Q3 2023 Sohu.com Ltd Earnings Call

November 13, 2023

Okay.

Ladies and gentlemen, thank you for standing by and good evening. Thank you for joining say geez third quarter 2023 earnings conference call. At this time, all participants are in a listen only mode.

Speaker 1: Ladies and gentlemen thank you for standing by and good evening. Thank you for joining Sohu's third quarter 2023 earnings conference call. At this time all participants are in a listen only mode. After management's prepared marks there will be a Q&A session.

After managements prepared remarks, there will be a Q&A session.

Speaker 1: Today's conference call is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the conference over to your host for today's conference call, Huang Pu, Investor Relations Director of Sohu. Please go ahead.

<unk> 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 to Investor Relations Director. So he please go ahead.

Thanks, operator, thank you for joining us to discuss the quarter in Daytona.

Speaker 2: Thanks, Operator. Thank you for joining us to discuss SOHO's third quarter 2023 results. On the call are Chairman and Chief Executive Officer Dr. Charles Zhang, CFO Joanna Lee, and Vice President of Finance James Deng. Also with us are Chang, U.S. CEO Dylan Chen, and CFO Yao Bin Wang.

On the call are chairman and Chief Executive Officer, Dr. Charles Zhang CFO January and Vice President of Finance Gemstone also that as a child he doesn't say auto insurance and it's the F O b.

Speaker 2: Before management begins their prepared remarks, I would like to remind you of the comments they have as statements in connection with today's conference call. Except for the historical information contained herein, the matters discussed on this call may contain the following statements. These statements are based on current plans, estimates, and projections, and therefore you should not place undue reliance on them.

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 current class estimates and projections and therefore, you should not place undue reliance on them.

Forward looking statements Evo in helix and uncertainties, we caution you that a number of important saboteurs could cause actual results to differ materially from those containing any forward looking statements.

Speaker 2: Forelooking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results to differ maturely from those containing any forelooking statements.

Speaker 2: For more information about the potential risks and uncertainties, please refer to the company's files with the Securities and Exchange Commission, including the most recent annual report on Form 20-F. With that, I will now turn the call over to Dr. Charles Zhang. Charles, please proceed.

For more information about potential risks and uncertainties. Please refer to the company's filings with us at Cortez I think it's changed the 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, Tom and thank you everyone for joining our call.

Speaker 3: Thanks, Hong Po, and thank you, everyone, for joining our call.

Speaker 3: In the third quarter of 2023, we continue to improve our product offering and enhance operational efficiency.

In the third quarter 2023.

To improve our product offering and enhance.

Operational efficiency.

Speaker 3: Thanks to these efforts, we delivered both top and bottom line performance in line with our prior expectations.

Thanks to these efforts we delivered both top and bottom line performance in line with our prior expectations.

Speaker 3: At Soho Media Portal, we further refined our products and upgraded the user experience.

As Sohu media portal, we further refined our products and upgraded.

The experience.

Speaker 3: As for video, with our kin-engine strategy, we focused on the generation and distribution of compelling short-form content as well as live broadcast.

And so if a video with our engine strategy, we focused on the generation and distribution of compelling.

<unk> content as far as live broadcasts.

These efforts helped us further boost user engagement and social interactions.

Speaker 3: These efforts helped us further boost user engagement and social interaction.

Speaker 3: At the same time, benefiting from our unique content marketing campaigns, we continue to explore a diverse range of monetization opportunities that leverage our differentiated competitive advantages.

Same time benefiting from our unique content and marketing campaigns.

We continue to explore a diverse range of monetization opportunities that leverage our differentiated competitive advantages.

Speaker 3: For online games, with consistent release of new content updates and operational efforts, game revenues remain stable.

For online games.

With consistent release of new content updates and operational efforts game revenue.

Remain stable.

Before I go into more detail about our key financial results. Please be reminded that the bankruptcy proceeding for <unk> cinema advertising business concluded.

Speaker 3: Before I go into more detail about our key financial results, please be reminded that the bankruptcy proceedings for Changyou's cinema advertising business concluded during the quarter.

During the quarter.

Speaker 3: This release is related to continuing operations only.

This release is related to continuing operations only so.

Speaker 3: This includes the disposal, again, from the Chinese cinema and entertainment business.

This includes the disposable.

The proposal.

Again from the cinema advertising trying in the cinema.

It does.

Yes.

Speaker 3: So, for the third quarter of 2023, the total revenues were $145 million, down 22% year over year, and 4% quarter over quarter.

So for this quarter for the third quarter of 2023.

Total revenues were $145 million.

Down, 22% year over year, and 4% quarter over quarter.

Speaker 3: Brand advertising revenues $22 million, down 14% year-over-year, and 8% quarter-over-quarter.

Brand advertising revenues $22 million down, 14% year over year, and 8% quarter over quarter.

Online game revenues.

Speaker 3: or $117 million down 21% year over year and 1% quarter over quarter.

Or $117 million down, 21% at year over year, and 1% quarter over quarter.

Speaker 3: gap net loss attributable to Suhu.com Limited was $14 million compared with a net loss of $22 million in the third quarter of 2022 and a net loss of $21 million in the second quarter of 2023.

GAAP net loss attributable to Sohu Dot Com limited was $40 million.

Compared with a net loss of $22 million.

In the third quarter of 2022, and a net loss of $21 million in the second quarter of 2023.

non-GAAP net loss attributable to Sohu Dot Com limited was 10.

Speaker 3: non-gap net loss attributable to sohu.com limited was

Speaker 3: $10 million, compared with a net loss of $17 million in the third quarter of 2022, and a net loss of $18 million in the second quarter of the year.

$10 million compared with a net loss of $17 million in the third quarter of 2022, and a net loss of $18 million in the second quarter of this year.

So now let me go through our key businesses in more detail.

Speaker 3: So now let me go through our key businesses in more detail. First, MediaPortal.

First media portal and Sohu video.

Speaker 3: At Social Media Portal, we continue to upgrade our products and strengthen operational efficiency.

And so let me the portal, we continue to upgrade our products and the strengthened operational efficiency.

Speaker 3: We actively promoted the generation and social distribution of high-quality content through enhanced engagement and interaction.

We are actively promoting the generation and the social distribution of high quality content.

Through enhanced era, the engagement and interaction.

Speaker 3: was integrated cutting-edge technologies in her products, resulting in a better user experience for both audiences and content providers.

Those into integrated cutting edge technologies in her products, resulting in a better user experience for both audiences and Congress.

That's Super video our focus remains on executing the strategy twin engine strategy. We further diversified our long term long form content library.

Speaker 3: At Sohu Video, our focus remains on executing the team strategy, team engine strategy. We further diversified our long-term, long-form content library.

Speaker 3: and continuously promoted our unique live streamings and short form content.

And continuously promoted our unique live streaming and live streaming and short form content.

Speaker 3: We're committed to establishing a leading position in the field of knowledge and science-related live broadcasting.

We are committed to establishing a leading position in the field of knowledge and science related live broadcasting leveraging our distinctive IP.

Speaker 3: leveraging our distinctive IP, the Charles Physics class. And this IP has formed a multi-

Charles Physics class.

This IP has formed a margin.

Speaker 3: dimensional dissemination through live broadcasting, short videos, offline seminars, books, and other means.

