Q2 2024 Sohu.com Ltd Earnings Call
Okay.
Unknown Executive: Ladies and gentlemen, thank you for standing by, and good evening.
Speaker Change: Ladies and gentlemen, thank you for standing by and good evening. Thank you for joining so who's second quarter 'twenty default earnings conference call.
Unknown Executive: Thank you for joining Sohu's second quarter 2024 earnings conference call.
Unknown Executive: At this time, all participants are in a listen-only mode. After management's preparing marks, there will be a question-and-answer session. The disconference call is being recorded.
Speaker Change: At this time all participants are leased.
Speaker Change: Suddenly bet after management's prepared remarks, there'll be a question and answer session.
Speaker Change: Today's conference call is being recorded if you have.
Unknown Executive: If you have any objections, you may disconnect at this time.
Speaker Change: Any objections you may disconnect at this time.
Pu Huang: I'll now write to turn the conference over to your host for the disconference call, Huang Pu, Investor Relations Director of Sohu. Please go ahead.
Banca <unk>: I would now like to turn the conference over to your host for today's conference call Banca <unk> Investor Relations Director of Sohu. Please go ahead.
Chaoyang Zhang: Thanks, Sohu.com. Thank you for joining us to discuss Sohu's second quarter 2024 results.
Speaker Change: Yeah.
Peter: Yeah. So Peter Thank you for joining us to discuss second quarter, sometimes when they played out on the call are chairman and Chief did I don't think our Dr. Charles Zhang.
Chaoyang Zhang: On the call, our chairman and the chief executive officer, Dr. Chao Zhang, save our donor and invite President of NS James Stone.
Speaker Change: Finally in Nevada pardon me, if I Miss gemstone.
Unknown Executive: Also, the result of Changyou's say of Dewen Chen and his say of Yanfeng Wang. Before management begins, they'll prepare remarks.
Speaker Change: So there's that I'd tell you to stay at the luncheon, let's say, if you're all doing well.
Speaker Change: Before management begins their place either remarks I'll go back to remind you of the Companys Safe Harbor statement in connection with today's conference call.
Unknown Executive: I would like to remind you of the common safe harbor statement in connection with the disconference call. Except for the historical information content here in the matter of disconference call on the compound forwarded statements. These statements are based on counter plans, estimates, and projections. And therefore, use another place, and you rely on them. For these statements, involved in key risks and uncertainty. We caution you that a number of important factors could cause a result to be for maturity, from those content and effort within statements.
Speaker Change: Is that before they can still claim information company here.
Speaker Change: Matters discussed on this call may contain forward looking statements.
Speaker Change: These statements are based on kind of class estimates and projections and therefore is another place unduly I saw that.
Speaker Change: Well these statements involve risks and uncertainties.
Speaker Change: Over to you that a number of important factors could cause actual results to differ materially from those companies on a forward looking statement.
Unknown Executive: For more information about the potential risks and uncertainties. Please refer to the comments, findings, with the Secluded and Exchange Commission, including the notes with NAMU reporting from TANTAF.
Speaker Change: More information about the potential risks and uncertainties. Please refer to the how much it's funny because it's I think the change commission, including our most recent annual report on form 20-F.
Chaoyang Zhang: With that, I will turn the call over to Dr. Chao Zhang.
Speaker Change: I would I turn the call over to Dr. Charles Zhang Charles Please proceed.
Chaoyang Zhang: Chao, please proceed. Thanks, Honkou. Honkou, and thank you, everyone, for joining our call. In the second quarter of 2024, we hit the high end of our prior guidance in brand advertising. Well, our online game revenues came in well, came in well above expectations. Our bottom line performance was in line with our prior guidance. So, social media and social video, leveraged by our increasingly integrated and sophisticated product metrics. We further promoted the generation and consumption of premium content and vigorously boosted social interactions among users. Benefiting from our differentiated events and marketing campaigns, we were able to continually strengthen our brand influence and explore a diverse range of monetization opportunities.
Charles Zhang: And thank you everyone for joining our call.
Speaker Change: In the second quarter of 'twenty 'twenty four we hit the high end of our prior guidance in brand advertising revenues well online game revenues came in well came in well above expectations.
Speaker Change: Our bottom line performance was in line with our prior guidance.
Speaker Change: Consumer video social media and video leveraged by our increasingly integrated and a sophisticated product matrix.
Speaker Change: We further promote it lead generation.
Speaker Change: And consumption of premium content and vigorously boosted the social interactions among users.
Speaker Change: Benefiting from our differentiated events and marketing campaigns.
Speaker Change: Able to continually strengthen our brand influence and explore diverse range of monetization opportunities.
