Sohu.com(US:SOHU)2022-11-15 01:42Financial Performance and Key Metrics - For Q3 2022, total revenue was $185 million, down 14% year-over-year and 5% quarter-over-quarter [8] - Brand advertising revenue was $26 million, down 24% year-over-year and up 3% quarter-over-quarter [8] - Online game revenues were $149 million, down 11% year-over-year and 5% quarter-over-quarter [8] - GAAP net loss attributable to Sohu.com Limited was $22 million compared to a net income of $12 million in Q3 2021 [9] - Non-GAAP net loss attributable to Sohu.com Limited was $17 million compared to a net income of $17 million in Q3 2021 [9] Business Line Performance - Sohu Media Portal revenues were $50 million, down 11% year-over-year and 6% quarter-over-quarter, with an operating loss of $38 million [13] - Sohu Video revenues were $60 million, down 29% year-over-year and up 4% quarter-over-quarter, with an operating loss of $31 million [13] - Changyou's online game business revenues were $150 million, down 11% year-over-year and 6% quarter-over-quarter, with an operating profit of $58 million [14] Market Data and Key Metrics - The advertising market is experiencing a downward trend, with auto advertising performing relatively better while real estate is struggling [17] - FMCG showed improvement in Q3 compared to previous quarters [17] Company Strategy and Industry Competition - The company is focusing on refining products, improving operating efficiency, and enhancing monetization capabilities despite macroeconomic uncertainties [6] - Sohu is executing a Twin Engine strategy for Sohu Video, leveraging advanced live broadcasting technology and premium content [10] Management Comments on Operating Environment and Future Outlook - Management noted that the advertising market is facing challenges due to COVID-19 and macroeconomic conditions, impacting brand advertising income [22] - There is cautious optimism regarding advertising recovery, dependent on overall economic conditions and COVID-19 policies [29] Other Important Information - The company expects brand advertising revenues for Q4 2022 to be between $25 million and $28 million, indicating a potential annual decrease of 17% to 26% [14] - Online game revenues for Q4 2022 are expected to be between $118 million and $128 million, reflecting an annual decrease of 11% to 18% [14] Q&A Session Summary Question: Advertising trends across different categories and outlook for 2023 - Management indicated that the advertising market is generally declining, with auto performing better and real estate struggling [17] Question: Gaming business and approval trends in China - Management confirmed that several projects are awaiting license approval, with over 10 games in the pipeline [18] Question: Near-term advertising trends and impact of lockdowns - Management acknowledged that lockdowns negatively impacted advertising income, but unique online events helped recover some advertising dollars [22][23] Question: Use of cash and potential for share buybacks - Management is cautious about further buybacks due to economic uncertainties but remains open to future opportunities [24][30] Question: Soft gaming guidance for Q4 - Management explained that the decline is due to natural declines in some games and the impact of exchange rates [27]