Sohu.com Limited

Ladies and gentlemen, thank you for standing by for joining SOHU's second quarter 2022 earnings conference call. Good evening. At this time, all participants are in a listen-only mode. After management 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, Huang Pu, Investor Relations Director of Sohu. Please go ahead.

Thanks, operator. Thank you for joining us to discuss Sohu's second quarter 2022 results. On the call are Chairman and Chief Executive Officer, Dr. Charles Zhang, CFO Joanna Liu, and Vice President of Finance, James Stone. Also with us are China's CEO, Du Wenquan, and CFO, Bing Wang. Before management begins their prepared remarks, I would like to remind you of the company's safe harbor 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 inherent risks and uncertainties. We caution you that, A number of important factors could cause actual results to differ materially from those contained in any four leaking statements. For more information about the potential risks and uncertainties, please refer to the company's findings with the Securities and Exchange Commission, including the most recent annual report on Form 20S. With that, I will now turn the call over to Dr. Charles Zhang. Charles, please proceed.

Thank you, everyone, for doing your call. In the second quarter of 2022, COVID-19 and related prevention measures disrupted normal economic activity nationwide. But we met the challenge proactively by refining our products and technology and exploring a range of monetization opportunities. Our brand advertising revenue met the high end of our previous guidance during the quarter. Thanks to the solid performance of our online game business, the group's profitability exceeded guidance. For Soho Media Portal and Soho Video, we continue to generate and distribute reliable news and premium content, reinforcing our competitiveness and credibility as a mainstream media platform. Leveraging the differentiated advantages of the SOHU product matrix, we extended our live broadcasting to a greater number of scientific fields and to various online and offline events. For online games, our performance was stable during the quarter, with revenues in line with our guidance. I'll go into details about each of these businesses in a moment, but first, Let me have a quick look overview of the financial performance. For the second quarter of 2022, total revenues, $195 million, down 5% year over year and up 1% quarter over quarter. Brand advertising revenues, $25 million, down 32% year over year and up 5% quarter over quarter. Online game revenues, 157 million, up 4% year-over-year and a flat quarter-over-quarter. Gap net income attributable to silver.com limited was $9 million compared with $22 million in the second quarter of 2021 and $3 million in the first quarter of 2022. Non-GAAP net income attributable to Soho.com Limited was $12 million, compared with $25 million in the second quarter of 2021 and $9 million in the first quarter of this year. Now, I'll go through some of our key businesses. First, Media Portal and Soho Video. So, Soho Media Portal is improving our product upgrading technology, and refining our algorithms and their accuracies. To enhance user experience, we stimulated content generation and user interaction to improve the features that drive content distribution. During the quarter, our advanced live broadcasting technology, strong operating track record, and extensive media resources reinforced our credentials as a mainstream media platform that helped us better capture advertising buyers. For Zoom Video, we developed compelling long and short-form content with our chain engine strategy and explored monetization opportunities by integrating the live broadcasting into unique and creative events. Through our continuous efforts, we have built a strong and credible reputation as a science and knowledge-based live broadcasting platform and attracted hundreds of leading professional broadcasters in various fields to our platform. In the long-form format content, we kept producing original dramas and reality shows to enrich our content library. In the second quarter, we completed shooting and entered the post-production stage of several original dramas, such as the sequel of Mysterious Love , a big hit combining idol romance and crime scenes. Next, turning to online game business. During the second quarter of 2022, online gaming revenues were in line with our guidance. With lower-than-expected operating expenses, the group's net income for the second quarter exceeded the high end of our guidance. In our business line for PC games, we introduced a new PvP event for regular TLBB PC and upgraded the artistic design of game characters. With TLBB Vintage, we introduced a new dungeon and upgraded character development system for its new expansion pack. In addition, in April we launched TLBB Vintage on the Wii game platform, which brought some long-time TLBB players back to the game. With mobile games, we launched an expansion pack for the anniversary of legacy TLBB Mobile with the addition of skills development system and its revenue remained stable on a sequential basis. The next quarter, we'll roll out new content for TLBB PC, legacy TLBB Mobile, and other games to keep the players engaged. Against an ever-changing environment, We will stick to our top game strategy by promoting innovation, building the capacity of our team, and rolling out more high-quality mobile games. In terms of game pipeline, while maintaining the core competitiveness of MMORPG games, we will also invest in games of multiple genres, including the card RPGs and casual games. We'll now turn the call over to Joanna, our CFO, who will walk you through our financial results. Joanna.