Q2 2026 Sohu.Com Inc Earnings Call

August 10, 2026

Operator: Ladies and gentlemen, thank you for standing by, and good evening. Thank you for joining Sohu Second Quarter 2026 Earnings Conference Call. At this time, all participants are in a listen-only mode. After management prepared remarks, there will be a Q&A session. Today's conference call is being recorded. If you have any objections, you may now disconnect at this time. I would now like to turn the conference over to your host for today's conference call, Pu Huang, investor relations director of Sohu. Please go ahead.

Speaker #2: Ladies and gentlemen, thank you for standing by and good evening. Thank you for joining Sohu's second quarter 2026 earnings conference call. At this time, all participants are in listen-only mode.

Speaker #2: After management's prepared remarks, there will be a Q&A session. Today's conference call is being recorded. If you have any objections, you may now disconnect at this time.

Speaker #2: I would now like to turn the conference over to your host for today's conference call, Huang Po, Investor Relations Director of Sohu. Please go ahead.

Speaker #3: Thanks, Roberta. Thank you for joining us to discuss Sohu's second quarter 2026 results. On the call are our Chairman and Chief Executive Officer, Dr. Charles Zhang; our Chief Financial Officer, Joan Li; and Vice President of Finance, James Stone.

Pu Huang: Thanks, operator. Thank you for joining us to discuss Sohu Q2 2026 results. On the call are Chairman and Chief Executive Officer, Dr. Charles Zhang, CFO Joanna Lv, and Vice President of Finance, James Deng. Also with us are Chang Yu, CEO of Changyou, and CFO Yaobin Wang. Before management begins, I would like to remind you of the company's safe harbor statement shown at the beginning of this conference call. Except for the historic information contained herein, the matters discussed on this call may contain forward-looking statements. These statements are based on current plans, estimates, and projections. 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 contained in any forward-looking statements.

Speaker #3: Both of us are trying to see whether Wing Chen and the CFO are being wrong. Before management begins, I would like to remind you of the comments that our statement shows that this conference call, except for the historical information contained herein, the matters discussed on this call may contain forward-looking statements.

Speaker #3: These statements are based on current plans, estimates, and projections. Therefore, you should not place any reliance on them. Forward-looking statements involve risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statements.

Speaker #3: For more information about the potential risks and uncertainties, please refer to the company’s filings with the Securities and Exchange Commission, including the most recent annual report on Form 20-F for 2025.

Pu Huang: For more information about the potential risks and uncertainties, please refer to the company's filings with the Securities and Exchange Commission, including the most recent annual report on Form 10-K. With that, I will now turn the call over to Dr. Charles Zhang. Charles, please proceed.

Speaker #3: With that, I will now turn the call over to Dr. Charles Zhang.

Speaker #4: Hello, please proceed.

Speaker #5: Thanks, Huang Po, and thank you, everyone, for joining our call. In the second quarter of 2026, our marketing services revenues, online game revenue, and bottom line performance all exceeded our previous guidance.

Charles Zhang: Thanks, Pu Huang, and thank you, everyone, for joining our call. In Q2 2026, our marketing services revenues, online game revenue, and bottom line performance all exceeded our previous guidance. For the Sohu Media Platform, we continued to refine our products and host diverse events and activities to stimulate communication and interaction among users, which further strengthened the platform's social features and promoted its vigorous and healthy development. Leveraging our differentiated content and events, we were able to address advertisers' needs and continue to explore diversified monetization opportunities. For online games, we remain committed to our long-term operation strategy and continue to launch diverse content updates to deliver rich and engaging experiences for game players. Before going through each business unit in more detail, let me first give you a quick update overview of our financial performance.

Speaker #5: For the social media platform, we continue to refine our products and host diverse events and activities to stimulate communication and interaction among users, which further strengthened the platform's social features and promoted its vigorous and healthy development.