Chaoyang Zhang: Our online game performed well with revenues exceeding our expectations.
Speaker Change: Online games performed well with revenues exceeding our expectations.
Chaoyang Zhang: Before going through each business unit in more detail, let me first give you a quick overview of our financial performance. So, the second quarter of 2024, total revenues, $172 million, up 13% year over year and 24% quarter over quarter. Brand advertising revenues, $20 million, down 17% year over year and 24% up quarter over quarter. Online game revenues, $147 million, up 24% year over year and 25% quarter over quarter. Gap net loss attributable to Silver.com Limited was $38 million compared with a net loss of $21 million in the second quarter last year and net loss of $25 million in the last quarter.
Speaker Change: Before going through each business unit in more detail. Let me first give you a quick overview of our financial performance for.
Speaker Change: For the second quarter of 2024 total revenues of $172 million.
Speaker Change: 13% year over year, and 24% quarter over quarter.
Advisory revenues.
Speaker Change: $28 million down, 17% year over year, and 24% up quarter over quarter.
Speaker Change: Online game revenues $147 million up 24% year over year, and 25% in the quarter over quarter.
Speaker Change: GAAP net loss attributable to Sohu Dot Com limited was.
Speaker Change: $38 million compared with a net loss of $21 million in the second quarter of last year, and a net loss of $25 million in the last quarter.
Chaoyang Zhang: Non-GAAP net loss as beautiful to Sohu.com Limited was $34 million. Compared with the net loss of $18 million last year, the second quarter of last year, and the net loss of $22 million in the first quarter of this year.
Speaker Change: non-GAAP net loss attributable to Sohu Dot Com limited was $34 million.
Speaker Change: Compared with a net loss of $18 million last year, the second quarter of last year and a net loss of $22 million in the first quarter of this year.
Chaoyang Zhang: Now let me go through the key businesses in more detail. First, Sohu, media, and Sohu Video together. We consistently optimized our products, introduced innovative features, and further enhanced user experiences. We have built up a close connection among the platforms, content creators, and at the same time, there are also users. These enhancements greatly promote a continuous generation and distribution of diversified content, improved user engagement, and inspired active social interactions. During the quarter, we focused on stimulating content-innovation through various online and offline events and actively explored opportunities in developing our influential online interest clubs in different verticals.
Now let me go through the key businesses in more detail.
Speaker Change: First our Sohu media and Sohu video altogether.
We consistently optimized our product introduced innovative features and further enhance user experiences we have a build up of close connection I'm on the platforms kind of greater than the same time. There are also users.
Speaker Change: These enhancements and greatly promoting it.
Speaker Change: Generation and distribution.
Speaker Change: I'd content improved user engagement and inspired active social interactions.
Speaker Change: During the quarter, we focused on stimulating content and innovative innovation through various online and offline events and actively explored opportunities.
Speaker Change: In developing our influential online interest clubs and different verticals. For example, the 2020 for Sohu video keep hop Master class.
Chaoyang Zhang: For example, the 2024 Sohu Video Keypop Masterclass has attracted nationwide attention and recognition from a large number of Keypop fans. We'll follow this up by launching the 2024 Sohu Keypop Dancing Festival. The second last year, we also did that. So second annual events this year. In early August, besides Keypop, we have also hosted various events related to the traditional Chinese Hanfu, costume, and photography. These events have gained notable interaction and recognition as younger users with the same interest flocked to our flourishing online interest clubs. Meanwhile, in June, we hosted our traditional flagship event of 16 Sohu News Marathon in Shenzhen this time.
Speaker Change: Attracted nationwide attention and recognition from large number of key pop fans.
Speaker Change: We will follow this up by launching 2024, so who keep hop dancing Festival.
Speaker Change: Yeah.
Speaker Change: Last year, we also do that until the second half any events. This year in early August.
Speaker Change: <unk> key pop we have also hosted various events related to the traditional Chinese Huntsville.
Speaker Change: Costume.
Speaker Change: And photography.
Speaker Change: These events have gained notable traction in recognition of younger users.
Speaker Change: With same interest blocked two are flourishing online interest clubs.
Speaker Change: In June we hosted our traditional flagship event of Sixteens Sohu News marathon.
Speaker Change: And then this time during the marathon, Andrew Openers sports celebrities and pop stars actively share their ideas, we have pictures might broadcasting and short video clips and Sohu news App and Sohu video App.
