Sohu.com(SOHU) - 2020 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenues for Q3 2020 were $158 million, down 6% year-over-year and 1% quarter-over-quarter [9] - Brand advertising revenues reached $41 million, down 11% year-over-year but up 8% quarter-over-quarter [9] - Online game revenues were $101 million, down 6% year-over-year and 4% quarter-over-quarter [9] - GAAP net loss from continuing operations was $50 million, compared to a net loss of $33 million in Q3 2019 [10] - Non-GAAP net loss from continuing operations was $7 million, compared to a net loss of $30 million in the same quarter last year [10] Business Line Data and Key Metrics Changes - Sohu Media Portal revenues were $25 million, down 3% year-over-year and up 9% quarter-over-quarter, with an operating loss of $23 million [15] - Sohu Video revenues were $23 million, up 1% year-over-year and 2% quarter-over-quarter, with an operating loss of $12 million [15] - Changyou's revenues, including 17173, were $104 million, down 6% year-over-year and 5% quarter-over-quarter, with an operating profit of $33 million [15] Market Data and Key Metrics Changes - The brand advertising revenue growth was attributed to sectors such as the auto industry, internet services, and real estate [20][21] - In Q3, PC games accounted for 61% of online game revenue, while mobile games accounted for 39% [23] Company Strategy and Development Direction - The company is focusing on optimizing products, refining technology, and enhancing premium content distribution [7] - Sohu Video is implementing a two-engine strategy with long-form and short-form videos, and is enhancing live streaming technology [11] - Changyou is concentrating on MMORPG mobile games and developing new games across various genres [14] Management Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macroeconomic environment but noted positive user interaction and advertiser feedback [8] - For Q4 2020, brand advertising revenues are expected to be between $37 million and $42 million, while online game revenues are projected to be between $140 million and $150 million [16] Other Important Information - Sogou's results have been excluded from the company's results due to its planned merger with Tencent [9] - The company is diversifying monetization strategies and exploring new opportunities in live streaming and live commerce [12][13] Q&A Session Summary Question: Trend for different key categories in brand advertising - Management highlighted the auto industry, internet services, and real estate as key sectors driving brand advertising growth [20][21] Question: Breakdown of PC versus mobile games and drivers for growth - In Q3, PC games accounted for 61% of revenue, while mobile games accounted for 39%. The growth in Q4 is driven by nostalgic content and new game launches [23][24] Question: Outlook for game pipeline next year - Management indicated that several games are in development, with specific launches dependent on licensing and testing [27] Question: Content investment strategy for Sohu Video - The company plans to maintain similar spending on long-form content while focusing on user-generated content and live streaming for cost efficiency [29]