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Sohu.com(SOHU) - 2024 Q3 - Earnings Call Transcript
SOHUSohu.com(SOHU)2024-11-12 17:52

Financial Performance and Key Metrics - In Q3 2024, total revenues were 152million,representinga5152 million, representing a 5% year-over-year increase but a 12% decrease quarter-over-quarter [7] - Brand advertising revenues were 19 million, down 15% year-over-year and 6% quarter-over-quarter [7] - Online game revenues reached 128million,up9128 million, up 9% year-over-year but down 13% quarter-over-quarter [7] - GAAP net loss attributable to Sohu.com Limited was 16 million, compared to a net loss of 14millioninQ32023andanetlossof14 million in Q3 2023 and a net loss of 38 million in Q2 2024 [8] - Non-GAAP net loss attributable to Sohu.com Limited was 12million,comparedtoanetlossof12 million, compared to a net loss of 10 million in Q3 2023 and a net loss of 34millioninQ22024[9]BusinessSegmentPerformance−SohuMediaandSohuVideorevenueswere34 million in Q2 2024 [9] Business Segment Performance - Sohu Media and Sohu Video revenues were 23 million, down from 27millioninthesamequarterlastyear,withanoperatinglossof27 million in the same quarter last year, with an operating loss of 72 million compared to a loss of 66millioninthepreviousyear[18]−Changyou′sonlinegamebusinessrevenueswere66 million in the previous year [18] - Changyou's online game business revenues were 129 million, up from 118millioninthesamequarterlastyear,withanoperatingprofitof118 million in the same quarter last year, with an operating profit of 62 million compared to 52millioninthepreviousyear[18]MarketDataandKeyMetrics−Theadvertisingmarketremainssoft,withagradualdeclineingrowthrates,althoughuniquemarketingeventshelpedachievebetter−than−expectedresultsinQ3[22][23]−ThecompanyanticipatesbrandadvertisingrevenuesforQ42024tobebetween52 million in the previous year [18] Market Data and Key Metrics - The advertising market remains soft, with a gradual decline in growth rates, although unique marketing events helped achieve better-than-expected results in Q3 [22][23] - The company anticipates brand advertising revenues for Q4 2024 to be between 17 million and 19million,indicatingayear−over−yeardecreaseof619 million, indicating a year-over-year decrease of 6% to 16% [19] Company Strategy and Industry Competition - The company is focusing on maintaining user stability and offering benefits rather than aggressively increasing revenue in the gaming segment [25] - The strategy includes optimizing R&D processes and expanding international presence while maintaining competitiveness in MMORPGs and exploring new game types [15] Management Commentary on Operating Environment and Future Outlook - Management noted that the advertising market is not robust, but there are signs of potential recovery due to recent policy stimulus [23] - For Q4 2024, the company expects a non-GAAP net loss between 26 million and 36millionandaGAAPnetlossbetween36 million and a GAAP net loss between 30 million and 40million,reflectingsubstantialuncertainty[19]OtherImportantInformation−ThesharebuybackprogramhasbeenextendedforanadditionalyeartoNovember10,2026,with40 million, reflecting substantial uncertainty [19] Other Important Information - The share buyback program has been extended for an additional year to November 10, 2026, with 42 million spent on repurchasing 3.4 million ADS as of November 7, 2024 [16] Q&A Session Summary Question: Advertising outlook and budget spend - Management indicated that the advertising market is steady but gradually losing growth, with unique marketing events contributing to better-than-expected results [22][23] Question: Gaming guidance and revenue performance - The revenue beat in Q3 was attributed to new content and servers for TLBB Vintage and regular TLBB PC, with conservative guidance for Q4 aimed at maintaining user stability [24][25] Question: Share buyback execution - The buyback program's slow execution is due to daily trading volume limits, necessitating the extension of the program to 2026 [26]