 4: That's the only way for a platform to make money, right? But to reach that, you need to spend.
Speaker 4: That's why we're going to this year, as I said, when we believe that the kind of products that we are designing or have been perfecting or developing are ready.
Speaker 4: have the right kind of stickiness. So to make the user stay, then we're going to spend, as we did on video, kind of spending a little more on video on 2022. And we see the user base actually grow.Di renowned for links from all of our webinars, n claims and live news.
Speaker 4: quite well. So where do we spend?
Speaker 9: Okay totally people, I or do that.
Speaker 11: I see. Okay. All right. Thank you for your answer, Charles. Thank you.
Speaker 2: As a reminder, to ask a question, please press star 11.
Speaker 2: All right, I am sure you know for the questions and with that we conclude today's conference call. Thank you for participating. You may not disconnect.
Speaker 1: Silence.
Speaker 2: The conference will begin shortly. To raise and lower your hand during Q&A, you can dial star 1 1.
Speaker 2: Ladies and gentlemen, thank you for standing by and good evening.
Speaker 2: Thank you for joining SOHU's fourth quarter 2022 earnings conference call. At this time, all participants are in the listen-only mode.
Speaker 2: After management's prepared remarks, there will be a question and answer session.
Speaker 2: Today's conference call is being recorded.
Speaker 2: If you have any objections, you may disconnect at this time.
Speaker 2: And I'd like to turn the conference over to your host for today's conference called Huang Pu, investor relations director of Zohu. Please go ahead.
Speaker 3: Thanks, operator. Thank you for joining us to discuss SOHU's fourth quarter 2022 results. On the call, Chairman and Chief Executive Officer, Dr. Charles Zhang, CFO Joanna Liu, and Vice President of Finance, James Tseng. Also with us, Chang-Yuo Seo, Doyen Chen, and CF Yaw-Bing Wang.
Speaker 3: Before management begins their prepared remarks, I would like to remind you of the Coming Safe Harbor Statement in connection with today's conference call.
Speaker 3: Except for the historical information contained herein, the matters discussed on this call may contain four looking statements. These statements are based on current plans, estimates, and projections.
Speaker 3: Therefore, you should not place undue reliance on them. For working statements involved in key risks and uncertainties.
Speaker 3: We caution you that a number of important factors could cause actual results to differ maturely from those contained in any following statements.
Speaker 3: For more information about the potential risks and uncertainties, please refer to the conference findings with the Securities and Change Commission, including the most recent annual report on Form 20F. With that, I will now turn the call over to Dr. Charles Zhang. Charles, please proceed. Thanks,aye.
Speaker 4: Thank you everyone for joining our call. In the close order and the full year of 2022, we continue to refine our products and optimize operating efficiency.
Speaker 4: with the strict budget control.
Speaker 4: Despite the negative impact of 2019 and the macroeconomic challenges, thanks to our efforts, grand ad-time, and revenue and bottom line performance both exceeded our prior guidance for the fourth quarter of 2022.
Speaker 4: At Soho Media Portal, we continue to dedicate ourselves to improving user experience by providing richly premium content and making significant improvements in both product and technology.
Speaker 4: At SOHU video, based on our twin engine strategy, we continue to develop both original content and the science-based. We continue to develop both original content and the science-based.
Speaker 4: Live broadcasting with our advanced live broadcasting technology.
Speaker 4: Meanwhile, we proactively explored a range of monetization opportunities with our differentiated content marketing campaigns.
Speaker 4: games delivered stable performance, remaining in line with our prior guidance. I'll go into detail about each of these business in a moment but first a quick overview of our financial performance.
Speaker 4: For the fourth quarter of the year, 2022, total revenue is $160 million, down 17% year-over-year and 13% quarter-over-quarter. Advertising revenues were $29 million, down 14%.
Speaker 4: and up to help us end the quarter over quarter.
Speaker 4: Online game revenues, 121 million, down 16% year-over-year, and 18% quarter-over-quarter. Gap net loss attributable to SOBU.com limited was $7 million compared with an income of $4 million in the fourth quarter of 2021, and net loss of 2020.
Speaker 4: net loss of 22 million in the third quarter of 2022.
Speaker 4: non-GAAP net loss attributable to ZOO.com Limited was $2 million compared with the net income of $2 million.
Speaker 4: $2 million in the fourth quarter of 2021 and a net loss of $17 million in the third quarter of this year, of 2022.