Dimensional.

Dissemination through live broadcasting short videos offline seminars books and other means.

Speaker 3: which has driven considerable traffic and engagement on various topics across our platform.

Which has driven considerable traffic and engagement on various topics across our platforms.

Speaker 3: In addition, as a video social platform, we were also proactively attracting broadcasters and users across various fields by refining our broadcaster ecosystem and organizing events centered on hot topics.

In addition, as a video social platform, we were also proactively attracting.

Broadcasters and the users users across various fields by refining our broadcast Terry ecosystem and organizing events centered on hot topics such as the 2023, So who keep hop dancing Festival.

Speaker 3: such as the 2023 Soho K-pop Dancing Festival.

And 2023 broadcasters.

Speaker 3: and 2023 Soho Broadcasters Conference.

Broadcasters conference.

Sure.

So a user base user conference.

These <unk>.

Live broadcasting events enabled users to interact with each other online and offline and further enhanced their vitality and engagement on our social video platform.

On the monetization side, despite the advertising budgets.

Speaker 3: On the monetization side, despite the advertising budget remained cautious.

<unk> remained cautious.

Speaker 3: We closely follow the market trends and we're developing synergies between Sohu's product matrix and our advanced library.

We totally follow the market trend and we are developing synergies between so whose product matrix.

And our advanced live broadcasting technology.

Speaker 3: These efforts enabled us to execute unique high value marketing campaigns and unlock new monetization opportunities.

These efforts enabled us to execute the unique high value <unk>.

Marketing campaigns, and a large new monetization analog or new monetization opportunities.

Speaker 3: During the quarter, we hosted traditional and innovative events, such as Talk Under the Starry Sky. During the quarter, we hosted traditional and innovative events, such as Talk Under the Starry Sky.

During the quarter, we hosted traditional and.

Innovative events that has tuck under these there is sky.

Seemingly boswell.

But one plus one.

Speaker 3: high-end dialogue. These events have been...

Client dialogue these events have been.

Speaker 3: disseminated, disseminated across the various social media platforms, not only demonstrating.

Disseminated disseminated across various social media platforms not only.

Demonstrating.

Speaker 3: our influence as a mainstream media platform, but also effectively attracting millions of audiences and generating significant exposure for advertisers.

Our influence as a mainstream media platform that also effectively attracting millions of audiences.

Generating.

Significant exposure for advertisers.

Speaker 3: Now turning to the online game business, game revenues remained stable during the quarter, driven by consistent release of new content updates and robust game operations. Within our PC games business, we roll out promotional events for regular TLBB PC, and further...

Now turning to the online game business game revenues remained stable during the quarter driven by consistently release of new content updates and robust.

Game operations.

Within our PC games database, we rollout promotional events for our regular <unk>.

And <unk>.

Further optimized its character development system.

Speaker 3: With Tail Baby Vintage, we launched a month-long event during the Qixi Festival, which helped stabilize player engagement.

<unk> vintage we launched a month long event during the festival, which helped stabilize player engagement.

The Chinese Chinese Valentines day, and our mobile game business, we introduced a new strategic plan.

Speaker 3: Chinese Valentine's Day. In our mobile game business, we introduced a new strategic clan war game play mode for legacy TLBB mobile.

Strategic.

<unk> gameplay mode for legacy <unk> mobile.

Next quarter, we will launch the expansion packs and the content updates for the <unk> series.

Speaker 3: Next quarter we'll launch expansion packs and the comment updates for the TLBB series.

Speaker 3: and other titles to keep players engaged.

Other titles to keep players engaged.

Speaker 3: We'll stick to our top game strategy going forward as gaming technology advances rapidly and the market demand becomes deeper and more diversified.

We will stick to our top games strategy going forward as gaming technology as gaming technology advances rapidly in the market.

Demand becomes deeper and more diversified.

Speaker 3: We will explore new ideas to better meet the players' needs, allocate more resources for professional talent development, and invest in content and technology innovation in order to bring more high-quality games to the market.

We will explore new ideas to better meet the players' needs allocate more resources to professional talent development and invest in content and technology innovation in order to bring more high quality games to the market.

In terms of games pipelines pipeline, we will maintain our core competitiveness in mmorpgs, while also producing card based rpgs or sport and casual strat strategy game.

Speaker 3: In terms of games pipelines, pipelines will maintain our core competitiveness in MMORPGs.

Speaker 3: while also producing card-based RPGs or sports and casual strategy games.

So.

Speaker 3: Before I pass the call to Joanna to go through our financial results in detail, we are pleased to announce that on November 11, 2023, two days ago, our Board of Directors authorized a share repurchase program of up to $80 million, over $80 million.

Before I pass the call to drive towards our financial.

Results in detail.

We are pleased.

To adopt that.

On November 11, 2023 today.

Two days ago.

Our board of directors authorized share repurchase program of up to $80 million.

Over a two year period.

The repurchase program.

Speaker 3: The repurchase program underscores the continued confidence we have in our long-term growth prospects.

Scores.

Continued confidence we have in our long term growth prospects.

Speaker 3: as well as our ongoing commitment to increasing shareholder value.

As well as our ongoing commitment to increasing shareholder value.

So with that I'll now turn the call over to John <unk>. Please thank you.

Speaker 2: Thank you, Tom. I will now walk you through the key financials of our major segment for third quarter of 2023. All the numbers on a non-GAAP basis. You may find the reconfiliation of non-GAAP to GAAP measures on our IR website.

I will now walk you through the key financials of our major segments.

Third quarter of 2023.

All the numbers on a non-GAAP basis.

You may find a reconciliation of non-GAAP to GAAP measures.

Our IR website.

Speaker 4: For Social Media Portal, quarterly revenues were $16 million, compared with revenues $18 million in the same quarter last year.

For Sohu media portal quarterly revenues were $16 million compared with revenue of $80 million in the same quarter last year.

Speaker 4: The quarterly operating loss was $33 million.

The quarterly operating loss was $33 million.

Speaker 4: compared with operating loss of $39 million in the same quarter last year.

Compared with operating loss of $39 million in the same quarter last year.

For Sohu video.

Speaker 4: For SOHO Video, quarterly revenues were $11 million, compared with revenue of $60 million in the same quarter last year. Quarterly operating loss was.

Quarterly revenues were $11 million compared with revenue of $60 million in the same quarter last year.

Quarterly operating loss was $33 million.

Speaker 4: compared with an operating loss of $31 million in the same quarter last year.

Compared with operating loss of $31 million in the same quarter last year.

So Charles I'll like in business and the 171 73.

Speaker 4: for Changyou's online game business and 17173. Quarterly revenues are $180,000.

Quarterly revenues of $180 million.

Speaker 4: compared with revenues $150 million in the same quarter last year.

Compared with revenue of $115 million in the same quarter last year.

Speaker 4: Quarterly operating profit was $52 million, compared with the operating profit of $58 million in the same quarter last year. For the fourth quarter of 2020.

Quarterly operating profit was $52 million compared.

Compared with operating profit of $58 million in the same quarter last year.

For the first quarter of 2023.

We expect.

Speaker 4: Brand advertising revenues to be between $20 million and $23 million.

Brand advertising revenues to be between $20 million and.

The $23 million.

Speaker 4: This impacts annual decrease of 20% to 31%.