Chaoyang Zhang: During the marathon, entrepreneurs support celebrities and pop stars actively share their ideas and their pictures, live broadcasting, and short video clips on Sohu News app and Sohu Video app. We also the social network channel. These have provided us with abundant premium content, stimulating user engagement and social interactions across our platform, as well as attracted various advertisers as budgets. For the more, we continue to enrich our video content library by acquiring exclusive dramas, rolling out unique original content, and dedicating short-form dramas, short-form clips, short-form dramas. Our original drama, Present is Present, and all Olympic variety show, public variety show, reality show, Be a Hero, Shangguan Junyang, were both well received and by audiences and generated widespread discussions across various social media platforms. Although advertisers remain relatively cautious in the quarter, thanks to our knowledge-based video and the advanced and live broadcasting technology.
Speaker Change: Also the social network channel.
Speaker Change: This has provided us with the abandoned premium content stimulate user engagement and social interactions across our platform.
Speaker Change: Well, it's attracted various advertisers' budgets.
Speaker Change: Furthermore, we continue to enrich our video content library by acquiring exclusive dramas rolling out the unique original content introducing short form dramas short form clips.
Speaker Change: Short form dramas.
Speaker Change: Our original drama.
Speaker Change: In his presentation, so common and the Olympics.
Speaker Change: Variety show that topic.
Variety show reality show.
Speaker Change: So I'm gonna yellow, both well received by audiences and generated widespread discussions across various social media platforms.
Speaker Change: Although advertisers' remain relatively cautious in the quarter.
Speaker Change: Thanks to our knowledge base that video platform and the best in live broadcasting technology.
Chaoyang Zhang: And the strong dissemination ability, we were able to strengthen our differentiated bandages and continue to explore innovative monetization opportunities. For example, we integrated our distinctive on my own child physical trust into various marketing campaigns, which were highly appreciated by other advertisers. And this class helped us capture advertising budgets because through these dirty events, we not only helped audiences simultaneously comprehend the physics knowledge behind, you know, especially the author in the auto companies, the products, the cars, the physics knowledge behind the products, also promoted branding for advertisers. So, meanwhile, we kept integrating advertisers' needs into our traditional content marketing campaigns to maximize the monetization value we offered.
Speaker Change: And that strong.
Speaker Change: Nation ability, we were able to strengthen our differentiated advantages and continue to explore innovative monetization opportunities for example, we integrated our discipline.
Speaker Change: My own child physically within the trust into various marketing compares.
Speaker Change: Which were highly appreciated by advertisers and this crowd helped us capture advertising budgets because these are very deep.
Speaker Change: We're not only helped audiences simultaneously.
Speaker Change: Comprehend the physics knowledge behind that especially the auto in the auto companies and products the car.
Speaker Change: Yeah.
Speaker Change: Knowledge behind the products also promoted branding.
Speaker Change: But I don't either.
Speaker Change: Meanwhile, we kept integrating advertisers' needs into our traditional content marketing campaigns to maximize.
Speaker Change: The monetization valley, we offered.
Chaoyang Zhang: Next, turning to online game business. During the quarter, online game business performed well with revenue succeeding prior guidance, although our TLBB series is remained stable, while new Western Westworld journey, Xi-O, BQA Xi-Xing, a licensed car-based RPG that we launched during the quarter performed well. In our PC game business, we launched various events for regular TLBB PC to celebrate its anniversary. We also supplemented and optimized its gameplay and content based on player feedback. With TLBB vintage, we introduced a team PDP event to satisfy players' demands of combat. In our mobile game business, we launched an expansion pack for legacy TLBB mobile for its anniversary, updating its graphics and adding of fun strategic gameplay, which were well-received by players.
Speaker Change: Next turning to online game business during the quarter online game business performed well with revenues exceeding prior guidance as a R. T. <unk> Sirius has remained stable while new western westward journey.
Speaker Change: She'll be question a license to cart based RPG that we launched during the quarter performed well in.
Speaker Change: In our PC game business, we launched the various events for our regular <unk> to celebrate its anniversary.
Speaker Change: We also supplement data and optimized its gameplay and the content based on player feedback.
Speaker Change: With <unk> vantage, we introduced a team PDP event too.
Speaker Change: To satisfy players demands of combat.
Speaker Change: In our mobile game business, we launched an expansion pack for legacy <unk> mobile for its anniversary updating its graphics and adding a fan strategic gameplay, which were well received by players next quarter, we will continuously launched expansion packs and content updates for <unk>.
Chaoyang Zhang: Next quarter, we will continuously launch expansion packs and content updates for TLBB series, new Westworld journey, and other titles to keep players engaged. As market competition intensifies, the market demand becomes more diversified. We will forge ahead with our top game strategy, continuously optimizing the R&D process, enhancing execution, and expanding our international presence. In addition, we will continue to invest in professional talent development, as well as content and technology innovation in order to bring more high-quality games to the market. We will maintain our core competitiveness on MMORPGs going forward, while also seeking to make breakthroughs in multiple players of multiple types of games, including card-based RPGs, sports games, and a casual game, etc.
