Q4 2024 Sohu.com Ltd Earnings Call
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.
Is that for the historical information contained a union another desktop I could call may contain forward looking statements. These statements are based on current plans estimates and projections and therefore, you should not place undue lifestyle that.
Okay statements involve risks and uncertainties.
I'll show you that a number of important factors could cause actual results to differ materially from those content and in forward looking statements.
For more information about the potential risks and uncertainties.
Refer to the public filings with Securities and Exchange Commission income.
Speaker Change: In our most recent annual report on form 10 task with that I'll now turn the call although to Dr. Charles Zhang Charles Please proceed.
Charles Zhang: Thanks, Tom and thank you everyone for joining our call.
Charles Zhang: In the fourth quarter of 2020 for our brand advertising revenues hit the high end of our previous guidance.
Well those are all on gaming revenues and the bottom line.
Speaker Change: So it's much better than you expected.
Speaker Change: For Sohu media platform, including social media and video we continue to refine our products optimized augers news.
Speaker Change: And strictly controlled budgets.
Speaker Change: By integrating the advantages of the product matrix, we got you.
Speaker Change: It is in the high energy events.
Speaker Change: We're able to promote the generation and its total distributions of premier content.
Speaker Change: Effectively he has.
Speaker Change: To attract more users and further unlock monetization potential.
Speaker Change: So all our games business delivered solid performance, thanks to the relentless efforts to produce high quality new games and.
Speaker Change: Revitalized legacy games.
Speaker Change: Before going through each business unit in more detail. Let me first give you a quick overview of our financial performance.
Speaker Change: For the fourth quarter or first quarter of 'twenty 'twenty four.
Speaker Change: Total revenues.
Speaker Change: $135 million.
Speaker Change: Down, 5% year over year, and 11% quarter over quarter.
Speaker Change: Brand advertising revenues $19 million down, 7% year over year, and 1% in the quarter over quarter.
Speaker Change: Online game revenues $110 million.
Down, 4% year over year, and 14% quarter over quarter.
Speaker Change: Okay.
Speaker Change: GAAP net loss attributable to Sohu Dot Com limited.
Speaker Change: $21 million compared with a net loss of $13 million in the fourth quarter of 2023, and a net loss of $16 million in the third quarter of 2024.
Speaker Change: non-GAAP net loss attributable to silver Dot Com limited.
Speaker Change: $15 million compared with a net loss of $11 million in the fourth quarter of 2023 and that lots of $12 million in the third quarter of 2024.
Speaker Change: For the whole year of 'twenty 'twenty four.
Speaker Change: Total revenues.
Speaker Change: $598 million flat compared with 2023.
Speaker Change: Brand advertising revenues $73 million down, 17% compared with 2023.
Speaker Change: Online game revenues $502 million.
Speaker Change: Up 5% compared with 2023.
Speaker Change: GAAP net loss attributable to Sohu Dot Com limited $100 million.
Speaker Change: Compared with a net loss of $66 million in 2023.
Speaker Change: non-GAAP net loss attributable to Sohu Dot Com limited.
Speaker Change: Was $83 million.
Speaker Change: Compared with a net loss of $51 million in 2023.
Speaker Change: Now let me go through our key businesses in more detail.
Speaker Change: First the social media platform.
Speaker Change: Okay.
Speaker Change: We are consistently focused on improving our technology and optimizing our products.
Speaker Change: With cutting edge technology.
Speaker Change: Meanwhile, we also kept improving user experience.
Speaker Change: Closely monitoring their needs.
Speaker Change: We organically integrated our diverse online and offline events maximizing the synergy of the silica product matrix and the folks bring.
Speaker Change: It's driving online community.
Speaker Change: Efforts allowed us to attract more users, especially the younger generation to our platform.
Speaker Change: Really promoted the interactions and has stimulated more coming generations.
Speaker Change: So in.
Speaker Change: 'twenty four 'twenty 'twenty four we held a series of key pop dancing tour competitions in several major cities in China.
Speaker Change: From which the most outstanding contestants were selected to join the 'twenty 'twenty four Jim concert.
