Sohu.com(US:SOHU)2023-02-21 18:42Financial Performance - Total revenues for Q4 2022 were $160 million, down 17% year-over-year and 13% quarter-over-quarter [7] - Brand advertising revenues were $29 million, down 14% year-over-year but up 12% quarter-over-quarter [8] - Online game revenues were $121 million, down 16% year-over-year and 18% quarter-over-quarter [8] - GAAP net loss attributable to Sohu.com Limited was $7 million, compared to a net income of $4 million in Q4 2021 [8] - For the full year 2022, total revenues were $734 million, down 12% compared to 2021 [9] Business Segment Performance - Sohu Media Portal revenues for Q4 were $16 million, down 16% year-over-year and up 9% quarter-over-quarter, with an operating loss of $32 million [15] - Sohu Video revenues for Q4 were $16 million, down 28% year-over-year and up 1% quarter-over-quarter, with an operating loss of $21 million [16] - Changyou's online game revenues for Q4 were $122 million, down 16% year-over-year and 18% quarter-over-quarter, with an operating profit of $54 million [16] Market Insights - The overall advertising market outlook for 2023 is optimistic, with companies beginning to spend on marketing again [20] - The automotive and FMCG sectors are expected to lead in advertising spending recovery [20] Company Strategy and Industry Competition - The company plans to continue investing in product refinement and user acquisition to enhance stickiness and user engagement [21] - There is a focus on AI technology and adapting algorithms for better content delivery [22] - The company aims to launch new games, including TLBB, in Q3 2023, while also considering share buybacks [24] Management Commentary on Operating Environment and Future Outlook - Management expressed optimism about the advertising market recovering post-COVID, with expectations of increased spending in 2023 [20] - The first quarter of 2023 is expected to show improvement, although it remains a slow season [29] Other Important Information - Non-GAAP net loss for Q4 2022 was $2 million, compared to a net income of $0.2 million in Q4 2021 [8] - The company anticipates brand advertising revenues for Q1 2023 to be between $20 million and $23 million, indicating a potential annual decrease [17] Q&A Session Summary Question: Overall advertising industry outlook in 2023 - Management sees an optimistic outlook for the advertising market in 2023, with increased spending expected from companies [20] Question: Use of cash and investment strategies - The company plans to invest in product refinement and user acquisition, particularly in Sohu Video and Sohu Media Portal [21] Question: Launch timing for new games and potential share buybacks - New TLBB is planned for launch in Q3 2023, and share buybacks are a possibility [24] Question: Drivers for sequential improvement in gaming business - Promotional activities around Chinese New Year are expected to drive engagement and revenue in the gaming segment [28] Question: Advertising business guidance and year-over-year growth - The first quarter of 2023 is expected to show a decrease in advertising revenue year-over-year, but management is optimistic about recovery in Q2 [29]