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spk11: Ladies and gentlemen, thank you for standing by and good evening. Thank you for joining SOHU's first quarter 2023 earnings conference call. At this time, all participants are in the listen-only mode. After management's prepared remarks, there will be a Q&A 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.
spk05: Thank you, Peter. Thank you for joining us to discuss SOHO's fourth quarter 2023 results. On the call are Chairman and Chief Executive Officer, Dr. Charles Zhang, CF Adrenaline, and Vice President of Finance, James Dunn. Also with us are China's CEO, Dylan Chen, and CF Yao Bin Wang. Before measurement begins their prepared remarks, I would like to remind you of the Commerce 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 forward-looking statements. These statements are based on current plans, estimates, and projections, and therefore, you should not place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results different naturally from those contained in any forward-looking statements. For more information about the potential risks and uncertainties, please refer to the Compute with the Securities and Exchange Commission, including the most recent annual report on Form 20F. With that, I will now turn the call over to Dr. Charles Zhang. Charles, please proceed.
spk09: Thanks, Wanpu, and thank you, everyone, for joining our call. In the first quarter of 2023, we hit the high end of our prior guidance for brand advertising revenue, while our bottom line performance came in well above expectations despite the impact of seasonality. At Soku Media, we further improved operational efficiency and focused on enhancing user experience through product and algorithm refinements. We closely monitored market trends and provided innovative marketing solutions to our advertisers. At Soho Video, we continue to develop both long-form and short-form original content under our Twin Engine strategy. Leveraging the advantages of our product mix metrics, we were able to consolidate our resources and proactively explore a diverse range of monetization opportunities. Online games remain stable during the quarter with revenues in line with the prior guidance. Now, let me go into detail about each of our businesses. I'll go into each of our business in a moment, but first, a quick overview of the overall financial performance. For the first quarter of 2023, total revenue, $162 million, down 16% year over year, up 1% quarter over quarter. Brand advertising revenue, $23 million, down 5% year-over-year and 22% quarter-over-quarter. Online game revenues, $129 million, down 18% year-over-year and up 7% quarter-over-quarter. Gap net loss attributable to Suhu.com Limited was $18 million. compared with a net income of $3 million in the first quarter of 2022, and net loss of $7 million in the fourth quarter of 2022. Non-GAAP net loss attributable to Seoul.com Limited was $13 million, compared with net income of $9 million in the first quarter of last year, and a net loss of $2 million in the fourth quarter of 2022. Now, we'll go through our key businesses in more detail. First, Media Portal and Soho Video. At Soho Media Portal, we harnessed the cutting edge technology to steadily optimize our products and algorithms. As a mainstream media platform, we not only deliver reliable and real-time news and information to our users, but also stimulate high-quality self-media content generation among users and expand our social network distribution. Through this effort, we have continuously improved user experiences and further strengthened our brand influence. At Soho Video, we focus on developing high-quality long-form and short-form content For the long-form content in the first quarter, we have rolled out Ye Cheng Fu and Sour Plum, Sweet Love, Qing Mei, Qing Mei, Sun Sun, Ni Wei Tian, both of which won acclaim from audiences. In April, we released a crime-themed idol romance, Love of Replica, Wei Ni, Ni Guang Er Lai. the upgraded sequel to 2021's Mysterious Love. So the Love of Replica became a hit show again at the time of its release, actually last week, and further boosted our audience base. For reality shows, we saw the successful release of On Her Way Home special edition for the Spring Festival and The On Her Way Home series has gained widespread attention and generated in-depth discussion of various social issues, helping it reach and penetrate to larger audiences. In terms of short-form content, we continue to focus on the science-related live streaming, supported by our advanced live streaming broadcasting technology. With abundant and professional reserve of broadcasters across numerous verticals and the rich offering of high quality content, Soho Video continues to consolidate its reputation as a leading science technology-based live broadcasting platform. On the monetization front, the overall market recovered moderately during the quarter, As advertising demand bounced back, we proactively explored various monetization opportunities in differentiated scenarios. For example, during the quarter, we successfully hosted the annual SOHU Fashion Awards, SOHU 25th Anniversary, SOHU Fashion Day, an offline event which has become a distinctive IP for SOHU and demonstrates our position as a mainstream media platform. the Soho Fashion Award together with the Charles physics class, my teaching physics. And also the talk under the starry sky and the talk on the shore of Stone Mountain, the interview program generated significant attention and created various hot topics and discussions on our product metrics as well as across various social media platforms. platforms. These unique campaigns leveraging by our dual platform of Soho Video and Soho News reinforced our strong brand influence and our good content and at the same time provided our advertisers with ample market exposures. So next, turning to online game business. During the first quarter of 23, Online game revenues were in line with the company's prior guidance. Within our PC games business, we launched some Chinese New Year themed holiday events and promotions for the regular TLBB PC. We continue to improve the functionality of TLBB Vintage based on players' needs and also introduced a new cross-server PVP event that matches players randomly. In our mobile game businesses, we launched updates for Lexi TLVB Mobile to celebrate the Chinese New Year, introducing not only a series of holiday events, but also optimization of clan skills. In the second quarter of 2023, we will launch expansion packs and content updates for TLBB PC, Legacy, TLBB Mobile, and other games to keep players engaged. As technology in the game business industry keeps advancing and market demand becomes deeper and more diversified, we intend to stick with our top game strategy, allocating more resources to professional talent development as well as content and technology innovation in order to roll out more high-quality mobile games. In terms of the game pipeline, while maintaining our core competitiveness in MMORPGs, we also produce games in various types, including car-based RPGs, strategy, sports, and idle games. I'll now turn the call over to our CFO, Joanna, who will walk you through our financial results. Joanna.