Speaker Change: Overseas South Korea in October.
Speaker Change: Later in December and the final show of the above series of dancing events. The 'twenty 'twenty four Sohu video Dancing Festival.
Speaker Change: With host data with great success.
Speaker Change: This dancing festival brought together a lot of the top 10, 30 easy ice into ads and it has become the most eye catching any events in the field of keep hop dancing for the year.
Speaker Change: Also during the last quarter.
Speaker Change: We hosted a 'twenty 'twenty for Sohu video call for sure.
Speaker Change: Sure.
Speaker Change: Golf on the festival.
Speaker Change: The largest nationwide competition showcasing the traditional Chinese Huntsville costume.
It received widespread acclaim and sparked extensive discussions ended.
Speaker Change: Dissemination across multiple social media platforms.
These events not only its charlie strengthen our leading position and influence in our key pop and a handful of events verticals.
Speaker Change: But also stimulated numerous social interactions and distributions on our platform.
Speaker Change: We also continued to host our flagship event such as the 2020 for Sohu Fashion Awards.
Speaker Change: Yeah.
Speaker Change: And identical year end of 2020 for Sohu Finance annual Forum. So it was hanging in women with further consolidated our brand influence as a mainstream media platform and provided us with abandoned premium content.
Speaker Change: These events were not only attractive for users, but also enabled us to provide unique marketing solutions to our advertisers.
Speaker Change: And let's see how it further persisted in broadcasting.
Speaker Change: Physics class 40 call. It has been going on for three years with three books published.
Speaker Change: And also the ink in English class.
Speaker Change: These classes have jointly become.
Speaker Change: The leading IP for Sogou.
Speaker Change: Leveraging this unique IP is in collaboration with our with our with science related broadcasters, we were able to attract that millions of users viewers pop.
Speaker Change: Popularized.
Speaker Change: Professional knowledge to them.
Speaker Change: And reinforce our core competent competitiveness in the field of knowledge and science related live streaming.
Speaker Change: Benefiting from the above.
Speaker Change: We were able to combine the knowledge defense elimination and brand marketing brand marketing through diverse channels, delivering unique experiences to advertisers and audiences and driving and within budget.
Speaker Change: In 2012, before we continuously enriched our content library by acquiring TV dramas rolling out original dramas.
Speaker Change: And bring in premium American TV series, as well as introducing short dramas.
For example, our TV drama Kintigh, India.
Speaker Change: Hairpins in the palace and the American TV series, the bear Shanghai.
Speaker Change: And also the Spo Spo seriousness were well received by the audience.
Speaker Change: Yes, we're talking about social media platform include both the.
Speaker Change: Sohu news and video.
Speaker Change: Now, let me turn to the island again business.
Speaker Change: During the quarter, our online game business performed well with revenues exceeding our prior guidance.
Speaker Change: And our PC games business, we launched a new clan jointly for regular <unk>.
Speaker Change: <unk> and <unk> vintage jointly.
Speaker Change: Along with the various snow and ice themed ice themed events and the gameplay.
Speaker Change: Actually boosting players' enthusiasm for the game.
Speaker Change: In addition, we introduced an innovative survival.
Speaker Change: VP gameplay for regular T O.
Speaker Change: Pvp C and a refreshed some classical classic game plays of <unk> vintage to enhance.
Speaker Change: Player experience and the renewed their interest in the game.
Speaker Change: For legacy <unk> mobile.
Speaker Change: We launched a new expansion pack featuring crossover content such as that.
Speaker Change: Themed downes's.
Speaker Change: And the rich innovative game plays.
Speaker Change: Which drove higher user satisfaction.
Speaker Change: Next quarter, we will continue to launch expansion packs in the content updates for the <unk> series and other titles to further keep players engaged.
Speaker Change: As market competition intensifies and end user demand for quality and innovation innovation continues to rise.
Speaker Change: We look forward to ahead with our top games strategy.
Speaker Change: Staying true to our user centric philosophy will continue to optimize our research and development process and enhance execution.
Speaker Change: To improve efficiency and product success rate.