And this impact annual decrease of 20%.

31%.

Speaker 4: and a sequential decrease of 9% to a sequential increase of 4%.

The sequential decrease of 9% sequentially.

The sequential increase of 4%.

Speaker 4: Unlike in revenues to be between $106 million and $106 million.

Unlike in revenues to be between $106 million.

And the $116 million.

Speaker 4: This implies annual decrease of 4% to 13%.

This implies annual decrease of 4%.

10%.

Speaker 4: and a sequential decrease of 1% to 9%.

And a sequential decrease of 1% to 9%.

Speaker 4: non-gap debt loss attributable to SOHO dot-com limit.

non-GAAP net loss attributable to Sohu Com limited.

Speaker 4: to be between $10 million and $20 million.

To be between $10 million.

And the $20 million.

Speaker 4: and GAMPSAT loss attributable to SOHO.com Limited.

And the GAAP net loss attributable to Sohu Dot Com limited.

Speaker 4: to be between $30 million and $23 million.

To be between $30 million.

$23 million.

Speaker 4: This forecast reflects focus management current and the preliminary view, which is subject to substantial uncertainty.

This forecast reflects management's current and preliminary view.

Which is subject to substantial uncertainty.

This concludes our prepared remarks.

Speaker 4: Operator, we would now like to open the call to questions.

Operator.

I would now like to open the call to questions.

Speaker 1: Thank you. To ask a question you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question please press star 1 and 1 again.

Thank you to ask a question you will need to press star one and one on your telephone and wait for your name to be announced.

To withdraw your question. Please press star one on one again.

Speaker 1: Please stand by while we compile the Q&A queue.

Please stand by while we compile the Q&A queue.

Speaker 1: Our first question comes from the line of Thomas Chong from Jeffreys, please go ahead.

Our first question comes from the line of Thomas Chong from Jefferies. Please go ahead.

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

Speaker 3: Hi, good evening. Thanks management for taking my questions. My first question is relating to the advertising business.

Our first question is relating to the advertising business.

Speaker 3: I saw our Q4 revenue guidance for brand advertising.

I saw our Q4.

Guidance for brand advertising.

Speaker 3: sequential down 9% to 4% growth at the high end. So I just want to get some color from Charles, if I may know about the October and so far the performance in November . Under what situation should we expect it to be down by 9% or is that a conservative guidance?

Sequential down 9%.

<unk>, 4%.

At the high end, so I just wanted to get some color from Charles if I may know about the October and so far the performance in November.

I'm, Bob Walsh situations should we expect it to be bang by 1%.

Have you set a conservative guidance and my second question.

Speaker 3: And my second question is relating to AIGC. Given that everyone, I think, talks about how AI can help to drive the conversion, the content creation, just want to get some color from Sohu perspective.

<unk> two.

<unk>.

Given that.

Everyone talks.

<unk> talked about how AI can help to drive the conversion of the contract duration just wanted to get some color from Soho perspective.

Speaker 3: our strategies in common quarters. And sorry, and finally, may I also ask a quick follow-up, it's more relating to 2024 online advertising outlook. Thank you.

Our strategies in coming quarters, and I'm, sorry, and finally May I also.

Ask a quick follow up you small relating to 2020 for online advertising outlook. Thank you.

Speaker 3: All right, so the Q4 forecast is, I think it's, we just, we are, we are providing a wrench.

Alright.

Q4 forecast is I think it's just that we are we were aware.

Rent and.

Speaker 3: And Q4 is quite similar to Q3, right? And there's nothing. It's still a macroeconomic situation. It's really kind of bad. And we're trying to have some innovative marketing campaigns and events that attract advertisers so that in Q4, we have about the equilibrium.

Q4 is quite similar to Q3 and there is nothing it still.

The macroeconomic situation is really kind of bad.

We're trying to.

Have some innovative.

Marketing campaigns events that attract advertisers.

So that in Q4, we have about.

The accrued.

Yes.

About.

Equal number.

Speaker 3: events or content activities, like the Soho Fashion Ceremony, and also the Finance Conference. And also we have a few others, like the K-pop Festival, the National Contest, and all these things. So I think the Q4 is similar to Q3. We're just providing a wrench.

Events.

Or content activities.

Like the Sohu fashion so profession.

Yes, so confession ceremony and also the.

Finance conference.

And also we have a few others.

Like the key pop festival.

The nation National contest and other things. So I think the Q4 similar to Q3, it would just providing a range.

The AIG C.

Speaker 3: The AIGC, I think it's only had some incremental improve with the application of AIGC to our content generation. And it's only now have a kind of incremental improvement of efficiency of content creation. But so far, it's not getting any major impact on our business side, positive impact on business side yet. So, I think it's only now have a kind of incremental improvement of efficiency of content creation.

I think it's the only have some incremental.

Improved with the application of the AGC to our content generation and it's only have now have for kind of.

Incremental.

Improvement of efficiency of content creation, but it's not.

So far it's not getting any.

Okay.

As major impact on our business side, a positive impact on business at yet.

With basically likes the video content that we have a better with AI technology, we have better.

Speaker 3: with basically like the video content we have a better with the AI technology you have better the titles words and translations and the voice

Titles words and transitions.

The voice.

Speaker 5: a voice to our words. And also for articles, we have.

<unk>.

Words.

And also for articles.

Speaker 5: using AIGC to summarize, to write, to summarize the abstract.

Using AGC to summarize too right.

To summarize.

Abstracts.

Speaker 3: of the articles, so it's not a big deal yet.

Of the articles so it's not a big deal yet.

Speaker 3: Got it. Thank you, Charles. May I also ask a very quick follow-up question is relating to how we should think about the advertising market in 2024? Any preliminary discussion? Yes, 2024. Do we have any preliminary discussion with the advertisers yet about next year's spending? Thank you.

Got it thank you Charles.

So osten ill be quick follow up question is relating to.

How we should think about the advertising market in China.

The PD movie discussion, yes, I tried to turn the call do you have any PD moment discussion with.

With the advertisers yet.

Next year spending thank you.

Speaker 3: Yeah, I think overall the microeconomy is doing not that good.

Yes, I think overall the macroeconomic.

Micro economy is doing not that good.

And.

So, especially for example.

Speaker 5: So especially, for example, there is the auto industry, which consists of a quarter of 25% of our advertising base. The marketers are more cautious now in spending, because across all the businesses, people are spending less, because people have

The auto industry, which.

Consistent.

Quarter of 25% of our advertising base.

The.

Marketers are more cautious now in spending.

Because of the.

Across all the businesses.

People are spending less.

Because people have.

Speaker 3: Consumers have limited disposable income to spend.

Consumers have limited.

<unk> of income to spend.

Speaker 3: So, in this situation, the advertisers tend to, you know, the...

So so.

In this situation.

Advertisers tend to set.

Tend to center there.

Speaker 5: tend to center their budgets around some top tier user base, top tier platform. So with Soho's current user base, we're not in a top tier. So that we have to have this kind of innovative events and campaigns and others to attract the brand advisors. So.

<unk>.

Around some top tier user base top tier platform.

So with <unk> current user base.

It was not.

Top tier.

We have to have this kind of innovative events and campaigns and others to attract the brand advertisers.

So.

Speaker 5: Unless we have, so I think the next year, 24, things will be similar and.