Speaker Change: Sirius services.
Speaker Change: New westward journey and other titles to keep players engaged.
Speaker Change: As market competition.
Speaker Change: Competition intensifies.
Speaker Change: And market demand becomes more diversified we will forge ahead with our top games strategy.
Speaker Change: Continuously optimizing the R&D process.
Speaker Change: Enhancing execution and expanding our international presence.
Speaker Change: In addition, we will continue to invest in professional talent development as well as content and technology innovation in order to bring more high quality games to the market.
Speaker Change: We will maintain our core competitiveness.
Speaker Change: Oh Rpgs going forward, while also seeking to make breakthroughs in multiple players of multiple types of games, including car based RPG sports games and casual games et cetera.
Chaoyang Zhang: Now we would like to give an update on the ongoing shared repurchased program for Sohu. As of August 1, 2024, Sohu has repurchased 2.3 million ADS. for an aggregate, aggregate costs of approximately $26 million US dollars.
Speaker Change: Now I would like to give the update on the ongoing <unk>.
Speaker Change: Share repurchase program for Sogou.
Speaker Change: As of August 1st 2020 for Sogou has repurchased $2 3 million.
Speaker Change: For an aggregate our aggregate cost.
Speaker Change: Similarly, $26 million U S dollars.
Unknown Executive: With that, I now turn the cards with our sample, Jenna. Jenna.
Sohu.com: With that I'll now turn the call to sample Jenna Jonathan Thank you.
Jenna: Thank you, Chaoyang.
Jenna: I will now work you through the key financials of our major segments for the second quarter of 2024. Open numbers on a mangap basis. You may find the recommendations that mangap to get measures on our website. For Sohu Media and Sohu Video, quarterly revenues were $24 million, compared with $32 million in the same quarter last year. Quarterly operating loss was $72 million, compared with the operating loss of $67 million in the same quarter last year. For Chaoyang's all-again business and the $1,7173, quarterly revenues $148 million, compared with $120 million in the same quarter last year.
Speaker Change: I will now walk you through the key financials of our major segments for the second quarter up 10% before.
Speaker Change: The numbers on a non-GAAP basis.
Speaker Change: A reconciliation from non-GAAP to GAAP measures, our IR website.
Jenna Jonathan: First of all media and social video quarterly revenue for our $24 million.
Jenna Jonathan: Comparator with $32 million in the same quarter last year quarter.
Jenna Jonathan: Quarterly operating loss of $72 million compared.
Jenna Jonathan: Compared to the operating loss.
Jenna Jonathan: $7 million in the same quarter last year.
Speaker Change: So China is unlike in fitness and wellness or the west of Us Jay.
Speaker Change: Quarterly revenue of $148 million.
Compared with $110 million in the same quarter last year.
Jenna: Quarterly operating profit was $32 million, compared with operating profit $49 million in the same quarter last year.
Speaker Change: Quarterly operating profit.
Speaker Change: $32 million compared with operating profit $49 million in the same quarter last year.
Jenna: For third quarter of 2024, we expect grand advertising revenues to be between $70 million and $19 million. This implies an annual decrease of 14% to 23% and a sequential decrease of 4% to 14%. Unlike game revenues, to be between $14 million and $140 million. This implies an annual decrease of 3% to 11%, and a sequential decrease of 22% to 29%. Mangap net loss attributes go to Sohu.com Limited to be between $13 million and $14 million. And guess net loss attributes go to Sohu.com Limited to be between $34 million and $44 million.
Speaker Change: So the third quarter of 2010 before.
Speaker Change: We expect.
Speaker Change: Brand advertising revenue to be between $17 million and $19 million. This implies annual decrease of 14%, so 23% and a sequential decrease of 4% to 14%.
Speaker Change: Online game revenue to be.
Speaker Change: 100 million.
Speaker Change: <unk>.
Speaker Change: Mm $140 million.
Speaker Change: This implies annual decrease of 3% to 11% and a sequential decrease of 22% so 75% now.
Speaker Change: GAAP net loss attributable to Sohu Dot Com limited.
P J: P J, it's $30 million and $14 million.
P J: And the GAAP net loss attributable to Sohu dot com limited to be between $34 million and $44 million.
Jenna: This forecast will reflect Sohu's management current and the preliminary review, which is subject to substantial uncertainty.
P J: This forecast reflects management's current and preliminary view, which.
P J: It is subject to substantial uncertainty here.