Speaker #5: Leveraging our differentiated content and events, we were able to address advertisers' needs and continue to explore diversified monetization opportunities. For online games, we remain committed to our long-term operation strategy and continue to launch diverse content updates to deliver rich and engaging experiences for game players.

Speaker #5: Before going through each business unit in more detail, let me first give you a quick overview of our financial performance. Please be advised that this release relates to continuing operations only.

Charles Zhang: Please be advised that this release relates to continuing operations only. For Q2 2026, total revenue were $136 million, up 7% year over year and down 4% quarter over quarter. marketing services revenues were $15 million, down 3% year over year and up 21% quarter over quarter. online game revenues were $116 million, up 10% year over year and down 7% quarter over quarter. After giving effect to a reversal of a tax expense of approximately $13 million due to a reversal of uncertain tax positions previously, GAAP in net income attributable to Sohu.Com Limited was $200,000, compared with a net loss of $20 million in Q2 2025 and a net loss of $4 million in Q1 2026. Non-GAAP.

Speaker #5: For the second quarter of 2026, total revenue was $136 million, up 7% year over year and down 4% quarter over quarter. Marketing services revenues were $15 million, down 3% year over year and up 21% quarter over quarter.

Speaker #5: Online game revenues were $116 million, up 10% year over year and down 7% quarter over quarter. After giving effect to the reversal of a tax expense of approximately $13 million, due to a reversal of uncertain tax positions, previously GAAP net income attributable to Sohu.com Limited was $200,000.

Speaker #5: Compared with the net loss of $20 million in the second quarter of 2025, and a net loss of $4 million in the first quarter of 2026, non-GAAP, after giving effect to the above-mentioned reversal of tax expenses, non-GAAP net income attributable to Sohu.com Limited was $500,000.

Charles Zhang: After giving effect to the above-mentioned reversal of tax expenses, non-GAAP net income attributable to Sohu.com Limited was $500,000 income, compared with the net loss of $20 million in Q2 2025, and the net loss of $4 million in Q1 2026. I'll go through our key businesses in more detail. First, Sohu Media Platform. This quarter, we continued to refine our products with upgraded technologies and enhanced user experience and engagement across different scenarios. Leveraging the synergy between various offline activities and our online communities, we boosted active user interactions as well as the generation and dissemination of premium content. These efforts enabled us to expand genuine social connections among users on our platform and foster a virtuous cycle to build a prosperous and healthy social ecosystem.

Speaker #5: Income, compared with the net loss of $20 million in the second quarter of 2025 and the net loss in 2026. Now, I'll go through our key businesses in more detail.

Speaker #5: First, the Sohu Media Platform, or Sohu Social Media Platform. This quarter, we continued to refine our products with upgraded technologies and enhanced user experience and engagement across different scenarios.

Speaker #5: Leveraging the synergy between various offline activities and our online communities, we boosted active user interactions as well as the generation and dissemination of premium content.

Speaker #5: These efforts enabled us to expand genuine social connections among users on our platform and foster a virtuous cycle to build a prosperous and healthy social ecosystem.

Speaker #5: During the quarter, in addition to the 2026 Spring Convention of Sohu Video Influencers, hosted in April, where we created opportunities for broadcasters to interact and establish in-person social connections across various verticals, we also continued with the signature event of 2026 Kickoff, the annual K-pop Dancing Festival.

Charles Zhang: During the quarter, in addition to the 2026 Spring Convention of Sohu Video Influencers, 春季关注流大会 , hosted in April, where we created opportunities for broadcasters to interact and to establish in-person social connections across various verticals. We also continued with the signature events of 2026 Kickoff, the annual K-pop dancing festival, and also the 2026 Chinese Costume Hanfu Model Competition. These competitions attracted thousands of young enthusiasts to actively participate, consolidating our appeal and competitiveness in these areas based on our long-term endeavor. In the dance area, we further consolidated our influence by introducing a series of engaging activities on campus, enhancing our platform's coverage among young people.