Speaker Change: While we will intensify our efforts to expand our international presence.
Speaker Change: While maintaining our core competitiveness.
All Rpt's, we're also actively expand our portfolio with diverse types of games, including card based RPG sports games and casual games et cetera.
Speaker Change: With these efforts.
Speaker Change: We are confident that with soon can bring more high quality games to the market.
Speaker Change: Now I'd like to give an update on the.
Speaker Change: Ongoing share repurchase program.
Speaker Change: As of February <unk>. This year, 2025, so who had repurchased $4 2 million.
Speaker Change: For an aggregated cost of approximately $52 million.
Speaker Change: So with that I will turn to the call to our CFO join Us China.
China: Thank you Michelle.
China: I will walk you through the key financials of our cable segment for the fourth quarter and full year of 2020.
China: All the numbers on a non-GAAP basis.
Speaker Change: I know they constantly as Sheldon non-GAAP to GAAP measures.
China: Our IR website.
China: Total media platform.
China: Revenues were $24 million.
China: Compared with $75 million in the same quarter last year.
China: Quarterly operating loss was $69 million.
China: <unk> operating loss of $68 million in the same quarter last year.
China: For the full year 2024.
China: Revenues were $91 million.
China: Compared with $140 million in 2023.
China: Full year operating loss was $287 million.
China: Compared with operating loss of $216 million.
China: In 2022.
Well I'll tell you, it's all I can business and nobody several wins illustrate.
China: Today's revenue.
China: $11 million.
China: <unk> $160 million in the same quarter last year.
China: Quarterly operating profit was $48 million compared.
China: Compared with operating profit of $47 million in the same quarter last year.
China: For the full year 2010, before revenues were $506 million.
China: Compared with revenue of $485 million in 2023.
China: The full year operating profit of $196 million.
China: Compared with the operating profit $203 million intend to Italy.
China: For the first quarter of 2025.
China: We expect brand advertising revenue.
China: Between $30 million and $40 million.
China: This implies annual decrease of 13% to 19% and a sequential decrease of 26% so 31%.
China: Unlike in revenue to be between $105 million.
Speaker Change: Mm $150 million.
Speaker Change: This implies annual decrease of 2% to 11%.
Speaker Change: The sequential decrease of 4% sequentially.
The sequential increase of 5%.
Speaker Change: non-GAAP net loss attributable to Sohu Dot Com limited to.
Speaker Change: Should be between $16 million.
Speaker Change: And the $26 million.
Speaker Change: GAAP net loss attributable to Sohu dot com limited to be between $10 million and $30 million.
Speaker Change: This forecast reflects management's current and preliminary view.
Speaker Change: What did your subject.
Speaker Change: So uncertainty.
Speaker Change: This concludes our prepared remarks.
Speaker Change: Operator.
Speaker Change: Now I'd like to open the call to questions.
Speaker Change: Thank you we will now begin the question and answer session to ask a question. Please press star one on your telephone and wait for it.
Speaker Change: Named UBS.
Speaker Change: Our next question comes from the line of Thomas Chong from Jefferies. Please go ahead.
Thomas Chong: Hi, good evening, Thanks management.
Speaker Change: My question Mike.
Speaker Change: My question. My first question is about the brand advertising business.
Speaker Change: It seems that for the Q1 guidance.
The sequential decline was a bit soft versus <unk>.
Speaker Change: The year on year decline a bit.
Speaker Change: It was a more than cobalt. So I just wanted to get some color with regard to any reason behind the latest advertising sentiment and.
Speaker Change: I'll be.
Speaker Change: Please continue.
Speaker Change: My comments about how we should think about.
Speaker Change: When we should expect.
Speaker Change: I have a few alco decline or kill until both because it seems the range is a bit why and how is the trend. So far and then my last question is about the invitation all parties.
Speaker Change: My comments about how.
Speaker Change: You should think about the integration with us so thank you.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: So your first question is about the other tiny right. The second question was about.
Speaker Change: Okay, Alright, and surveying the application of the deep Sea correct. Okay. The first one on same store question for Q1.