Unknown Executive: This concludes our preparatory remarks. Our creator, we would now like to open the call to questions. Thank you very much. If you'd like to ask questions, please press R11. Every friend named to be announced. One moment for the first question.
Speaker Change: This concludes our prepared remarks.
Speaker Change: Operator, we would now like to open the call to questions.
Speaker Change: Thank you.
Speaker Change: You'd like to ask question. Please press one family friend named UBS.
One moment for the first question.
Thomas Chong: The first question comes from Thomas Chong of Jeffries. Please go ahead. Hi, good evening. Friends, management, I was taking my question. My first question is about the brand advertising business. Can management comments about how the macro hat wins affect the advertising market quarter to day? Because if I look at the guidance, we are expecting a sequential decline of 4% to 14%. Just want to get some color with regard to sectors like auto, FMCG, internet service, and property sector. How are we seeing the quarter to date so far?
Speaker Change: Yeah.
Speaker Change: The first question comes from Thomas Chong of Jefferies. Please go ahead.
Thomas Chong: Hi, Good evening, Thanks management for taking my question.
Thomas Chong: My first question is about it Brian advertising business can.
Thomas Chong: Can management comment about how the macro headwinds affect the advertising market.
Speaker Change: Quarter to date.
Speaker Change: If I look at the guidance, we are expecting a sequential decline of 4% to 14%.
Speaker Change: Just want to get some color with regard to.
Speaker Change: Sectors like auto FMC G Internet service and publicly if at all are we seeing the quarter to date.
Thomas Chong: And my second question is about our gaming business. Given that we are expecting our gaming business to be coined by about 22 to 29%. I just want to get some color with regard to the sequential decline. This is mainly due to rescue journey. How should we think about TLBB series?
Speaker Change: And my second question is about.
Speaker Change: Our gaming business given that we are expecting our gaming piece on that to the Thai baht.
Speaker Change: Tony calls I'll turn to Mike I, just wanted to get some color with regard to the sequential decline.
Speaker Change: Is it mainly due to <unk> with Janney.
Speaker Change: How should we think about <unk> Cvs and my first question is about.
Thomas Chong: And my first question is about our Australia repurchase program. Given that we have a 150 million share repurchase program. How should we think about the share repurchase in the second half? It's any color? Thank you.
Speaker Change: Share repurchase program.
Speaker Change: Doesn't that on behalf of about 15 million share repurchase program, how should we think about the.
Speaker Change: Sure.
Speaker Change: In the second half any color. Thank you.
Chaoyang Zhang: Okay, thank you. A question, and let me first of all on advertising: the overall macroeconomic situation is not that good. The downward trend, so there's advertising is still a challenge, big challenge because advertisers are very cautious in spending. And some advertisers tend to have the effect-driven advertising. They want to brand side is spending less. Overall, it's not good.
Speaker Change: Okay. Thank you.
Speaker Change: Have customers.
Speaker Change: Let me first of all on the advertising.
Speaker Change: Macroeconomic situations not that good downward trend so.
Speaker Change: There is advertising is.
Speaker Change: It's still a challenge I mean, a big challenge because advertisers are very cautious in spending.
Speaker Change: Some advertisers tend to two.
Speaker Change: <unk> two <unk>.
Speaker Change: In fact, you had.
Speaker Change: Right.
Speaker Change: You want a brand side is.
Speaker Change: Spending less overall is not good.
Chaoyang Zhang: But because of, as I just said, I just said that script scripted report that we've been using innovative marketing campaigns and platform innovative platform to able to attract some brand advertising spending so that we achieved a 24% quarter-to-quarter increase over Q1. And of course, in Q1, the Q2, the auto industry spending is more. It's the spend more compared with the Q1. And in the long run, the auto industry is still hopeful. It looks promising. But it's still very competitive. And there's the electric car, BV, I think, is upcoming and increased. But the luxury cars are really facing out of the price world and everything.
Speaker Change:
Speaker Change: But because of a drop.
Speaker Change: As.
Speaker Change: I just said I, just said that you know scripted non scripted.
Speaker Change: Import that we've been using our innovative marketing campaigns and.
Speaker Change: And platform innovation.
Speaker Change: Platform.
We're able to attract.
Speaker Change: A.
Some brand advertising.
Speaker Change: Spending so that we achieve a 24 of 20% to 24%.
Speaker Change: Quarter to quarter increased over.
Speaker Change: Two one.
Speaker Change: And.
Speaker Change: Of course in Q1 in Q2 the.
Speaker Change: Although auto industry.
Speaker Change: The spending.
Speaker Change: It's more spend more compare with the Q1.
Speaker Change: In the long run although industry.
Speaker Change: It's still.
Speaker Change: Hopeful it looks promising.