Unless we have so I think the next year 24, it seems will be similar.

Unless we have our.

Speaker 3: Unless we have our social news and social portal, I mean, social portal and social news and social video have really the uptake or the social media platform, the social video, social media platform.

So who knows and Sohu portal, and Silverado and Sohu news and video.

Really the.

Uptake.

Or.

The social media platform, so social video.

Social media platform.

Speaker 3: have a major rise or explosive growth of user base. I think 2024 will be similar to 2023. But we definitely have some.

They are a major.

Rise or.

Explosive growth of user base.

2024 will be similar to 'twenty three.

But we definitely have some.

Speaker 5: some hope that in 2024, our social.

Some hope that 2024 hour total meet.

Speaker 5: media strategy will have some positive, you know, hope, yeah.

Media strategy will have some.

Positive.

Hope yes.

To expand rapidly.

Got it thank you Charles.

Okay.

Speaker 1: Thank you. We'll now move on to our next question.

Thank you we will now move onto our next question.

Okay.

Our next question comes from the line of Alicia Yapp from Citigroup. Please go ahead.

Speaker 1: Our next question comes from the line of Alicia Yap from Citigroup. Please go ahead.

Speaker 2: Hello, thank you. Good evening, Charles, Johanna, and team. Thanks for taking my questions. I have three questions. First, I wanted to follow up on the comment, Charles, you just mentioned for the 4Q advertising outlook. Would you say the macro situation is improving from what you are seeing in 3Q or about similar? Or is it no improvement and is it not getting worse in 4Q? So just any color as you compare to what you saw in 3Q would be great.

Hello. Thank you good evening, Charles Johanna and team Thanks for taking my questions.

Today's question first I wanted to just follow up on the comment Charles you just mentioned for the for Q.

Advertising outlook.

As you say the macro situation is.

Improving from what you are seeing in <unk> or about similar or is it.

No improvement and is it not getting worse in <unk>. So just any color as to compared to what you saw in Q1.

Speaker 6: So that's the first question.

So that's the first question.

Speaker 7: Well, the I think in Q4.

Well.

I think in Q4.

Speaker 5: The internet service will have some improvement, right? Because the Q3 is kind of a.

The Internet service, we will have some we'll have some improvement.

Q3 is kind of a.

Speaker 7: It's a slow season for internet services. Like Q4, that was W11, right? And e-commerce.

Slow season for insurance services.

Like Q4.

And e-commerce.

Speaker 5: And but overall, the auto industry has been contracting. I mean, people are not spending because of competition and less budget and because of the cost.

<unk>.

But overall the auto industry has been contracting I mean people are not spending because of the competition.

Right.

And because of the car sales.

Speaker 3: is not as robust. So they are becoming more cautious in promoting their products or sales. Well, some industries, like fast-moving consumer goods industry, FMCG industry, seems they're spending more.

Not as robust so there are.

Coming more cautious in promoting.

Our products ourselves.

Well, the some industries like fast moving consumer goods industry <unk> industry seems have.

There is there anymore.

Speaker 5: typical of an economic downturn, right? People are drinking more, right? Drinking wines, consuming leisure time, and spending small items, right? So FMCG only has some bright spots.

Typical economic downturn right people are drinking more drinking wines are consuming leisure time.

And then in smaller small items right. So that's.

<unk> is only.

Hum.

Had some bright spots.

Okay.

I see I see thats very helpful.

Speaker 6: I see, I see. That's very helpful. So second question is related to the games guidance for the 4Q. I think I thought you mentioned there will be some expansion pack content update for TRBB series. So just wondering, what's the reasons for the games guidance to also experience sequential decline?

Second question is related to the games.

Florida for Q I think I thought you mentioned there will be some.

Pension pack content updates for <unk>. So just wondering what the reasons for the gain guidance to also SPV sequential decline.

Okay.

Speaker 8: When you also look you see the 3, good 3, and then you go showlow your counil relction ill out P be high E on the equation part.

Glen.

We will see the Sidoti Hello.

Councillor cannibalism.

This is actually bill on the wholesale channel.

Yes.

Speaker 8: I finished the most because i got a single kill from my Q

On behalf of <unk>.

Psychosis.

Alan.

Speaker 8: Most of the old games will have a natural sound.

LLC.

So danielle.

Sure.

Speaker 9: due to most of our older games will have a natural decline in the fourth quarter.

And then due to most of our older games will have natural decline in the fourth quarter.

Yes.

Speaker 8: And Q4 files aren't that big So it... Thanks for watching!

Okay.

Is it a set of handcuffs placebo Donaldson elsewhere.

Okay.

Sure.

Particularly.

Got it.

Speaker 9: The content updates in the fourth quarter are not major ones, so they cannot offset the natural declines from the game revenue.

So the update content, obviously in the fourth quarter are not major ones. So they cannot offset the natural declines from the game revenue.

Speaker 6: Can I follow up on that one? Is that so when you have new games launched next year, then we should assume to see some sequential growth, right, in the coming quarters beyond 4Q?

Okay can I follow up on that one is that.

So when you have new games launch next year, then we should assume to see some sequential growth in the coming quarters beyond Q.

Speaker 10: So if there is a new game coming out in the future, there will be a situation where the currency will go up. Yes.

Okay.

Hardly a seniors with Sunshine heart and that was currently Colombia component.

Yes.

<unk>.

The clean you currently see.

C caution.

Hum.

Yes.

Speaker 9: Yes, typically yes, but it also depends on the performance of the new game launched.

Typically yes.

It also depends on the performance of the new game launched.

Okay. Thank you.

My My last question.

Speaker 6: My last question is on your share buyback. So it is great that we are seeing this 80 million buyback that newly authorized. Just assuming if we are using

On your share buyback. So it is great that we have.

<unk>.

That that newly authorized.

Just assuming if we.

Using.

Speaker 6: finish up all the 80 million, just wondering what's the, you know, next plan that management may have. Would that be more buyback down the road if we finish that 80 million, or is that will be some other things that you are thinking? Thank you.

Finish up all of that $80 million.

Just wondering what the.

Your next plant that management may have would that be more buyback down overall, if we finish that $80 million or is that will be some other things that you are thinking thank you.

Speaker 5: Well, we'll first execute this $80 million buyback, right? And then we'll think, we'll do that next. I think.

Well, we were forced to execute this $80 million buyback rate and then we're seeing.

With that next.

I think.

Our focus is still on.

Speaker 7: Our focus is still on really to really make sure.

Really.

To really make sure.

Sure.

Speaker 5: our business grow and our social network strategy work.

Our business grow and.

Our social network.

Our strategy works.

Speaker 3: So there will be, actually we haven't, we've been refining our products, both the social video and the social news. And the battle to be, to really, you know, to grow, to really grow our user base has not started. We've been refining our products and spending, so we definitely need the watch app to continue.

So there will be actually we haven't.

In refining our product video and Sohu news.

And.

The battle to be too.

Really.

Who grow to really grow our user base has now started.

Finding our products and the spending.

So we definitely need the watch has the tubes continued to launch right.

Speaker 5: to launch the major product, I mean, to expand, to grow.

The major product.

We intend to grow our products user base.

So thats.

Speaker 3: So that's, and we're confident actually, so that's why.