Speaker Change: Right decline right.
Speaker Change: The macroeconomic situation.
Speaker Change: While spending less.
Speaker Change: <unk>.
Speaker Change: Advertisers are spending our.
Speaker Change: Spending less in marketing because of the overall economy economic situations.
Speaker Change: And so yes.
Speaker Change: Yes.
Speaker Change: It's overall.
Speaker Change: Yeah.
Speaker Change: Overall economy economy.
Speaker Change:
Speaker Change: So.
Speaker Change: The second question is about the.
Speaker Change: Game right.
Speaker Change: Glen Aon Hewitt warranty shifts from <unk> to <unk>.
Speaker Change: <unk> not only to our clients. So it has only one.
Amit: And then Amit.
Speaker Change: On December 19 classes.
Amit: Sure.
Amit: Okay great.
Amit: Yeah, Chris this is amount.
Kelly please.
Amit: People.
Amit: This is <unk>.
Amit: And the performance of the first quarter is expected to be flat quarter over quarter.
Amit: Okay, so about the deep sea.
Amit: We've been actually.
Amit: In the last two years we've been.
Applying the.
Amit: In our language model to through our social.
Media and social network products.
Amit: For example, the.
Amit: The organized.
Amit: Content the better.
Amit: The generation compound.
Amit: Especially knowledge based content and the.
Amit: Tech space.
Amit: Yes.
Amit: Abstract writing and.
Amit: Internal editing.
Amit: The.
Amit: With the plant technology has really increased the efficiency.
Amit: And.
Amit: In the future we're going to also too.
Amit: For example in our <unk>.
Amit: Streaming.
Amit: Our AI technology can help us to summarize different base.
Amit: <unk>.
Amit: To summarize the video content.
Amit: Into tax form.
Amit: And to automatically.
Amit: <unk>.
Amit: To mark the different sections of the streaming video content.
Amit: And.
Amit: In terms of social network people when people interaction will be.
Amit: Our products in the future we will.
Amit: For the.
Amit: AI a data.
Amit: Interaction or and also is.
Amit: Our voice to text.
Amit: And also sometimes in the future probably.
Amit: What was it.
Amit: With a deep deep seek or.
Amit: Large model language model through.
Amit: Who.
Amit: And onto helps users to generate content with the voice and text.
Amit: <unk>.
Amit: To turn them into some pictures on the videos and to have really generated some quality really.
Amit: He is the production process and make it really vary.
Amit: Actually that some of the content.
Amit: We'll now be able to produce in our view, but to do it. So there is a wide range of applications.
Amit: AI technology and deep sea property deep sea, we haven't.
Amit: What happened.
Speaker Change: Pardon me.
Amit: We're looking at that possibility.
Amit: So basically help us with our media and social network user experience and content generation content organization.
Amit: Added in.
Amit: Yeah and also I think is also.
Amit: We are a gaming REIT also applied.
Amit: Language model right.
Amit: Great.
Amit: Good.
<unk> you only AI, Amit Pushout, that's about right Joe.
Amit: Siblings.
Amit: In April.
Amit: AI technology apt.
Amit: Application in terms of gaming development is mainly in the area.
Amit: Video production and second.
Amit: To dimension.
Amit: Art design.
Amit: Okay.
Amit: Yes.
Amit: Okay.
Amit: To answer your question Thomas.
Amit: Got it thank you Charles.
Amit: Yeah.
Speaker Change: Thank you for the question one moment for the next question.
Speaker Change: Our next question comes from Alicia Yap from Citi. Please go ahead.
Alicia Yap: Hello, Good afternoon, good evening.
Charles Zhang: Thanks Charles.
Speaker Change: Thanks for taking my questions I have one follow up number one.
Speaker Change: Can management, maybe comment a little bit on the overall macro sentiment estimated that to the advertising.
Speaker Change: Sentiment.
Speaker Change: Just curious given.
Speaker Change: Kevin there's a lot of heartburn talks about.
Technology.
Speaker Change: Tool from China, So I'm not sure where some of these.
Speaker Change: Positive <unk> positive technology Center.
