Sohu.com(US:SOHU)2022-08-08 14:50Financial Performance and Key Metrics - In Q2 2022, total revenues were $195 million, down 5% year-over-year and up 1% quarter-over-quarter [7] - Brand advertising revenues were $25 million, down 32% year-over-year and up 5% quarter-over-quarter [8] - Online game revenues reached $157 million, up 4% year-over-year and flat quarter-over-quarter [8] - GAAP net income attributable to Sohu.com Limited was $9 million, compared to $22 million in Q2 2021 [8] - Non-GAAP net income attributable to Sohu.com Limited was $12 million, down from $25 million in Q2 2021 [8] Business Line Performance - Sohu Media Portal revenues were $16 million, down 27% year-over-year and up 13% quarter-over-quarter, with an operating loss of $43 million [13] - Sohu Video revenues were $16 million, down 31% year-over-year and up 7% quarter-over-quarter, with an operating loss of $25 million [13] - Changyou's online game business revenues were $159 million, up 3% year-over-year and flat quarter-over-quarter, with an operating profit of $85 million [13] Market Data and Key Metrics - The company expects brand advertising revenues in Q3 2022 to be between $25 million and $28 million, implying a year-over-year decrease of 17% to 26% [14] - Online game revenues are expected to be between $138 million and $148 million, implying a year-over-year decrease of 11% to 17% [14] Company Strategy and Industry Competition - The company is focusing on refining products and technology while exploring monetization opportunities [6] - Sohu is enhancing its media portal and video content to reinforce its competitiveness as a mainstream media platform [6][10] - The gaming strategy includes promoting innovation and expanding into multiple genres, while maintaining core MMORPG competitiveness [12] Management Comments on Operating Environment and Future Outlook - Management noted that COVID-19 and related measures disrupted economic activity but they adapted by refining products and exploring monetization [6] - There is cautious optimism regarding advertising recovery as lockdowns are lifted, with some uptick in advertiser activity noted in June and July [17][27] - The company anticipates a larger net loss in Q3 due to increased marketing expenses for new games and promotional activities [22][32] Other Important Information - The company has completed $90 million in share buybacks and has been consistently cutting costs over the past few years [31][32] - Management expressed a preference for organic growth over acquisitions, focusing on enhancing current products and marketing efforts [34] Q&A Session Summary Question: Advertising guidance for Q3 and trends in July - Management indicated that advertising performance depends on the COVID-19 situation and noted some recovery in July [17] Question: Gaming business performance and macro uncertainties - Management acknowledged a natural decline in gaming revenue guidance for Q3 due to the previous quarter's performance [20] Question: Reasons for expected net loss in Q3 - Increased marketing expenses for new games and promotional activities were cited as primary reasons for the anticipated larger net loss [22][32] Question: Share buyback and cost optimization efforts - Management confirmed completion of $90 million in share buybacks and stated that they do not require significant cost optimization compared to peers [31][32] Question: Opportunities for acquisitions given current market conditions - Management expressed a focus on organic growth and enhancing existing products rather than pursuing acquisitions [34]