And we are confident actually so that's why.

And also gaming and yeah.

Speaker 3: And also gaming, and yeah. So once the social media and social video user base grow, I would say, I hope exponentially. Because social network, that's the way it grows. It stays flat, and then suddenly you got the product right and explode, or grow exponentially. And we hope that day will come.

Once the Sohu media, so video user base grow.

I would say I hope, we exponentially because social network.

That's it.

The weighted growth is stay flat and then suddenly you've got the product right and explode or grow exponentially and we hope that they will come.

Speaker 5: And then our advertising data will grow, because it's all tied with this user base.

And then alright, I'm hanging Donna will grow because it's all tied in.

Some user.

User base.

Scale.

And also we will.

I hope that our game gaming room.

Speaker 5: I hope that our game will be even better in the future.

Even better in the future.

Speaker 6: I see. All right. Good. Thank you, Charles.

I see alright. Thank.

Thank you Tom.

Thank you.

Speaker 1: Once again, to ask a question, please press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Please stand by while we wait for further questions.

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Thank you as there are no further questions at this time. This concludes today's conference call. Thank you for participating you may now disconnect speakers. Please standby.

Speaker 1: Thank you. As there are no further questions at this time, this concludes today's conference call. Thank you for participating. You may now disconnect. Speakers please stand by.

Thank you.

Okay.

[music].

Yes.

[music].

<unk>.

[music].

Yes.

[music].

Speaker 2: ? ? ? ? ? ? ? ? ? ? ? ? ? Ladies and gentlemen, thank you for standing by and good evening. Thank you for joining SOHU's third quarter 2023 earnings conference call. At this time all participants are in a listen only mode. After management's prepared marks, there will be a Q&A session. Today's conference call is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the conference over to your host for today's conference call, Huang Pu, Investor Relations Director of SOHU. Please go ahead. Thanks, operator. Thank you for joining us to discuss SOHU's third quarter 2023.

Speaker 11: Thank you for watching!

Ladies and gentleman. Thank you for standing by and good evening. Thank you for joining <unk> third quarter 2023 earnings conference call. At this time all participants are in a listen only mode. After management's prepared remarks, there will be a Q&A session.

Today's conference call is being recorded if you have.

Have any objections you may disconnect at this time I would.

I'd now like to turn the conference over to your host for today's conference call quantity Investor Relations Director of <unk>. Please go ahead.

Speaker 2: Thanks, operator. Thank you for joining us to discuss SOHO's third quarter 2023 results. On the call are Chairman and Chief Executive Officer Dr. Charles Zhang, CFO John Lee, and Vice-President of Finance James Deng. Also with us are Chang-Yu C.O. Doren Chen and CFO Yao Bing Wang.

Thanks, operator, thank you for joining us to discuss <unk> third quarter results on the call are chairman and Chief Executive Officer, Dr. Charles Zhang CFO, Joanna Lv and Vice President of Finance Gemstone also vivek, Tony as the auto and churn in his CFO youll been wrong before.

Speaker 2: Before measurements begin their prepared remarks, I would like to remind you of the comments they have as statements in connection with today's conference call. Except for the historical information contained herein, the matters discussed on this call may contain following statements. These statements are based on current plans, estimates, and projections, and therefore you should not place undue reliance on them.

Before management begins their prepared remarks, I would like to remind you of the Companys Safe Harbor statement.

With todays conference call.

For the historical information contained herein the matters discussed on this call may contain forward looking statements.

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 potential risks and uncertainties. Please refer to the Companys filings with the Securities and Exchange Commission, including the most recent annual report on form 20-F with that.

I will now turn the call over to Dr. Charles Zhang Charles Please proceed.

Speaker 5: Thanks, Hong Po, and thank you, everyone, for joining our call.

Thanks, Tom.

Thank you everyone for joining our call.

Speaker 3: In the third quarter of 2023, we continue to improve our product offering and enhance operational efficiency.

In the third quarter of 2023.

To improve our product offering and enhance operational efficiency.

Speaker 5: Thanks to these efforts, we delivered both top and bottom line performance in line with our prior expectations.

Thanks to these efforts we delivered both top and bottom line performance in line with our prior guidance expectations.

Speaker 5: At Soho Media Portal, we further refined our products and upgraded the user experience.

As the old media portal, we further refined our products and upgraded.

The user experience.

Speaker 3: As for video, with our Kin Engine strategy, we focused on the generation and distribution of compelling short-form content as well as live broadcast.

And so if a video with our engine strategy, we focused on the generation and distribution of compelling.

Content live broadcasts.

Speaker 3: These efforts helped us further boost user engagement and social interactions. Same time, benefiting from our unique content marketing campaigns, we continue to explore a diverse range of monetization opportunities that leverage our differentiated competitive advantage.

These efforts helped us further boost user engagement and social interactions.

Same time benefiting from our unique content and marketing campaigns.

We continue to explore our diverse brand direct monetization opportunities that leverage our differentiated competitive advantages.

Carl on game.

Speaker 3: For online games, with consistent release of new content updates and operational efforts, game revenues remain stable.

With consistently release of new content and updates and operational efforts game revenue.

Demand is stable.

Speaker 5: Before I go into more detail of our key financial results, please be reminded that the bankruptcy proceedings for Changyou's cinema advertising business concluded during the quarter.

Before I go into more detail of our key financial results. Please be reminded that the bankruptcy proceeding.

Cinema advertising business concluded.

During the quarter.

Speaker 3: This release is related to continuing operations only.

This release is related to continuing operations only.

Speaker 5: This includes the disposal, again, from the Chinese cinema and entertainment business.

This includes the disposable.

Disposal.

Again from.

Turning to the cinema advertising business.

Yes.

Speaker 7: So, for the third quarter of 2023, the total revenues were $145 million, down 22% year over year, and 4% quarter over quarter.

So for this quarter for the third quarter of 2023.

Total revenues were $145 million.

22% year over year, and 4% quarter over quarter.

Speaker 5: Brand advertising revenues $22 million, down 14% year-over-year, and 8% quarter-over-quarter.

Brand advertising revenues $22 million down, 14% year over year, and 8% quarter over quarter.

Online game revenues.

Speaker 5: or $117 million down 21% year over year and 1% quarter over quarter.

Or $117 million down 21% at year over year in the 1% quarter over quarter.

GAAP net loss attributable to Sohu Dot Com limited was $40 million.

Compared with a net loss of $22 million.

In the third quarter of 2022, and a net loss of $21 million in the second quarter of 2023.

Speaker 3: non-gap net loss attributable to sohu.com limited was

non-GAAP net loss attributable to Sohu Dot Com limited.

Yes.

Speaker 3: $10 million, compared with a net loss of $17 million in the third quarter of 2022, and a net loss of $18 million in the second quarter.

$10 million.

Compare with a net loss of $17 million in the third quarter of 2022.

Our net loss of $18 million in the second quarter of this year.

Okay.

Speaker 3: So now let me go through our key businesses in more detail. First, MediaPortal.

So now let me go through our key businesses in more detail.

First media portal and video.

Speaker 3: At Socomedia Portal, we continue to upgrade our products and strengthen operational efficiency.

And so let me the portal, we continue to upgrade our products and the strengthened operational efficiency.