Speaker 4: For the full year of 2022, total revenue is $734 million, down 12% compared with 2021. Brent out of Honeycomb News
Speaker 4: 100 million 103 million dollars down 24% 2021. I gave you $585 million dollars down 8% compared with 2021.
Speaker 4: Gap net loss attributed to SOHU.com was $17 million compared with a net income of $69 million in 2021. Non-gap net income attributable to SOHU.com limited was $2 million income.
Speaker 4: compared with the net income of $79 million on the 2021.
Speaker 4: So now let me go through our key business in more detail. First Media Portal and SOHU video. At SOHU Media Portal during 2022, we upgraded algorithms, technologies, and products through refinement each.
Speaker 4: work hard at improving our user experience and keeping users engaged.
Speaker 4: users engaged by offering a white-range or premium content.
Speaker 4: the self-media content and also their social distribution. We kept strict control budget and made a continuous improvements in operating efficiency. With these efforts we were able to further reinforce our reputation as a mainstream media platform.
Speaker 4: by leveraging our advanced live broadcasting technology and rich media resources.
Speaker 4: At video, we focus on our twin engine strategy by providing compelling content in both long and short form. We launched several original dramas and reality shows including Yie Cheng Fu and the fifth season of On Her Way Home.
Speaker 4: the fifth season. Audiences were enthusiastic about both of these. We have several new original dramas in our pipeline to be released in coming quarters. In terms of short-term content, short-form content, we launched a successful series of science-related live broadcasting during the year, including the highly regarded...
Speaker 4: IP of my deselectrovs, gaps, the wind up out and down...
Speaker 4: This IP has drawn significant attention and attracted hundreds of leading professional broadcasters in the variety of fields, consolidating
Speaker 4: Yeah, it's a track to the end of eating professional broadcasters.
Speaker 4: and influencers in a variety of fields, consolidating our reputation as a leading science and knowledge-based live broadcasting platform, and also not only live broadcasting, but short-form, short video platform. On the monetization side of the COVID-19 pandemic and the macroeconomic...
Speaker 4: and innovative content marketing campaigns. For example, these events and campaigns provide us with great premier content, at the same time strengthen our brand influence and brought us new and significant financial opportunities.
Speaker 4: In 2022, we successfully hosted the Sohu News marathon, a traditional IT and Sohu Finance annual conference.
Speaker 4: They talk under Starry Sky, a new program, and others. This quarter we hosted in fantastic factories tailored to a advertiser, which not only drew a significant tension across media platforms, but also consolidated so from competitive advantage of brand advantages and captured advertisers.
Speaker 4: or system.
Speaker 4: We launched a new expansion pack of CLBV vintage to celebrate its anniversary with the expedition of its first new clan.
Speaker 4: mobile games we introduced a survival mode TVP event for Lexi TLDB Mobile.
Speaker 4: In the first quarter of 2023, we keep players engaged. We will launch expansion packs to celebrate Chinese New Year.
Speaker 4: and a serious holiday event for TLBV PC, like TLBV Mobile and other games.
Speaker 4: We have to time that now.
Speaker 4: As demand in the online games market becomes deeper and more diversified, we intend to stick with our top game strategy by promoting professional talent development as well as innovation in content technology.
Speaker 4: and draw out more high quality mobile games of different types.
Speaker 4: In terms of game pipelines, while maintaining our core competitiveness in MMORPGs, we'll also invest in more games of multiple types.
Speaker 4: including CARP, RPGs, strategy, sports and idle games.
Speaker 8: Now I'll turn to the call to join our CFO who will walk you through our financial results. Thank you Charles. I will now walk you through the financials of our major segments for the fourth quarter and the full year 2022.
Speaker 5: All the numbers on the NANGAP basis, you may finally consideration of NANGAP to get measures on our air website.
Speaker 5: For Sofa Media Portal, quarterly revenues were $16 million, down 16% year over year, and up 9% quarter over quarter.
Speaker 5: The quarterly operating loss was $32 million. Compared with the operating loss of $38 million in the same quarter last year.
Speaker 5: For the four year 2022, so-umidial photo-reminutes were $61 million. Down 19% compared with 2020 West.
Speaker 5: The four-year operating laws was $166 million compared with the operating laws of $134 million in 2021.
Speaker 5: For you, email.com.it. Thank you very much. For $16,000.
Speaker 5: got 28% year over year and up 1% quarter over quarter. Quarterly operating loss was $21 million compared with operating loss of $11 million in the same quarter last year.
Speaker 5: For the full year 2022, SOHU video revenues were $63 million, down 28% compared with 2021.
Speaker 5: Four-year operating loss was $99 million compared with the operating loss of $47 million in 2021.