Speaker #5: And also the 2026 Chinese Costume Hanfu Model Competition. These competitions attracted thousands of young enthusiasts to actively participate, consolidating our appeal and competitiveness in these areas.

Speaker #5: Based on our long-term endeavor in the dance area, we further consolidated our influence by introducing a series of engaging activities on campus, enhancing people.

Speaker #5: In addition, we hosted attractive and innovative activities in conjunction with popular events or topics across different verticals, such as the salute to the Ultimate Explorers outdoor vertical, and sports, and all the verticals.

Charles Zhang: In addition, we hosted attractive and innovative activities in conjunction with popular events or topics across different verticals, such as the Salute to the Ultimate Explorers, the outdoor vertical, and sports and other verticals, and World Cup related activities, World Cup watching parties. As a result, a variety of online interest clubs were developing rapidly. These distinctive events and activities garnered significant attention and recognition, and spread widely across multiple social platforms, bringing active interactions to our platform and contributing to its vigorous and high-quality development. In May, we successfully hosted our traditional event of 2026 Sohu Annual Science Technology Conference, 年度科技论坛 . We invited a host of leading scholars to engage in cross-sector, high-end dialogues regarding the latest scientific trends and the developments, attracting a large number of scientists and science enthusiasts to our platform.

Speaker #5: And World Cup-related activities, such as World Cup watching parties. As a result, a variety of online interest clubs were developing rapidly. These distinctive events and activities garnered significant attention and recognition, and spread widely across multiple social platforms.

Speaker #5: Bringing active interactions to our platform and contributing to its vigorous and high-quality development. In May, we successfully hosted our traditional event, the 2026 Sohu Annual Science Technology Conference.

Speaker #5: We invited a host of leading scholars to engage in cross-sector, high-end dialogues regarding the latest scientific trends and developments, attracting a large number of scientists and science enthusiasts to our platform.

Speaker #5: At the same time, we continue to strengthen our leading position in knowledge and science-related live broadcasts. Class with our core IPs, including myself, Charles Physics Class, and we held live broadcasts related to the National College Entry Examination in physics and provided relevant learning advice for audiences.

Charles Zhang: At the same time, we continue to strengthen our leading position in knowledge and science-related live broadcasts class with our core IPs on myself, Charles' Physics Class. We held live broadcasts related to the national college entry examination in physics, and provided relevant learning advice for our audiences. We also kept delivering public science popularization, devoting to narrowing the gap between the public and the cutting-edge science. This month, Charles English Class celebrated its 10th anniversary. 10 years. We've been doing this for 10 years, and has conducted for more than 2,000 live broadcasts, continuing to generate practical content and driving traffic to the platform. Relying on our unique IPs, product matrix, and differentiated content, we're able to tailor marketing solutions for advertisers and tap into more monetization potential.

Speaker #5: We also kept delivering public science popularization devoting to a narrowing the gap between the public and the cutting-edge science. This month, the English class, my Charles English class, celebrated its 10th anniversary 10 years been doing this for 10 years and has created conducted for more than 2,000 more than 2,000 live broadcasts contributing continuing to generate practical content and driving traffic to the platform.

Speaker #5: So, relying on our unique IPs product matrix and differentiated campaigns, we're able to tailor marketing solutions for advertisers and tap into more monetization potential.

Speaker #5: For example, we organically combined physics knowledge and delivered it in the physics class, along with industry practice applications of applied physics, to help brand advertisers showcase their technological strengths and enhance brand value.