Speaker Change: But it's still very competitive and others.
Speaker Change: The.
Speaker Change: Electric copied BV it seems.
Speaker Change: It is.
Speaker Change: Is.
Speaker Change: His upcoming an increase but the luxury cars are really.
Speaker Change: Tracy.
Speaker Change: Yes.
Speaker Change: Because the price world and everything so Q2, Q auto auto now 25% of our overall advertising and then also Internet services. So Q2.
Chaoyang Zhang: So Q2, auto now have 25% overall advertising and then also Internet services. So Q2, the auto spend more and also Q2 is the e-commerce quarter, especially like the Louis Alba in the 18th. And in the summer, the FMCG is coming out because of the weather, hot weather, and the drink company, beverage companies are spending. So that's the overall. And yeah, that's a little high institution. Thank you.
Speaker Change: Aldo spend more and also Q2 will be.
Nate: E Commerce quarter Nate.
Speaker Change: Especially like that.
Speaker Change: All by June 18th and.
Speaker Change: In the summer.
Speaker Change: <unk> coming out because of the weather hot weather and midstream company.
Speaker Change: Beverage companies.
Speaker Change: Scott spending.
So that's the overall.
Speaker Change: Yes.
Speaker Change: Yes, that's all.
Speaker Change: Look the underlying situation.
Speaker Change:
Speaker Change: About changyou so.
Speaker Change: Thomas <unk>, Andy sat down I'm sure folks are out there each deal.
Speaker Change: Shelby, we should hit about Tanzania.
Paul: Paul and CFO.
Speaker Change: No.
Okay.
Chaoyang Zhang: How about Changyong, Sohu, Chen, Duwen? The sequential decrease of the third quarter, claiming revenue guidance, is mainly because Westwood journey, which accounts about half of the decrease. And the natural decline of other older gains account, the other half. And then about the share of repurchase, we spent 26 million dollars out of the 150. We have a program of 150 million dollars per person, right? So we'll keep the same pace in Q3 because of the limitation of the volume percentage volumes, right? Each day, that's why we're not able to purchase faster or at the same pace in Q3.
Speaker Change: The gains are CEO Tom.
Speaker Change: Secondly back capital.
The allowance to the shutdown.
Speaker Change: Alright, that's helpful.
Speaker Change: The sequential decrease of the third quarter.
Speaker Change: Gaming revenue guidance is mainly because westward journey, which accounts for about half of the decrease and the natural decline of other orders.
Speaker Change: <unk> accounts the other half.
Speaker Change: And then about the.
Speaker Change: The share repurchase.
Speaker Change: Uh huh.
Speaker Change: We spent $26 million.
Speaker Change: The 100.
Speaker Change: The program of $150 million right. So we will keep the same pace in Q3.
Speaker Change: Two because of the limitation of the volume total volume percentage volume right. Each day, that's why we're not we're not we're not able to to to purchase faster or so.
Speaker Change: In Q3.
Unknown Executive: Got it.
Unknown Executive: Thank you, Charles. Thank you. All right. Thank you for the questions.
Speaker Change: Got it thank you Charles.
Speaker Change: Yes.
Speaker Change: Alright. Thank.
Unknown Executive: One moment for the next question.
Speaker Change: Thank you for the questions.
Speaker Change: One moment for the next question.
Speaker Change: Okay.
Alicia Yap: Next question. Comments from the line of Alicia, yep, from City Group, please go ahead. Thank you. Good evening, Charles and management. Thanks for taking my questions. A few questions here.
Next question comes from the line of Alicia Yap from Citigroup. Please go ahead.
Alicia Yap: Thank you good evening towers and management. Thanks for taking my questions I'll still questions. Yet one number one wanted to follow up on the gaming question.
Alicia Yap: One, number one, I'm wondering to follow up on the naming question. So three Q guidance, obviously, implying there is a sequential reversal or decline, and many, as you mentioned, a half of this is driven by West Virginia. I'm just wondering, will this game actually have a chance to rebound in the later quarters, or you actually would expect, you know, after the decline, there's probably less hope for that to recover back to the 2-2 level. And then second question is on your social marketing spend. Obviously, two Q due to the game promotion, you spend a very big number, which I think is you guided.
Speaker Change: So three Q2 <unk>.
Speaker Change: Obviously, implying that if a sequential leave ourselves or declined mainly as you mentioned a household basis driven by Russia journey.
Speaker Change: Wondering where this game actually has a chance to rebound in the later quarters or are you actually bought back you know after the decline that's probably less hope for that to recover back to the <unk> level.
Speaker Change: And then second question is on <unk>.
Speaker Change: Your sales and marketing spend.