Speaker Change: With that have you seen any of this actually translate to slightly better Atlas has Uh huh, Patrick Scotland on such a category.
Speaker Change: Also have you seen any change of consumer behavior and construct the consumption estimate that to some of those parcels.
Speaker Change: So that's the first question.
Speaker Change: And then second question is can you remind us with your 52 million of buyback Amal al what's the outstanding amount on the buyback karate.
Speaker Change: Thank you.
Speaker Change: Well the buyback where we bought.
Speaker Change: Therefore too right.
Speaker Change: Too many ideas.
Speaker Change: So we spend.
Speaker Change: One third of the 150 million.
Speaker Change: But the dollars the.
Speaker Change: Right.
Speaker Change: Two milligram already so there's another 100 million to go.
Speaker Change: Alright.
Speaker Change: Prove the by the board.
Speaker Change: So that's $4 2 million of it yes, okay.
Speaker Change: In terms of.
Speaker Change: Two the macroeconomic situation I think.
Speaker Change: It's just.
Speaker Change: Consumption.
Speaker Change: People have less money to consume to spend that's why.
Speaker Change: Companies are product companies.
Speaker Change: Accordingly.
Speaker Change: Spent less in marketing in terms for example, the.
Speaker Change: Most of our auto auto companies.
Speaker Change: Having.
Speaker Change: Budget.
Speaker Change: I can see that you have to in 2024, I can see a trend of like almost like.
Speaker Change: Cut by half a lot of companies.
Speaker Change: If they wanted to spend 6 million RMB now it's been three minute. So instead, so it seems to that because the consumption is weak.
Speaker Change: That's why our marketing companies are spending less money in marketing.
Speaker Change: That's why we feel that rates.
Speaker Change: Advertising and.
Speaker Change: Promote marketing platform, we can feel the.
Speaker Change: Yes, the decline right.
Speaker Change: <unk>.
Speaker Change: As to the deep sea.
Speaker Change: Only deep seated with overall technology being brought up.
Speaker Change: Quiet crowd, the enthusiasm and excitement, but I don't think I can now translate into any.
Speaker Change: Any immediate.
Speaker Change: Benefits of marketing or companies.
Speaker Change: Because it's really the problem is really people are spending less people have less money because people.
Speaker Change: Bob houses and then they have much less money left to spend right.
Speaker Change: So are expected to pay the mortgage debt that's why.
Speaker Change: Companies that don't have them.
Speaker Change: Or is it the product.
Speaker Change: Sales volume drops I think.
Speaker Change: And I don't think AI technology can help that in the short run.
Speaker Change: And sometimes you sometimes the AI technology actually.
Speaker Change: Troy drops right not creating jobs, that's what I can see.
Speaker Change: So.
Speaker Change: I see I see.
Speaker Change: So maybe can I follow up I'll, let Debbie couch.
Speaker Change: So any other chios sub sector that is holding up in terms of the appetite for example, let's say to FMC G or even have you seen Leslie.
Speaker Change: Electronic side the cell phones, given the trade in and all of that have you seen any increase in spending on any of the categories.
Speaker Change: Yes, I think I'm at FMC.
Speaker Change: Become has risen to the.
Speaker Change: Top sector, among our advertiser unused sectors.
Speaker Change: We previously before I remember you know automotive always number one right and then one factor, but now <unk> decision number one.
Speaker Change: At holding it services are becoming a number three and number four.
Speaker Change: Yes people are actually spending more on some smaller item.
Speaker Change: Like Oh.
Speaker Change: Food.
Speaker Change: Alcohol liquor and electronics this.
Speaker Change: So.
Speaker Change: Yes.
Speaker Change: And also I think.
Speaker Change: The trade in policy also stimulated that to some extent.
Speaker Change: I see I see okay.
Speaker Change: That's helpful. Thank you thanks, Charles Thanks management.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: Thank you for the questions with that now concludes the conference for today. Thank you for your participation you may now disconnect your lines.
Speaker Change: Okay.
Speaker Change: Alright.
Speaker Change: Okay.
Speaker Change: [music].