Charles Zhang: For example, we organically combine the physics knowledge delivered in the physics class with industry practices, applications of the applied physics, to help brand advertisers to showcase their technological strengths and brand value. Next, turning to our online game businesses. During the quarter, our online game business performed well with revenues exceeding our prior guidance. In our PC game business, we rolled out a series of crossover content with the renowned wuxia comic franchise, Storm Riders, 风云, for both regular TLBB PC and TLBB Vintage. We also introduced a new character development system for regular TLBB PC. In addition, we launched the new content and gameplay for TLBB: Return to enrich the player experience. Turning to our mobile game business. We launched an expansion pack to celebrate the anniversary of Legacy TLBB Mobile, as well as certain in-game promotional events, which drove an increase in player engagement.

Speaker #5: Next, turning to our online game businesses. During the quarter, our online game business performed well, with revenues exceeding our prior guidance in our PC game business.

Speaker #5: We rolled out a series of crossover content with the renowned comic franchise Storm Riders for both regular TLBB PC and TLBB Vintage. We also introduced a new character development system for regular TLBB PC.

Speaker #5: In addition, we launched new content and gameplay for TLBB, returning to enrich the player experience. Turning to our mobile game business, we launched an expansion pack to celebrate the anniversary of Legacy TLBB Mobile, as well as certain in-game promotional events, which drove an increase in player engagement.

Speaker #5: Revenue for this game remained stable on a sequential basis. Next quarter, we'll continue to launch expansion packs and content updates for the TLBB series and other titles to further enhance player engagement.

Charles Zhang: Revenue for this game remains stable on a sequential basis. Next quarter, we will continue to launch expansion packs and content updates for the TLBB series and other titles to further enhance player engagement. Looking ahead, we'll remain committed to our top game strategy. On the product development front, we'll adhere to systematic R&D processes, drive implementation of advanced technologies, and enhance our research and development R&D capabilities through continuous experimentation and validation, striving to bring more high-quality games to the players. Regarding our pipeline, we seek to further unlock the potential of our TLBB IP. Meanwhile, as we maintain our competitive edge in the MMORPGs, we will continue to diversify our portfolio with multiple types of games and expand our product offerings with global appeal. Now, I'd like to provide an update on the ongoing share repurchase program.

Speaker #5: Looking ahead, we'll remain committed to our top game strategy. On the product development front, we'll adhere to systematic R&D processes, driving implementation of advanced technologies and enhancing our research and development (R&D) capabilities through continuous experimentation and validation.

Speaker #5: Striving to bring more high-quality games to the players regarding to our pipeline, we seek to further unlock the potential of our TLBB IP. Meanwhile, as we remain as we maintain our competitive edge in the MMRO RPGs, we'll continue to diversify our portfolio with multiple types of games and expand our product offerings with global appeal.

Speaker #5: Now, I'd like to provide an update on the ongoing share repurchase program. As of August 6, 2026, Sohu had repurchased 9.4 million ADS at an aggregate cost of approximately $124 million.

Charles Zhang: As of 6 August 2026, Sohu had repurchased 9.4 million ADS for an aggregate cost of approximately $124 million. Moreover, Sohu today announced that its board of directors authorized repurchases to continue on an open-ended basis until the maximum authorized amount of $150 million is reached. With that, I'll now turn the call over to our CFO, Joanna. Please.

Speaker #5: Moreover, Sohu today announced that its board of directors authorized repurchases to continue on an open-ended basis until the maximum authorized amount of $150 million is reached.

Speaker #5: With that, I'll now turn the call over to our CFO, Joanna. Please go ahead.

Speaker #2: Thank you, Charles. I will now walk you through the key financials of our major segments for the second quarter of 2026. All numbers are on a non-GAAP basis. You may find a reconciliation of non-GAAP to GAAP measures on our IR website.

Joanna Lv: Thank you, Charles. I will now walk you through the key financials of our major segments for Q2 2026. All numbers are on a non-GAAP basis. You may find a reconciliation of non-GAAP to GAAP measures on our IR website. For Sohu Media Platform, quarterly revenues were $90 million, flat with the same quarter last year. Quarterly operating loss was $71 million, compared with an operating loss of $69 million in the same quarter last year. For Changyou, quarterly revenues, $117 million, compared with $107 million in the same quarter last year. Quarterly operating profit was $56 million, compared with an operating profit of $51 million in the same quarter last year. For Q3 2026, we expect marketing service revenues to be between $40 million and $50 million. This implies an annual increase of 3% to 10% and a sequential decrease of 1% to 8%.