Speaker Change: Obviously took Q2 total game promotion you spent a very big number, which I think <unk> guided but then for TQ the loss guidance.
Alicia Yap: But then for three Q, the last guidance, it also seems to be implying the expensive size. It seems to be winning quite high. So can you maybe elaborate a little bit among the expense in terms of the gross margin trend, and also the social marketing trend.
Speaker Change: Also seems to be implying.
Speaker Change: The site is seems to be remain quite high. So can you maybe elaborate a little bit.
Speaker Change: <unk> expense in terms of the gross margin trend.
Speaker Change: Also the sales and marketing trends and then just.
Alicia Yap: And then just related to that on the last question, is there any planning or initiatives for you to think about to narrow your operating loss in the coming quarters? Thank you.
Speaker Change: Related to that on the last question is that any.
Speaker Change: Planning or initiative.
Speaker Change: For you to think about to narrow.
Speaker Change: Operating loss in the coming quarters. Thank you.
Chaoyang Zhang: The first question is the game's question. Just now, we said three questions. The question is, do you have any hope to return to the 2-2 level? We think there's a possibility for new apps we're journeying to rebound because it's a license the game. And before we have some, we were kind of divided about the game's improvement and its development direction with a third-party developer. And recently, we have agreed upon it. And the center will be around the user's experience. And we do; we did a lot of user research. If those measures are effective, we think he should have a chance to recover.
Speaker Change: <unk> alone and she will send you to change that John you mentioned with your thinking.
Speaker Change: So I think he'll declining or should you hold on to.
Speaker Change: I'm definitely not articulate shaping.
Sharon: So Sharon <unk> senior.
Sharon: <unk> had some time now.
Sharon: I think the data.
Sharon: And you'll receive.
Sharon: Such a hurdle than say the receipt.
Hassan: Thanks Hassan.
Speaker Change: Thank you.
Speaker Change: Well, let's see.
Speaker Change: Tony So our singular man.
Speaker Change: <unk>.
Speaker Change: So yeah.
Sean: Sean Youll see.
Speaker Change: So they are doing it.
Speaker Change: Therefore, the sales force.
Speaker Change: So the Op Inc.
Speaker Change: And Gartner goal.
Speaker Change: On time.
Speaker Change: We think theres possibility for new westward journey to rebound because its a license the game and before we have some.
Speaker Change: We were kind of divided about their games improvement and its development direction.
Speaker Change: With a third party developer and recently, we have agreed upon it.
Speaker Change: The center will be around the user's experience and we did a lot of user research if those measures are effective.
Speaker Change: We think you should have chance to recover.
Chaoyang Zhang: Thank you. The retention rates before 30 days are excellent. And the main problem is rising the content and after 30 days. So we actually, we have postponed our overseas plan for overseas release plan. And we hope we can improve the game, modify the game, stop the problem. And after that, we will release the game in the overseas market. Thank you.
Speaker Change: Thank you.
Speaker Change: Sure.
Speaker Change: So you'll see a Toyota.
Speaker Change: So you will see that hospitals with tenants such as the <unk> hundred product.
Speaker Change: To us, which enhances the hooker youll see zero.
Anyway.
Speaker Change: EMEA, yes, so that particular Yoshida highlighted the sanctions and so on.
Speaker Change: 70, <unk> 70 of our ICL sensor hub.
Speaker Change: Sure.
Speaker Change: Okay.
Speaker Change: Really the retention rates before 30 days are excellent and the main problem licensing that content. After 30 days. So we actually we have postponed our overseas plan for overseas relief plan and we hope we can.
Speaker Change: Improved again modify the gain solve the problem and after that we will release the game in the overseas market.
Speaker Change: Thank you.
Speaker Change: Good.
Speaker Change: The gross margin.
Speaker Change: Right.
Speaker Change: Gross margin in the mail.
Speaker Change: Yes.
Speaker Change #100: <unk> spending trying to be the arkoma.
Speaker Change: In Italy.
Speaker Change #100: Gotcha.
Speaker Change #100: Essentially the data obviously.
Chaoyang Zhang: The growth margin for online game, we're recovering the third quarter because the marketing expenditure and as well as the revenue sharing payments will decrease as well. Thank you for the question. Okay. As a reminder to ask questions.
Speaker Change #100: The gross margin for online game will recover in the third quarter because.
Speaker Change #101: The marketing expenditure and as well as well as the revenue sharing payments will decrease as well.
Speaker Change #102: Thank you for the question Okay.
Speaker Change #101: Alright.
Speaker Change #103: As a reminder to ask questions.