Speaker 3: We actively promoted the generation and social distribution of high-quality content through enhanced engagement and interaction.

We're actively promoting the generation and the social distribution of high quality content.

Through enhanced engagement and interaction.

Speaker 5: those integrated cutting-edge technologies in our products, resulting in a better user experience for both audiences and content providers.

Those into integrated cutting edge technologies in our products, resulting in a better user experience for both audiences and Congress.

Speaker 3: At Soho Video, our focus remains on executing the team strategy, team engine strategy. We further diversified our long-term, long-form content library.

And Sohu video our focus remains on executing this strategy twin engine strategy. We further diversified our long term long form content library.

Speaker 3: and continuously promoted our unique live streamings and short form content.

And the continuously promoted our unique live streaming and live streaming and short form content.

Speaker 3: We're committed to establishing a leading position in the field of knowledge and science-related live broadcasting.

We are committed to establishing a leading position in a few of knowledge and science related live broadcasting leveraging our tentative IP.

Speaker 3: leveraging our distinctive IP, the Charles Physics class. And this IP has formed a multi-

Charles Physics class.

This IP has performed a market.

Speaker 3: dimensional dissemination through live broadcasting, short videos, offline seminars, books, and other means.

Dimensional.

Dissemination through live broadcasting short videos offline seminars books and other means.

Speaker 3: which has driven considerable traffic and engagement on various topics across our platform.

Which has driven considerable traffic and engagement on various topics across our platforms.

Addition of video social platform, we were also proactively attracting.

Casters and a user users across severe fuse by refining our broadcast sturdy ecosystem and organizing events centered on hot topics.

Speaker 3: such as the 2023 Soho K-pop Dancing Festival.

Such as the 2023, so keep hop Dancing Festival.

Speaker 3: and 2023 Soho Broadcasters Conference.

And 2023, so broadcasters conference.

Sure.

So user basically user conference.

Speaker 3: These live broadcasting events enabled users to interact with each other online and offline, and further enhanced their vitality and engagement on the social video platform.

These.

Live broadcasting events enabled users to interact with each other online and offline and further has thereby <unk> and engagement on our social video platform.

Speaker 3: On the monetization side, despite the advertising budget remained cautious.

On the monetization side, despite the advertising budgets.

<unk> remained cautious.

Speaker 3: We closely follow the market trends and we're developing synergies between Sohu's product matrix and our advanced library.

I totally followed the market trend and we are developing synergies between those product matrix.

And our advanced live broadcasting technology.

Speaker 3: These efforts enabled us to execute unique high value marketing campaigns and unlock new monetization opportunities.

These efforts enable us to execute the unique high value.

Marketing Pam has a log monetization analog or new monetization opportunities.

During the quarter, we hosted traditional and innovative events that has talk under these there is sky.

So you only have to do.

In advanced one plus one.

Speaker 3: uh high-end dialogue these events have been

Hi, and dialogue.

<unk> have been.

Speaker 3: disseminated, disseminated across the various social media platforms, not only demonstrating.

Disseminated disseminated across various social media platforms not only.

Demonstrating.

Speaker 3: our influence as a mainstream media platform, but also effectively attracting millions of audiences and generating significant exposure for advertisers.

Our influence as a mainstream media platform, but also effectively attracting millions of audiences and generating.

Significantly exposure for advertisers.

Now turning to the online game business, game revenues remained stable during the quarter, driven by consistent release of new content updates and robust game operations. Within our PC games business, we roll out promotional events for regular TLBB PC and further...

Now turning to the online game business game revenues remained stable during the quarter driven by consistently release of new content updates and robust.

Game operations.

Within our PC games business.

Rollout promotional events for our regular <unk>.

And.

Further optimized its character development and system.

With Tail Baby Vintage, we launched a month-long event during the Qixi Festival, which helped stabilize player engagement.

We are terribly be vintage we launched a month long event during the TCE Festival, which helped stabilize player engagement.

Chinese Valentine's Day. In our mobile game business, we introduced a new strategic clan war game play mode for legacy TLBB mobile.

The Chinese she's attorneys Carlin.

And our mobile game business, we introduced a new strategic plan.

New strategic.

<unk> gameplay mode for legacy <unk> mobile.

Next quarter we'll launch expansion packs and the comment updates for the TLBB series.

Next quarter, we will launch the expansion packs and updates for the <unk> series.

and other titles to keep players engaged.

And other titles to keep players engaged.

We will stick to our top game strategy going forward as gaming technology advances rapidly and the market demand becomes deeper and more diversified.

Let's stick to our top game strategy going forward as the gaming.

As gaming technology advances rapidly in the market.

Men become deeper and more diversified.

We will explore new ideas to better meet the players' needs, allocate more resources for professional talent development, and invest in content and technology innovation in order to bring more high-quality games to the market.

We will explore new ideas to better meet the player needs allocate more resources to professional talent development and invest in content and technology innovation in order to bring more high quality games to the market.

In terms of games pipelines, pipelines will maintain our core competitiveness in MMORPGs.

In terms <unk>.

James pipelines pipeline, we will maintain our core competitiveness in mmorpgs.

while also producing card-based RPGs or sports and casual strategy games.

While also producing card based Rpgs.

<unk> and casual and strategy games.

So.

Before I pass the call to Joanna to post our financial results in detail, we are pleased to announce that on November 11, 2023, two days ago, our Board of Directors authorized the Share Repurchase Program of up to $80 million, over $80 million.

Before I pass the call to drive towards our financial.

Results in detail.

We are pleased.

To that.

November 11 2023 today.

Two days ago.

Our board of directors authorized share repurchase program of up to $80 million.

Over a two year period.

The repurchase program underscores the continued confidence we have in our long-term growth prospects.

The repurchase program.

This quarter the <unk>.

Continued confidence we have in our long term growth prospects.

as well as our ongoing commitment to increasing shareholder value.

As well as our ongoing commitment to increasing shareholder value.

So with that I'll now turn the call over to drive that please thank you Tom.

Thank you, Tom. I will now walk you through the key financials of our major segments for the third quarter of 2023. All the numbers on a non-GAAP basis. You may find the reconciliation of non-GAAP to GAAP measures on our website.

We will now walk you through the key financials of our major segments with third quarter of 2023.

All the numbers on a non-GAAP basis.

You may find a reconciliation of non-GAAP to GAAP measures.

Our IR website.

For social media portal, quarterly revenues were $16 million, compared with revenues $18 million in the same quarter last year.

For Sohu media portal quarterly revenues were $16 million compared with revenue of $80 million in the same quarter last year.

The quarterly operating loss was $33 million.

compared with the operating loss of $39 million in the same quarter last year.

Compared with operating loss of $39 million in the same quarter last year.

For SOHO Video, quarterly revenues were $11 million, compared with revenue of $60 million in the same quarter last year. Quarterly operating loss was.

For Sohu video quarterly revenues were $11 million.

Compared with revenue of $60 million in the same quarter last year.

Quarterly operating loss was $33 million.

compared with an operating loss of $31 million in the same quarter last year.

Compared with operating loss of $31 million in the same quarter last year.

for Changyou's online game business and 17173. Quarterly revenues are $180,000.

So Charles all I game business and the 171 73.

Quarterly revenues of $180 million.

compared with revenues $150 million in the same quarter last year.