Speaker #2: For Sohu Media Platform, quarterly revenues were $19 million, flat with the same quarter last year. Quarterly operating loss was $71 million, compared with an operating loss of $69 million in the same quarter last year. For Changyou, quarterly revenues were $117 million.

Speaker #2: Compared with $107 million in the same quarter last year, quarterly operating profit was $56 million. Compared with an operating profit of $51 million in the same quarter last year, for the third quarter of 2026, we expect marketing service revenues to be between $14 million and $50 million.

Speaker #2: This implies an annual increase of 3% to 10% and a sequential decrease of 1% to 8%. Online game revenues are expected to be between $105 million and $150 million.

Joanna Lv: Online game revenues to be between $105 million and $115 million. This implies an annual decrease of 29% to 35% and a sequential decrease of 1% to 10%. Both non-GAAP and GAAP net loss attributable to Sohu.Com Limited to be between $30 million and $23 million. This forecast reflects Sohu's management current and the preliminary review, which is subject to substantial uncertainty. This concludes our prepared remarks. Operator, we would now like to open the call to questions.

Speaker #2: This implies an annual decrease of 29% to 35%, and a sequential decrease of 1% to 10%. Both non-GAAP and GAAP net loss attributable to Sohu.com Limited is expected to be between $30 million and $23 million.

Speaker #2: This forecast reflects Sohu management's current and preliminary view, which is subject to substantial uncertainty. This concludes our prepared remarks. Operator, we would now like to open the call to questions.

Speaker #1: Thank you very much. Now we will conduct the Q&A session. Just a moment for our first question, please. The first question comes from Thomas Chun from Jefferies.

Operator: Thank you very much. Now we will conduct the Q&A session. Just a moment for our first question, please. First question comes from Thomas Chong from Jefferies. Please go ahead.

Speaker #1: Please go ahead.

Thomas Chong: Hi, good evening, Charles, and management. Thanks for taking my question. My question is about the good result that we saw in Q2. I think last earnings call, Charles, you mentioned about the advertising sentiment is just so-so, not great. Is there any change in your view about the advertising outlook in H2? A follow-up question is more about the World Cup. I remember last time, Charles, you talked about World Cup should be a small event. Just want to see if there's any change in your view about the World Cup impact. That's number one. Number two is about the recent trend in advertising sentiment, in particular for different categories like auto, IT, FMCG. Can you provide some color about the H2 outlook?

Speaker #3: Hi, good evening Charles and management, and offense for taking my question. My question is about the good result that we saw in Q2. I think last earnings call, Charles, you mentioned that the advertising sentiment was just so-so, not great.

Speaker #3: Is there any change in your view about the advertising outlook in the second half? I think that's number one. And then our follow-up question is more about the World Cup.

Speaker #3: I remember last time, Charles talked about the World Cup being a small event. Just want to see if there's any change in your view about the World Cup's impact.

Speaker #3: That's number one. And then, number two is about the recent trend in advertising sentiment, in particular for different categories like auto, IT, and FMCG. Can you provide some color about the second half outlook?

Speaker #3: And then, secondly, I think on the gaming side, may I ask about the quarter-to-date performance so far for the TLBB series? Is it at the low end or the high end of the guidance quarter-to-date?

Thomas Chong: Secondly, I think on the gaming side, may I ask about the quarter to date performance so far for the TLBB series? Is it at the low end or the high end of the guidance quarter to date? Thank you.

Speaker #3: Thank you.

Speaker #4: Okay. Regarding your first part about Sohu Media or the social media platform and advertising—yes, we actually beat the forecast. The answer to your question is still similar.

