Sohu.com(US:SOHU)2024-05-20 15:30Financial Performance Overview - In Q1 2024, total revenues were $139 million, down 14% year-over-year and 1% quarter-over-quarter [6] - Brand advertising revenues were $16 million, down 29% year-over-year and 20% quarter-over-quarter [6] - Online game revenues were $118 million, down 9% year-over-year but up 3% quarter-over-quarter [6] - GAAP net loss attributable to Sohu.com Limited was $25 million, compared to a net loss of $18 million in Q1 2023 [7] - Non-GAAP net loss attributable to Sohu.com Limited was $22 million, compared to a loss of $13 million in Q1 2023 [7] Business Segment Performance - Sohu Media and Sohu Video revenues were $20 million, down from $30 million in the same quarter last year, with an operating loss of $74 million [13] - Changyou's online game business revenues were $119 million, down from $131 million in the same quarter last year, with an operating profit of $55 million [13] Market Insights - The advertising market remains cautious, with some recovery noted in sectors such as FMCG and electric vehicles, although overall spending is still low [25][27] - The company expects brand advertising revenue in Q2 2024 to be between $18 million and $20 million, indicating a year-over-year decrease of 16% to 25% [14] Strategic Direction - The company is focusing on enhancing user experience through product refinement and algorithm optimization, as well as integrating its product matrix to stimulate content generation [5] - Sohu plans to leverage its unique IPs and differentiated advantages to create monetization opportunities through various events and campaigns [5][10] Management Commentary - Management expressed that the macroeconomic environment remains uncertain, impacting advertising spending [18] - There is an expectation for sequential growth in online game revenues, primarily driven by new game launches [19] - Increased marketing expenses for new game promotions are anticipated to contribute to wider net loss guidance for Q2 [23] Other Important Information - As of May 16, 2024, Sohu had repurchased 1.7 million ADS for approximately $17 million, with plans to complete the $150 million buyback program over the next two years [12][17] Q&A Session Summary Question: Advertising segment outlook and growth expectations - Management indicated that while there may be a quarter-over-quarter increase in brand advertising, year-over-year growth remains uncertain due to cautious spending [18] Question: Online game revenue guidance - The sequential increase in online game revenue is expected to come from new licensed games launched in Japan and South Korea, as well as a new game launched in the Chinese Mainland [19] Question: Share repurchase strategy - The company plans to complete the $150 million buyback program over approximately two years, limited by daily trading volume [17][22] Question: Impact of macroeconomic conditions on advertising - Management noted some recovery in specific sectors but emphasized that overall advertising spending remains cautious, with no direct positive impact from recent real estate policies [27][28]