Sohu.com(SOHU) - 2019 Q4 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q4 2019, total revenues were $490 million, up 5% year-over-year and 2% quarter-over-quarter [9] - Non-GAAP net income attributable to Sohu.com Limited was $7 million, compared to a net loss of $51 million in Q4 2018 [10] - For the full year 2019, total revenues were $1.85 billion, up 2% compared to 2018 [11] - Non-GAAP net loss attributable to Sohu.com Limited was $93 million for 2019, improved from a loss of $207 million in 2018 [11] Business Line Data and Key Metrics Changes - Sohu Media Portal revenues for Q4 were $23 million with a loss of $25 million [21] - Sohu Video revenues for Q4 were $22 million with a loss of $18 million, showing a 40% improvement in operating loss compared to Q4 2018 [14][21] - Sogou's quarterly revenues were $301 million, up 1% year-over-year, with net income of $39 million [22] - Changyou's quarterly revenues were $135 million, up 35% year-over-year, with net income of $63 million [22] Market Data and Key Metrics Changes - Sogou maintained its position as China's second-largest search engine, with search revenue growing faster than the industry average [18] - The mobile keyboard user base for Sogou increased to 464 million DAUs, with a 54% increase in daily voice requests year-over-year [18] Company Strategy and Development Direction - The company aims to strengthen its brand influence through high-quality original content and various events [12] - Sohu Video is focusing on a twin-engine strategy with both long-form and short-form content to enhance user engagement [13] - The company is committed to cost-saving initiatives and improving monetization capabilities across its platforms [6][14] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the slowing economy and intensified competition but emphasized the exploration of new opportunities [6] - The impact of the COVID-19 outbreak is expected to negatively affect advertising revenues, but there is optimism for a rebound as the economy recovers [15][34] - Management noted that user engagement has increased during the pandemic, particularly for video content [35] Other Important Information - The company expects total revenues for Q1 2020 to be between $400 million and $435 million, with brand advertising revenues expected to decline significantly due to the pandemic [23][24] - Non-GAAP net loss for Q1 2020 is projected to be between $25 million and $35 million [24] Q&A Session Summary Question: What are the top advertising industries for your news media in Q4? - Management indicated that the top advertising industries included auto, real estate, and internet services before the coronavirus outbreak [26][27] Question: How is the video business's cash flow and capital raising needs? - Management stated that they are implementing a low-budget strategy for video production and relying on past productions for revenue [30][31] Question: What is the guidance for brand advertising revenue decline? - Management expects both portal and video advertising to be equally impacted, with a potential rebound in Q2 if the economy recovers [34] Question: How is the competition from short-form video affecting SME advertising? - Management noted that SME income represents a small part of brand advertising revenue and has remained steady [46]