Charles Zhang: Okay, your first part about the Sohu media or social media platform, the advertising. Yeah, we actually beat the forecast, the answer to your question is still similar to last time, that the macroeconomic situation is still very bad, actually bad, and sloppy. Advertisers kind of are now very cautious in spending. Because of our unique marketing offerings, we were able to achieve actually some kind of growth compared with Q1. Well, Q1 seasonality, but yes, we actually have some growth beyond the forecast because of our innovative marketing solution that we provided to our advertisers, especially combined our online social media platform and also offline activities with live streaming, with events.

Speaker #4: To last time, that the macroeconomic situation is still very bad. Actually bad. And sloppy advertisers kind of are now very cautious in spending. But because of our unique marketing offerings, so we were able to achieve actually some kind of growth compared with Q1.

Speaker #4: Well, Q1 is seasonality, but yes, we actually have some growth beat the forecast because of our innovative marketing solution that we provided to our advertisers, especially by combining our online social media platform and also offline activities.

Speaker #4: With live streaming, with events and so now the marketing advertising side is very different from before like a few years ago when actually advertisers tend to especially brand advertisers tend to spend less on the standard advertising on channels, on the traditional in Chinese called inguang toufang.

Charles Zhang: Now the marketing advertising side is very different from before, a few years ago when actually advertisers, especially brand advertisers, tend to spend less on the standard advertising on channels, on the traditional. They are all trying to create the maximum effect of viral distribution, or viral online through key influencers or KOLs, and to use the social networks. Our solution, our social platform, we are able to provide exactly that kind of marketing services. In terms of categories, still the auto is 33%, FMCG 20%, and IT 17%. All three areas are not doing well. I mean, the macroeconomic issues, they're all spending less, so more cautious. The World Cup, actually, yes, there's not much impact in terms of the income, I mean, the advertising.

Speaker #4: They are all trying to create the maximum effect of virus distribution or going viral online through key influencers or KOLs, and to use the social networks.

Speaker #4: That's and our solution, our social platform just provide are able to we are able to provide exactly that kind of marketing services. In terms of categories, so still the auto is 33% and FMCG 20%, IT 17%, and all three areas are not doing well.

Speaker #4: I mean, the macroeconomic situation—everyone's spending less. I mean, people are still more cautious. So, the World Cup, actually yes, there's not much impact in terms of income.

Speaker #4: I mean, the advertising. But for the World Cup, we did organize activities for watching World Cup games and tournaments, which helped to promote or develop our ability to acquire users.

Charles Zhang: The World Cup, we did organize the activities of watching World Cup games and tournament, which to promote or develop or to acquire users. It's more to the consumer side, I mean, the user side. Yeah. I hope I answer your question.

Speaker #4: It's more on the consumer side—I mean, the user side. Yeah, I hope I answered your question.

Thomas Chong: Thank you.

Speaker #1: Thank you.

Charles Zhang: Gaming. Yes.

Speaker #4: Gaming. Yeah.

Speaker #2: Thomas Chai, your question is to ask us how the third quarter game's performance is, including TLBB game's performance. Are we now approaching the high or low end of the guidance?

Speaker #5: 从已经过去的时间来看目前表现基本符合预期但是因为还有一个多月的时间我们有些内容和活动还没有放出这些内容活动也没有办法做很精确的预估所以最终情况还是要看天龙系列的端游和手游这些内容和活动放出之后的结果

Speaker #2: For the past almost two months, the performance is largely in line with our expectation, but still, we have more than one month to go, and there are still some content and activities to be released which are not very easy to forecast in terms of their performance. So, eventually, it will depend on the performance of these content and activities. Thank you.

Chang Yu: From the past almost 2 months, the performance is largely in line with our expectation. Still we have more than 1 month time to go, and there are still some content and activities to be released, which are not very easy to forecast their performance. Eventually, it will depend on the performance of these content and activities.