Speaker 5: For Charles, Online Game Business and 17173.
Speaker 5: Quarterly revenue, $122 million.
Speaker 5: About 16% yield right here and 18% quarter over quarter.
Speaker 5: Quarterly operating profit was $54 million.
Speaker 5: compared with the operating profit of $55 million in the same quarter last year. For the full year 2022, Calio's total revenues were $592 million.
Speaker 5: Don't rise to send compared with 2021. The full year operating profit, $282 million, compared with an operating profit of $310 million in 2021.
Speaker 5: For the first quarter of 2023, we expect brand advertising revenue to be between $20 million and $23 million. This implies annual decrease of 3% to 16% and a sequential decrease of 20% to 71%.
Speaker 5: All I gain revenue to be between $121 million and $131 million.
Speaker 5: This implies annual decrease of 70% to 23% and a sequential increase of 0 to 8%.
Speaker 5: Nangat Net Loss attributable to SOHO.com unlimited to be between $50 million and $25 million.
Speaker 5: And the gas net loss attribute for Sohu Docom limited to be between $20 million and $30 million.
Speaker 5: Our guidance reflects our current and preliminary view, which is subject to substantial uncertainty.
Speaker 5: This concludes our prepared remarks.
Speaker 2: Operator, we would now like to open the college questions. Thank you. We will now begin the question and answer session.
Speaker 2: To ask a question, please press star 1-1 on your telephone. You would then hear an automatically message advising your hand is raised.
Speaker 2: To withdraw your questions, please press star 1-1 again.
Speaker 2: Please stand by while we compile the Q&A roster. Once again, it's Star 1-1 for questions.
Speaker 6: Our first question comes from the line of Thomas Chong from Jefferies. Please ask your question, Thomas. Hi, good evening. Thanks, management, for taking my questions. My first question is about the overall advertising industry outlook.
Speaker 6: My second question is more about the use of cash and our investment strategies for this year. And finally, may I also get some color for management about our thoughts on the recent charge EBT and how it reshapes the Internet sector. Thank you.
Speaker 4: Okay, so the first overall advertising market after the basically the lift of lockup and after the, you know, the copy and in the, I think the economy is picking up in first quarter.
Speaker 4: So we are I'm seeing a you know a outlook of
Speaker 4: you know a Kind of optimistic about the overall end of time market compared with the last year 2022 Because companies are starting to spend Start marketing events to start Spending money to market their products
Speaker 4: brand. In terms of industry, specific industry, I think auto is the first account right? Also and followed by FMCG is doing fine. Yeah. Internet service in Q4 is doing fine.
Speaker 4: Yeah, actually for both of the Q4s were still in the lockdown.
Speaker 4: Error, right?
Speaker 4: But because of our some live broadcasting activities, we have a growth, right? Improving, right? Improving, right? Improving of 12%.
Speaker 4: in Q4. But that was still during the lockup.
Speaker 4: years. So, in 2023 we were kind of optimistic. We see the economy is picking up and the company is starting to spend money now.
Speaker 4: And the investment strategy, I think, first of all, we'll continue to invest in the products, defining our products and building the networks.
Speaker 4: And also to spend user acquisition with the product ready and with its features, improving stickiness. We're going to spend money on...
Speaker 4: user acquisition as we did in 2022 on video, on soap video.
Speaker 4: spending more than before on super video. That's why you see the loss of video video business widening, right, in last year. So this year we'll spend both on video and...
Speaker 4: on the new silver media portal. It separates the new tap.
Speaker 4: when we believe that our product is ready and with stickiness and
Speaker 4: to acquire users and make sure they come and they stay. In terms of more investment, probably with AI technology and chat GPT and we'll actually our new premium con our new recommendation
Speaker 4: Algorithms is a deep application of AI technology, like deep learning and all these algorithms on AI.
Speaker 4: but for it to have the whole chat GTT type of open AI services it's already you know so go you know where this also go so we don't this need you know to have the whole develop the whole algorithm from all copies it's really need a kind of company that with a certain background
Speaker 4: Now we are already so so go so right now we are not able to develop the whole open AI system but we can outsource.
Speaker 4: the fundamental layers of those algorithms and to some...
Speaker 4: some other companies and then to just
Speaker 4: applications, apply them to our social network because it's about...
Speaker 4: and answering and interactivity.
Speaker 4: So it fits well with our open network strategy.
Speaker 4: Well, I hope I answered your question.
Speaker 9: Thank you Charles. Thanks for the detailed answer.
