Sohu.com Limited

Ladies and gentlemen, thank you for standing by and good evening. Thank you for joining Soho's third quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be a question and answer session. Today's conference call is being recorded. If you have any objections, you may disconnect at this time. I would now like to turn the conference over to your host for today's conference call, Kuang Tu. Investor Relations Director of Soho. Please go ahead.

Thanks, Supervisor. Thank you for joining us today to discuss Soho's sub-quarter 2021 results. On the call are Chairman and Chief Executive Officer, Dr. Charles Zhang, CFO, Joanne Lu, and Vice President of Finance, James Dunn. Also with us today are Chang'e CEO, De Wen Chen, and CFO, Yongbin Wang. Before management begins their prepared remarks, I would like to remind you of the company's state of the art statement, in connection with today's conference call. Except for the historical information contained herein, the matters discussed on this call may contain forelooking statements. These statements are based on current plans, estimates, and projections, and therefore you should not place undue reliance on them. Forelooking statements involve hearing risks and uncertainties. We caution you that a number of important factors could cause actual results to differ materially from those contained in any forelooking statement. For more information about the potential risks and uncertainties, please refer to the conference findings with the Securities and Exchange Commission, including the most recent annual report on Form 20-S. Please also be reminded that SOGO's results of operations and the disposal gain recognized in this quarter have been classified as discontinued operations. The results that we talk about are related to continuing operations only. With that, I will now turn the call over to Dr. Charles Zhang. Charles, please proceed.

Thanks, Huangpu. And thank you to everyone for joining our call. For the third quarter of 2021, facing spot outbreaks of the COVID-19 pandemic and uncertainties in the macroeconomic environment, we continued to focus on reintroducing refining our technology and developing products. Overall, we delivered better than expected top line and bottom line performance, thanks to the solid performance of our online game business. For social media, we kept improving our products while constantly expanding premium content and stimulating social media distributions. which further consolidated our influence as a mainstream media platform. For Soho Video, we continued to focus on our tuned engine strategy. We applied our advanced live broadcasting technologies into various events and scenarios as an effective tool for generating even more video content. For Game Changyou, Online games performed well during the quarter, with revenue exceeding the high end of our prior time. Now, let me go into details about each of these businesses in a moment. I'll go into each of the businesses in detail in a moment, but first, a quick overview of our financial performance. Third quarter of 2021, total revenues, $216 million up 37% year-over-year and 6% up quarter-over-quarter. Brand advertising revenues were $34 million, down 18% year-over-year and 8% quarter-over-quarter. Online game revenues, $167 million up 65% year-over-year and 10% quarter-over-quarter. Gap net income from continuing operations attributable to SOHO.com Limited, was $12 million, compared with a net loss of $15 million in the third quarter of 2020, and net income of $22 million in the second quarter of 2021. Non-GAAP net income from continuing operations attributable to Soho.com Limited, $17 million, compared with a net loss of $7 million in the third quarter of last year, and net income of $25 million in the second quarter of this year. Now I'll go through some of the key businesses. First, Media Portal and SoFu Video. For SoFu Media Portal, we constantly work on upgrading our products and refining our technology. During the quarter, we further enhanced the audio function of our news app and significantly improved the overall audio-video user experience. And this audio function has largely improved the content distribution efficiency and further demonstrated its differentiation advantage. With this video, we were able to execute the two-engine strategy. We kept working on developing long-form original drama and series and reality shows to enrich our content library and also the short video content. Our advanced live broadcasting technology has been comprehensively integrated into our product mix and widely adopted in various scenarios, including content marketing campaigns as well as important social news and major events. The technology also plays an important role in our daily live reality show and supports the creation of our premium content. Next, turning to Changyou. For the third quarter of 2021, Changyou performed well and its revenue exceeded the high end of our prior guidance. The licensed card game Little Raccoon Heroes was doing good after its launch in August, while games such as TLBB PC and Legacy TLBB Mobile managed to hold on to users and perform better than expected as they continued to age. For PC games, we launched new expansion packs and holiday events for Qixi and other festivals for both regular TLBB PC and TLBB Vintage. We also further optimized TLBB Vintage based on player feedback. For Lexi TLBB Mobile, we launched an expansion pack featuring a new dungeon and storyline, which is well received by players. Next quarter, we'll roll out new content for TLBB PC, Legacy TLBB Mobile, Little Raccoon Heroes, and other games to sustain their vitality. In terms of new game pipeline, we're developing and fine-tuning several key games, which we'll introduce to players later. We'll continue to execute our top game strategy, promote innovation, and roll out more high-quality mobile games, including MMORPGs and other diversified products. Before I pass the call to Joanna to go through our financial results in detail, we're pleased to announce that on November 13th this year, our board of directors authorized a share repurchase program of up to $100 million over a year period. The repurchase program underscores our continued confidence in our long-term growth prospects, as well as ongoing commitment to increase shareholder value. With that, I will now turn to Joanna to give our financials.