Charles Zhang: Thank you.

Chang Yu: Thank you.

Speaker #3: Got it. Thank you.

Thomas Chong: Got it. Thank you.

Speaker #1: Thank you very much. Just a moment for our next question, please. The next question comes from Alicia Yep of Citigroup. Please go ahead with your question.

Operator: Thank you very much. Just a moment for our next question, please. Next question comes from the lines of Alicia Yap from Citigroup. Please go ahead with your question.

Alicia Yap: Hi. Good evening. Thank you for taking my questions.

Speaker #2: Hi. Good evening. Thank you for taking my questions. Good evening, Charles and management. I have two questions. First, I wanted to ask about the buyback.

Operator: Okay.

Alicia Yap: Good evening to Charles and management. I have two questions. First, I wanted to ask on the buyback. I think you mentioned the board amended the existing buyback program to be open-ended rather than it was supposed to be expired, I think, in November. Just wanted to know what's the rationale behind. Does that mean that, or does that imply or suggest that the remaining $26 million of the outstanding, it is high chance that you might not finish by that 30 November, so that you are making it open-ended so that you can continue to finish that $26 million before you announce a new plan? Any kind of the reasons that you can share with us would be great. The second question is a follow-up on the online advertising guidance for Q3.

Speaker #2: I think you mentioned the board amended the existing buyback program to be open-ended, rather than expiring in November as it was supposed to.

Speaker #2: So, just wanted to know what's the rationale behind. Does that mean, or does that imply or suggest, that the remaining $26 million of the outstanding, it is highly likely that you might not finish by that November 30th? So, you are making it open-ended so that you can continue to finish that $26 million before you announce a new plan.

Speaker #2: So any kind of reasons that you can share with us would be great. And then, the second question is a follow-up on the online advertising guidance for Q3.

Speaker #2: I know maybe it's just that previously the base wasn't that high, but still, it is the first time in a long time that you are now expecting positive growth on the year-over-year.

Alicia Yap: I know it's maybe just from previously, the base wasn't that high, but still, it is the first time for a long time that you are now expecting a positive growth on the year-over-year. I know you just mentioned the macro, the budget sentiments remain quite weak, but it does look like I don't know whether the Q3 positive growth is the beginning of the positive growth trend after your ad revenue has been declining for such a long time. Maybe if you can also illustrate despite this weak macro, but if this Q3 guidance is the first sign of potentially the more positive year-over-year trend going forward. Thank you.

Speaker #2: I know you just mentioned the macro. The budget sentiments remain quite weak, but it does look like—I don't know—whether the Q3 positive growth is the beginning of a positive growth trend after your ad revenue has been declining for such a long time.

Speaker #2: So maybe if you can also illustrate, despite it being a weak macro, is this Q3 guidance the first sign of potentially a more positive year-over-year trend going forward?

Speaker #2: Thank you.

Speaker #4: Okay, Alicia. So for your first question, you got it exactly right. Yes, because of the daily trading volume limitation, we could not finish the $150 million by November.

Charles Zhang: Okay, Alicia Yap. For your first question, you got it exactly right. Yes, because of the daily trading volume limitation, we could not finish the $150 million by November. We extended the time to open the schedule so that we can finish that $150 million, to finish the $26 million left. Your second question, yes. Basically, as I said earlier, that the macro is still bad, sloppy, and people are cautious in spending. The economy, but individual, but Sohu, we are actually achieving some kind of, in Chinese called the . Because the base is small, so we are able to provide some unique marketing solutions so that advertisers buy in. They like the kind of solution that we provide to them. Yes, for a long time, we're looking at some kind of growth for the first time in a long time.

Speaker #4: So we extended—I mean, extended the time to an open schedule so that we can finish that $150 million to cover the remaining $26 million left.

Speaker #4: And your second question, yes. Basically, as I said earlier, the macro is still bad, sloppy, and people are cautious in spending. I mean the macro, the economy, but individually, Sohu is actually achieving some kind of, in Chinese, what we call niche growth.