Speaker 2: Thank you. Our next question comes from the line of Eddie Leung from Bank of America-Marilyn. Please ask your question, Eddie.
Speaker 8: Good evening guys, just two questions. The first one is about games. Just wondering if that one has any, I won't say guidance, any outlook on the potential launch time of some of the new games. And then secondly, I think Chao-Shiu talked a little bit about that.
Speaker 8: or even dividend. Thank you.
Speaker 13: E will went if reber yo see ING ong ong, you will see the trans and began time Nat.
Speaker 12: Currently we plan to launch new TLBB in third quarter this year.
Speaker 9: Got that. Thank you.
Speaker 4: So we will not exclude the possibility of shared buybacks this year. Yes, it's possible. We may.
Speaker 2: i understand that the next question comes from the line of a lixure up from city. Please ask your question in the lixure.
Speaker 11: Hi, can you hear me? Hi, good evening, management. Thanks for taking my questions. I have a couple questions. First, follow up on the gaming business. So the driver for your sequential improvement for your gaming.
Speaker 11: business that you've guided for first quarter is that mainly on some of the expansion packs that have released and you know been doing well so that you're guided flight improvements on the gaming for one kill. That's the first question within the gaming and then follow up on the new TRBB.
Speaker 11: title and then for advertising business, can you also elaborate a little bit in terms of the first quarter guidance? Do you think this is actually considering and improving trend? Because it does look like your guidance on the year or your basis.
Speaker 11: is still a negative growth despite the entire year already having declined. But is it because of the Chinese New Year in first quarter? So would you expect second quarter onward, we should start to get positive year-over-year growth.
Speaker 13: umso Yeah, Thank you. Do you even to do dream and I M the your E can and K on stream che to such to help can shop with your home. Last see it easy to allow, you see.
Speaker 13: Because we launched some promotional activities for our existing games in the first quarter around Chinese New Year.
Speaker 12: I some mean one me should do that Canal level are here, the soci is tre, quite what. The woman, the co, UN C C thing. So she imbabo her titles some. So Y Y 20 Gu P.
Speaker 12: when the Chinese government isooters coming soon. Next, we will further design the four- allied
Speaker 12: It would like to afterwards introduce to the panel these presentations
Speaker 13: First of all, we are aware that new TLBB and TLBB2 are made for mobile games. And we're sure there will be some kind of impact. But from our past experiences, especially like, like I said, TLBB Mobile or TLBB owner, they launched...
Speaker 4: So the first quarter of 2022 is basically before it's prior, you know, it's before the real lockdown that happened in Q2, right? So it's a relatively a more normal quarter, right Q1.
Speaker 4: But this quarter, the Q1 of 2023 is, you know, Q4 we already, you know, pick up some, you know, enzyme pickups or something, but it's due to the special unique offering of this class, you know, this class. But Q1...
Speaker 4: first of all it's a slow season but it's also a it's still restoring right it's resuming but still not fully to its prior guidance prior lockdown a quarter right but that's why it's kind of decreased
Speaker 4: Yeah, should I answer your question?
Speaker 4: Yeah, I see what you mean. In terms of the year-over-year come. It's a year-over-year. In terms of Q2, you're going to pick up speed, yeah. I'm sure Q2 will definitely be better than Q2 in 2022. I think Q2 and Q3 of 2022 are the worst.
Speaker 4: Right because the lockdown is in lockdown with Shanghai and you know And so let's kill one is we already see some hope right so it's speaking up But it's still not fully fully you know resume the world
Speaker 11: I see. I think thank you, Charles. And also, thank you, the 1 for the answer. I just have 1 very quick follow up in terms of the social media and so who do we have any plan for target to narrow the last feature?
Actually the answer is no because we're going to spend, you know, as you know, you're asking the question about how do we spend, you know, cash, good cash balance, right? So that's why we need a watch out that to really develop.
in order to have ultimately have the profitable platform we have to have a larger user base. You have to have the scale of the user base and that's the only way for a platform to make money, right? But to reach that you need to spend.
That's why we're going to this year, as I said, when we believe that the kind of products that we are designing or have been perfecting or developing are ready, have the right kind of stickiness to make the user stay, then we're going to spend.
As we did in video, kind of spending a little more on video on 2022. And we see the user base actually grow quite well. But so we're going to spend.
Okay both on people or to do that.
I see. Okay. All right. Thank you for your answer, Charles. Thank you. Thank you. As a reminder, to ask a question, please press star 1 1. All right. I am showing no further questions. And with that, we conclude today's conference call.
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