Chaoyang Zhang: Sorry, please come ahead. Sorry. I wanted to follow up on any plans or initiatives to narrow the operating loss in the coming for us, in terms of the game or the overalls. Overalls, I mean, a lot depend on the gaming grant spending because that's a large part, right? So if the game is not rebound in Q3, then our spending will not be much. So most margin definitely will improve for the gaming part. For Sohu, I think we are at, you know, people often ask us about, you know, with our cash, you know, how are we going to spend our cash?
Speaker Change #103: Sorry. Please go ahead.
Speaker Change #105: Oh, sorry, I wanted to just follow up.
Speaker Change #105: Any.
Speaker Change #106: Our initiatives to narrow the operating loss in the coming quarters.
But in terms of a game of the overall, so overall all of our offices.
Speaker Change #106: <unk>.
Speaker Change #106: A lot of it.
Speaker Change #106: And on the gaming spend because that's the large part right.
Speaker Change #106: So if.
Speaker Change #106: If the game.
Speaker Change #106: <unk> does not rebound in Q3, then our spending and whatnot.
Speaker Change #106: So much.
Speaker Change #106: So gross margin definitely will improve for the gaming partner.
Speaker Change #106: So I.
Speaker Change #106: I think we are.
Speaker Change #106: We are at.
Speaker Change #107: If you will often ask us about the with our cash.
Speaker Change #106: Going to spend our cash.
Chaoyang Zhang: Besides, you know, repurchasing of the shares, we are actually still in a battlefield, right? So we are; we need to build a user base. And only when we have a, you know, a sizable user base that we can turn the Sohu part, the media part to be turned into profitable, turn profitable. So we need to invest in the building, the products, developing the products, and also acquire new users. And that's where we're going to spend. So, so I think the, on the Sohu part, the growth margin will be similar, right? Or, yeah, we'll spend, keep spending.
Speaker Change #107: Besides.
Speaker Change #107: We repurchasing of.
Speaker Change #107: Shares.
Speaker Change #108: We are actually still in our battlefield right, so where do we need to build a user base and the only one we have a <unk>.
Speaker Change #108: <unk> user base that we can turn the social part of the media player to be turned into a profitable turned profitable. So we need to invest in the building.
Products developing the products and also.
Speaker Change #108: Acquire new users and that's where we're going to spend so so I think the.
Speaker Change #108: Local part.
Speaker Change #108: Gross margin will be at similar rate or <unk>.
Speaker Change #108: We'll spend keep spending.
Unknown Executive: I see, I see. Thank you.
Speaker Change #108: Okay.
David: I see I see thank you Chuck maybe just slip in one last one regarding the cash position I mean, given there is still some Chinese question David.
Chaoyang Zhang: We just split in one last one regarding the cash position. I mean, given that it is 20% daily limit restriction. Any other, you know, thinking about other shareholder return policy that in your mind? No, no, no, no, no. Yeah, buy back. Yeah, buy back is one of the main ones. And then the best one is we are very confident. We're hopeful that we're going to build a successful, be successful in building up the user base. And then to turn Sohu into a profitable, turn the, yeah, you know, highly profitable company. That's the best reward for your shareholders.
Speaker Change #108: Sure.
Speaker Change #110: Any other.
David: Thinking about other shareholder return policy.
Speaker Change #110: Mike.
Mike: No no no not now.
Brian: Yes, Brian.
Speaker Change #110: Great.
Speaker Change #110: Buyback buyback is one of the main one and then the best one is we are very confident we're hopeful that we're going to do the successful successfully in building up the user base and then.
Speaker Change #113: Two two turns it into a profitable turn.
Speaker Change #110: Yes.
Speaker Change #110: Holly.
Holly: Probably the company that's the best.
Holly: Reward for our shareholders.
Unknown Executive: Okay. Thank you, Charles. Thank you for the questions. Once again, to ask a question, please press star 11.
Charles Zhang: Okay. Thank you Charles.
Speaker Change #115: Thank you for the questions.
Speaker Change #116: Once again to ask question. Please press star one.
Speaker Change #116: Yeah.
Unknown Executive: Yeah, no more questions on the line. I would like to conclude today's conference call. Thank you for your participation. You may now disconnect your lines. Thank you. Bye bye. Thank you. Hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey, hey
Yes, no more questions on the line.
Speaker Change #116: To conclude today's conference call. Thank you for your participation you may now disconnect your lines.
Speaker Change #116: Thank you.
Speaker Change #116: Goodbye.
Speaker Change #116: Okay.
Speaker Change #116: [music].
Speaker Change #116: Okay.
[music].
Okay.
Speaker Change #116: [music].
Speaker Change #116: Yeah.
Speaker Change #116: [music].
Speaker Change #116: Okay.
Speaker Change #116: [music].