<unk> with revenues of $115 million in the same quarter last year.

Quarterly operating profit was $52 million, compared with the operating profit of $58 million in the same quarter last year. For the fourth quarter of 2020.

Quarterly operating profit was $52 million.

Paired with operating profit of $58 million in the same quarter last year.

For the fourth quarter of 2023, we expect.

Brand advertising revenues to be between $20 million and $23 million.

Brand advertising revenues to be between $20 million.

The $23 million.

This impacts annual decrease of 20 percent to 31 percent.

This impasse annual decrease of 20%.

31%.

and a sequential decrease of 9% to a sequential increase of 4%.

The sequential decrease of 9% plus.

Sequential increase of 4%.

Unlike in revenues, to be between $106 million and $160 million.

Online game revenues to be between $106 million.

$116 million.

This implies annual decrease of 4% to 13%.

This implies annual decrease of 4%.

13%.

and a sequential decrease of 1% to 9%.

The sequential decrease of 1% to 9%.

non-gap debt loss attributable to SOHO dot-com limits.

non-GAAP net loss attributable to Sohu Com limited.

to be between $10 million and $20 million.

To be between $10 million.

The $20 million.

and GAMPSAT laws attributable to Soho.com Limited.

And the GAAP net loss attributable to Sohu Dot Com limited.

to be between $30 million and $23 million.

To be between $30 million and.

And the $23 million.

This forecast reflects SOCUS management current and preliminary view, which is subject to substantial uncertainty.

This forecast reflects management's current and preliminary view.

Which is subject to substantial uncertainties.

This concludes our prepared remarks.

Operator, we would now like to open the call to questions.

Operator.

I would now like to open the call to questions.

Thank you. To ask a question you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question please press star 1 and 1 again.

Thank you to ask a question you will need to press star one and one on your telephone and wait for your name to be announced to withdraw. Your question. Please press star one on one again.

Please stand by while we compile the Q&A queue.

Please standby, while we compile the Q&A queue.

Our first question comes from the line of Thomas Chong from Jeffreys, please go ahead.

Our first question comes from the line of Thomas Chong from Jefferies. Please go ahead.

Hi, good evening. Thanks management for taking my questions. My first question is relating to the advertising business.

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

My first question is relating to the advertising business.

I saw our Q4 revenue guidance for brand advertising.

sequential down 9% to 4% growth at the high end. So I just want to get some color from Charles, if I may know about the October and so far the performance in November . Under what situation should we expect it to be down by 9% or is that a conservative guidance?

Sequential Bang, 9%.

Two 4%.

At the high end, so I just wanted to get some color from Charles.

I may know about the October and so far the performance in November.

Yes.

Situation should we expect it to be Bang by line percent.

Or would you start cornerstone potatoes guidance and my second question just relating to AIG.

And my second question is relating to AIGC. Given that everyone, I think, talks about how AI can help to drive the conversion, the content creation, just want to get some color from Sohu perspective.

Given that.

Everyone talks.

Talks about how AI can help to drive the conversion of content creation, just wanted to get some color Paul Sullivan with Barclays.

our strategies in common quarters. And sorry, and finally, may I also ask a quick follow-up, it's more relating to 2024 online advertising outlook. Thank you.

Our strategies in coming quarters, and I'm, sorry, and finally May I also.

Ask a quick follow up you small relating to 2000 to tender for online advertising outlook. Thank you.

All right, so the Q4 forecast is, I think it's just that we are providing a wrench.

Alright.

Q4 forecast is I think we just we are we were aware.

Hiding I rent in Q4, it's quite similar to Q3 right.

And Q4 is quite similar to Q3, right? And there's nothing. It's still a macroeconomic situation. It's really kind of bad. And we're trying to have some innovative marketing campaigns and events that attract advertisers so that in Q4, we have about the equilibrium, about, you know.

There is nothing it still.

The macroeconomic situation is really kind of bad.

We're trying to.

Have some innovative.

Marketing campaigns events that attract advertisers.

So that in Q4, we have.

About the equipment.

About.

Equal number of.

events or content activities, like the Soho Fashion Ceremony, and also the Finance Conference. And also we have a few others, like the K-pop Festival, the National Contest, and all these things. So I think Q4 is similar to Q3. We're just providing a wrench.

Events.

Our content and activities.

Like the Sohu fashion so profession.

Yes, so confession ceremony.

And also the.

Finance conference.

And also we have a few others.

Like the keep hop festival.

The nation National contests, and all these things so I think the Q4 similar to Q3, it would just providing a range.

Yes.

<unk>.

The AIGC, I think it's only had some incremental improvement with the application of AIGC to our content generation. And it's only now have a kind of incremental improvement of efficiency of content creation. But so far, it's not getting any major impact on our business side, positive impact on business side yet.

The AIG C.

I think it's the only have some incremental.

Improved with the application of <unk> to our content generation and it's only have now have a kind of.

Incremental.

Improvement of efficiency of content creation, but it's not.

So far it's not getting any.

Okay.

As a major impact on our business either positively impact our business yet.

with basically like the video content we have a better with the AI technology you have better the titles words and translations and the voice

With basically likes the video content do we have a better.

The AI technology, we have better.

Titles awards and transitions and the voice.

a voice to our words. And also for articles, we have.

<unk>.

Words.

And also for articles.

using AIGC to summarize, to write, to summarize the abstract.

Using a GC to summarize too right.

The Sunrise.

Abstracts.

of the articles, so it's not a big deal yet.

Of the articles so it's not a big deal yet.

I got it. Thank you, Charles. May I also ask a very quick follow-up question is relating to how we should think about the advertising market in 2024? Any preliminary discussion? Yes, 2024. Do we have any preliminary discussion with the advertisers yet about next year's spending? Thank you.

Got it thanks, which house up May also ask a quick follow up question is relating to.

How we should think about the advertising market in China Kenneth Lee.

PD movie discussion, yes, I tried to turn the call.

Do you have any PD Malawi discussion.

With the advertisers yet.

Yes. Thank you.

Yeah, I think overall the microeconomy is doing not that good.

Yes, I think overall the macroeconomic.

Micro economy is doing not that good.

And.

So especially, for example, there is the auto industry, which consists of a quarter of 25% of our advertising base. The marketers are more cautious now in spending, because across all the businesses, people are spending less, because people have

So, especially for example.

The auto industry, which.

Consistent.

Quarter of 25% of our advertising base.

The.

Marketers are more cautious in spending.

Because of the.

Across all the businesses.

People are spending less.

Because people have.

Consumers have limited disposable income to spend.

Consumers have limited.

Disposable income to spend.

So, in this situation, the advertisers tend to, you know, the...

So so.

In this situation the advertisers.

Two setting.

tend to center their budgets around some top tier user base, top tier platform. So with Soho's current user base, we're not in a top tier, so that we have to have this kind of innovative events and campaigns and others to attract the brand advertisers. So.

Tend to center there.

<unk>.

Around some top tier user base top tier platform.

So with <unk> current user base.

It was not.

Top tier.

So that we have to have this kind of innovative events and campaigns and others to attract the brand advertisers.

So.

And this, we have, so I think the next year, 24, things will be similar.

Unless we have so I think the next year 24 sales will be similar.

Sure.

unless we have our social news and social portal, I mean, social portal and social news and social video have really the uptake or the social media platform, social video, social media platform.

