Sohu.com(SOHU) - 2019 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - For Q3 2019, total revenues were $482 million, up 9% year-over-year and 4% quarter-over-quarter [9] - Non-GAAP net loss attributable to Sohu.com Limited was $17 million, a decrease of 26% compared to the previous quarter [9] - Excluding Sogou and Changyou, the non-GAAP net loss was $53 million, an increase of 31% year-over-year [9] Business Line Data and Key Metrics Changes - Sohu Media Portal revenues were $25 million with a quarterly loss of $31 million [18] - Sohu Video revenues were $22 million with a quarterly loss of $20 million [18] - Sogou revenues were $350 million, up 14% year-over-year and 4% quarter-over-quarter, with net income of $41 million [19] - Changyou revenues were $111 million, up 9% year-over-year but down 4% quarter-over-quarter, with net income of $34 million [19] Market Data and Key Metrics Changes - Sogou maintained its position as China's second-largest search engine, with mobile keyboard DAU reaching 464 million, up 14% year-over-year [15] - Brand advertising revenues for Q4 2019 are expected to be between $40 million and $45 million, implying an annual decrease of 21% to 30% [20] Company Strategy and Development Direction - The company is focusing on cost-saving initiatives and diversifying revenue streams, particularly in Sohu Media and Sohu Video segments [6][7] - Sohu Media is enhancing its content quality and hosting events to attract advertisers [10][11] - Sogou is leveraging its AI capabilities to support innovations in search and mobile keyboard businesses [15][16] Management Comments on Operating Environment and Future Outlook - Management noted ongoing macroeconomic uncertainties but indicated that total revenue and bottom line exceeded prior guidance [6] - The company expects to achieve profitability on a group level in the coming quarters, despite challenges in the media advertising business [27] Other Important Information - The company is implementing strict budget controls and improving resource utilization to enhance monetization and revenue growth potential [12] - Changyou's online game business continues to perform well, with a focus on maintaining user engagement [17] Q&A Session Summary Question: Impact of advertiser spending on SMEs vs. key accounts - Management indicated that key accounts are more affected by the macroeconomic situation, particularly in the auto industry, while SMEs are less impacted [24] Question: Regulatory environment and profitability expectations for online video - Management stated that while losses in the media business are expected to shrink, profitability is still not reached, but group-level profitability is anticipated in the coming quarters [27] Question: Content quality improvements in Sohu Media - Management highlighted the contribution of over 600,000 writers on Sohu Hub and various events to enhance content quality and attract advertisers [30] Question: Anticipation of regulatory easing for video content - Management noted that while regulations have eased slightly, the company is focusing more on short videos and social functions rather than solely on long-form content [34]