Speaker #4: We are kind of, because the base is small, so we are able to provide some unique marketing solutions so that advertisers buy in. They like the kind of solutions that we provide to them.

Speaker #4: And we're looking at—yes, we are looking at, for a long time, we were looking at some kind of growth for the first time in a long time.

Alicia Yap: I see. Okay. Thanks, Charles Zhang. Maybe lastly, if I can, I wanted to follow up on the gaming question. I think typically, Q1, Q3 should be a seasonally stronger quarter. Your Q2, you beat your guidance, but yet your Q3 guidance on gaming seems to be implying sequential decline, rather than seasonality-wise, it should be a sequential increase. Maybe if you can quantify it or give us some colors how you were seeing or how you're actually thinking about the seasonality versus your portfolio performance. Thank you.

Speaker #2: I see. Okay, thanks, Charles. Maybe lastly, if I can, I wanted to follow up on the gaming question. I think typically Q1 and Q3 should be seasonally stronger quarters.

Speaker #2: So, in your Q2, you came in and you beat your guidance, but yet your Q3 guidance on gaming seems to be implying a sequential decline. Rather than seasonality-wise, it should be a sequential increase.

Speaker #2: So maybe if you can quantify it or give us some color on how you were seeing, or how you're actually thinking about, the seasonality versus your portfolio performance.

Speaker #2: Thank you.

Speaker #6: Alicia,想问的是通常来说他觉得我们一二季度的话游戏表现会比较强。我们二季度实际上当时我们给出的指引也是环比下降的，但实际上也是超预期了。所以他想再请我们解释一下游戏的这个季节性的这个趋势大概是怎么样的。

Chang Yu: The outperformance of the Q2 is mainly due to better-than-expected performance of some of our older games, including TLBB PC, for which the expansion packs that we launched worked very well for our players. Several of our older games, all of them performed better than our expectations. The performance of the Q2 is indeed quite well. For the Q3, we expect the older games to experience some natural decline, which is normal because they have been operated for a long time.

Speaker #5: 二季度游戏超预期主要是天龙端游的部分老游戏它的表现优于预期。就是它的这个制造品和活动做得比较成功。

Speaker #6: Second quarter is mainly due to outperformance—better than expected performance—of some of our older games, including TLPVPC, for which the expansion packs that we launched worked very well for our players.

Speaker #5: 对这几个老游戏在第二季度都比预期做得好一些。

Speaker #6: Several of our older games, all of them, performed better than our expectations.

Speaker #5: 上季度我们的收入指引也是基于因为二季度确实是做得比较好的。所以上季度我们是估计这些老游戏正常然后自然的下滑吧。

Speaker #6: So, the performance of the second quarter is indeed quite good. For the third quarter, we expect the older games to experience some natural decline.

Speaker #6: Which is normal because they have been operated for a long time.

Speaker #2: Okay. Thank you so much.

Alicia Yap: Okay. Thank you so much.

Speaker #5: 这些老游戏都做得。

Speaker #6: Mainly because of the better-than-expected performance of the older games in the second quarter. Thank you.

Chang Yu: Mainly because of the better-than-expected performance of the older games in the Q2. Thank you.

Speaker #1: Thank you. If you wish to ask a question to the management, please press *11 on your telephone keypad. Thank you all for the questions.

Operator: Thank you. If you wish to ask a question to the management, please press star one one on your telephone keypad. Thank you all for all the questions. This concludes the Q&A session, as I see no further questions. This also concludes today's conference call. Thank you for participating. You may now disconnect. Thank you.

Speaker #1: This concludes the Q&A session, as I see no further questions. This also concludes today's conference call. Thank you for participating. You may now disconnect.

Speaker #1: Thank you.

Charles Zhang: Thank you.

Chang Yu: Thank you.

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