Unless we have our.

So who knows and sohu portal until of Porto <unk> and video have.

Really the.

Uptake.

Or the.

The social media platform, so social video social media platform.

have a major rise or explosive growth of user base. I think 2024 will be similar to 2023. But we definitely have some.

They are a major.

Rise or.

Explosive growth of user base I think.

2024 will be similar to 'twenty, three but we definitely have some.

some hope that in 2024, our social.

Some hope that 2024 hour total.

media strategy will have some positive, you know, hope, yeah.

Media strategy will have some.

Positive.

Yes.

Hope yes.

To expand rapidly.

Got it thank you Charles.

Thank you we will now move onto our next question.

Thank you. We'll now move on to our next question.

Our next question comes from the line of Alicia Yap from Citigroup. Please go ahead.

Our next question comes from the line of Alicia Yapp from Citigroup. Please go ahead.

Hello, thank you. Good evening, Charles, Johanna, and team. Thanks for taking my questions. I have three questions. First, I wanted to follow up on the comment, Charles, you just mentioned for the 4Q advertising outlook. Would you say the macro situation is improving from what you are seeing in 3Q or about similar? Or is it no improvement and is it not getting worse in 4Q? So just any color as you compare to what you saw in 3Q would be great.

Hello. Thank you good evening, Charles Johanna and team Thanks for taking my questions.

Today's question first I wanted to follow up on the comment Charles you just mentioned for the for Q.

Advertising outlook.

Would you say the macro situation.

Is improving from what you are seeing in Q or about similar or is it.

No improvement and is it not getting worse in <unk>. So just any color as you compare to what you saw in Q would be great. So that's the first question.

So that's the first question.

Well, the I think you can kill for.

Well.

I think in Q4.

the internet service will have some improvement, right? Because the Q3 is kind of a.

The Internet service, we will have some we'll have some improvement.

Q3 is kind of.

It's a slow season for internet services, like Q4, which is W11, right? And e-commerce.

<unk>.

Low season for insurance services.

Q4 that will have a double 11.

And e-commerce.

And but overall, the auto industry has been contracting. I mean, people are not spending because of competition and less budget and because of the car sales.

But overall the auto industry has been contracting I mean people are not spending because of competition and less budget.

And because the cartels.

not as robust, so they are becoming more cautious in promoting their products or sales. Well, some industries, like fast-moving consumer goods industry, FMCG industry, seem to be spending more.

Robust so there are.

Yeah.

Coming more cautious in promoting their.

Products ourselves.

Well, the some industries like fast moving consumer goods industry <unk> industry seems have.

There are for anymore.

Typical of an economic downturn, right? People are drinking more, right? Drinking wines, consuming leisure time, and spending small items, right? So FMCG only has some bright spots.

Typical economic downturn right people are drinking more drinking wines are consuming leisure time.

Then in smaller small items right.

Yes.

<unk> is the only.

Adam and Brian.

One bright spot.

Okay.

I see, I see. That's very helpful. So second question is related to the game's guidance for the 4Q. I think I thought you mentioned there will be some expansion pack content update for TRBB series. So just wondering, what's the reasons for the game guidance to also experience sequential decline?

I see.

Very helpful.

Second question is related to the games.

Florida for Q I think I thought you mentioned there will be some <unk>.

Pension pack content updates for <unk>. So just wondering what's the reasons for the gain guidance to also SPV sequential decline.

When you will look, you will see the physical three and then you go to show your canc ation to allow P peopleger high E on the equation other.

Glen.

So you will see.

Please go ahead.

Luke will actually go on to your questions.

Yes.

Best of all, he improved a lot

On behalf of <unk>.

Okay.

Most of the old games have natural sound effects.

Pavel.

Okay.

On today's call.

Sure.

And due to most of our older games will have a natural decline in the fourth quarter.

And then due to most of our older games will have natural decline in the fourth quarter.

Yes.

Thanks.

Q4 was not that huge a file

Okay.

As I said I will hand, placebo Donaldson elsewhere.

Okay.

Sure.

Tony.

Got it.

The content updates in the fourth quarter are not major ones, so they cannot offset the natural decline from the game revenue.

So the update content, obviously in the fourth quarter are not major ones. So they cannot offset the natural declines from Kim revenue.

Can I follow up on that one? You said, so when you have new games launched next year, then we should assume to see some sequential growth, right, in the coming quarters beyond 4Q.

Okay can I follow up on that one is that.

So when you have new games launching next year, then we should assume to see some sequential growth in the coming quarters beyond Q.

So in the future, if there is a new game coming out in the future, there will be a rise in the currency. Yes.

The physical work hardly a senior partner with Columbia.

Okay.

Yes.

Sure.

Thank you.

Okay.

Yes, typically yes, but it also depends on the performance of the new game launched.

Yes.

Typically yes.

It also depends on the performance of the new game launched.

Okay. Thank you.

My last question is on your share buyback. So it is great that we are seeing this 80 million buyback that newly authorized. Just assuming if we are using

My My last question is on your share buyback. So it is great that we are seeing this.

Merrill Lynch.

Sorry about that newly authorized.

Just assuming if we.

finish up all the $80 million, just wondering what's the next plan that management may have. Would that be more buyback down the road if we finish that $80 million, or is that will be some other things that you are thinking? Thank you.

Using.

Finish up all of the 80 million.

Just wondering what the.

Next planned that management may have would that be more buyback down overall, if we finish that $80 million or is that will be some other things that you are thinking thank you.

Well, we'll first execute this $80 million buyback, right? And then we'll think, we'll decide next. I think.

Well, we are of course to execute this $80 million buyback right and then where things were.

Okay next.

I think.

Our focus is still on really to really make sure.

Our focus is still on.

It really.

To really make sure.

Sure.

our business grow and our social network strategy work.

Sure.

Our business grow and.

Our social network.

Our strategy works.

So there will be, actually we haven't, we've been refining our products for video and news. And the battle to be, to really, you know, to grow, to really grow our user base has not started. We've been refining our products and spending, so we definitely need the war chest to continue.

So there will be actually we haven't.

In refining our product video and Sohu news App.

<unk>.

The battle to be to.

Really.

Who grow to really grow our user base has now started we've been refining our products and the spending.

So we.

We need to watch has the tools to continue.

to launch the major product, I mean, to expand, to grow our.

To launch right.

The major problem.

We expand to grow our products the user base.

So that's, and we're confident actually, so that's why.

So thats.

And we are confident actually so that's why.

And also gaming, and yeah. So once the social media and social video user base grow, I would say, I hope exponentially. Because social network, that's the way it grows. It stays flat, and then suddenly you got the product right and explode, or grow exponentially. And we hope that day will come.

And also gaming and so.

So once the social media so video user base grow.

I would say I hope it exponentially because social network.

That's it.

<unk> growth.

Flat and then suddenly you've got the product right and explode or expenditure and we hope that they will come.

And then our advertising data will grow, because it's all tied with user base.

And then alright, I'm hanging Donna will grow because it's all tied in hydro.

User base.

Scale.

And also we will.

I hope that our game will be even better in the future.

I hope that our game gaming room.

Even better in the future.

I see. All right. Good. Thank you, Charles.

I see alright, great. Thank you Tom.

Thank you.

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