spk13: Thank you, Charles. I will now walk you through the key financials of our major segments. For the first quarter of 2023, all the numbers on the non-GAAP basis, you may find the reconciliation of non-GAAP to GAAP measures on our IR website. For SOHO Media Portal, Quarterly revenues were $18 million, compared with revenues $18 million in the same quarter last year. The quarterly operating loss was $35 million, compared with an operating loss of $45 million in the same quarter last year. For SOHO video, quarterly revenues were $13 million, compared with revenues $50 million in the same quarter last year. Quarterly operating loss was $32 million, compared with an operating loss of $21 million in the same quarter last year. For Changyong's online game business and 17173, quarterly revenues $131 million, compared with revenues $160 million in the same quarter last year. Quarterly operating profit was $55 million, compared with the operating profit of $85 million in the same quarter last year. For the second quarter of 2023, we expect brand advertising revenues to be between $23 million and $26 million. This implies an annual decrease of 8% to an annual increase of 4% and a sequential increase of 2% to 15%. online game revenues to be between $112 million and $122 million. This implies an annual decrease of 22% to 29% and a sequential decrease of 6% to 13%. Non-GAAP net loss attributable to SoCo.com Limited to be between $15 million and $25 million. And GAAP net loss attributable to Soku.com Limited to be between $80 million and $28 million. Our guidance reflects our current and preliminary view, which is subject to substantial uncertainty. This concludes our prepared remarks. Operator, we would now like to open the call to questions.
spk11: Thank you. We will now begin the question and answer session. If you'd like to ask a question, please press star one one on your telephone. To cancel requests, please press star one one. There'll be a short silence while questions are being collected. Thank you for your patience. One moment for the first question. Our first question comes from Thomas Chong of Jefferies. Please proceed.
spk04: Thanks, management, for taking my question. I have two questions. The first one is about advertising industry in 2023 outlook and also advertising spending budget among auto, FMCG, internet service, and property service advertisers. And my second question is about online game outlook and our game pipelines in 2023. Thanks.
spk09: So for 2023 advertising, we see the top three categories, the auto 25%, FMCG 15%, and internet service 15%. We see some opportunities for auto industry probably later in Q2 or Q3 later this year. It's because there is a new policy for the July 1st policy for a stricter emission standard. So some car auto companies trying to lower the price and try to get rid of their stockpiles. So there's some advertising on Q1 is kind of soft. It's just a negative impact on that. But for the whole year, it seems there is some opportunity. There's more competition in the auto industry, especially for electric car, new energy, fossil electric car industries. And for FMCG, we see some people have less money in spending on large items. larger item spending but for small items seems there's a kind of recovery because q1 and this year is the first first quarter and first year after the 2019 basically you know after the lifting of the you know lock up or the lockdown or the zero copies policy so everything in q1 and the q2 will be very indicative of the a normal economy, the economy should be. It seems it's less, it's bouncing back not as much as we expected, but we do see some, I would say the, you know, the lipstick economy, lipstick economy effect, right? Because people have less money, so they're not spending on large items. but then they left with more, they're not buying real estate, they're not buying houses, they're not spending on large items, but that's why they leave them with some cash to spend small spending, including pay some monthly subscription to pay for the video drama subscription. So this is what I see for the advertising this year.
spk10: Plan Q3 will be released in China's Hong Kong and Taiwan. And the release of the domestic version will be released at the end of this year or at the beginning of next year. In addition, we also have the release of Korean and Japanese mobile games. It has been in the fourth quarter of this year. And our Sea of Liming. In terms of game pipeline, we will release
spk12: new TLBB mobile in the third quarter this year. It has got the license approval in February, and the other one is new Western Journey mobile project. It is applying for the license, and we plan to launch it in the Chinese Hong Kong, Macau, and Taiwan regions in the third quarter this year. And if we can get the license this year, we will release it in Chinese mainland probably before year end or the first quarter next year. For the overseas market, we licensed a game, a Japanese manga game called and we'll release it in Korean, South Korean, and Japan. in fourth quarter this year. And also self-developed game, Sea of Dawn, we plan to launch it in South of Korea and also American and Europe overseas market in the third quarter this year. For overall gaming business this year, our goal is to maintain the stability of our older games and also it depends on the new game performance. Thank you.
spk00: Thank you.
spk11: Thank you for the questions. As a reminder, to ask questions, please press star 11. Next up, we have the lines from Alicia Yup from Citigroup. Please proceed.
spk03: Hi. Good evening, Charles, Johanna, and management team. Thanks for taking my questions. I do have follow up on both the advertising and gaming. So first of all, on advertising, Charles, I think you mentioned during the first quarter, it was recovering moderately. And then you did also explain, you know, some of the big ticket items, small ticket items. But then what about in general, in terms of the overall um ad sentiment uh so for advertisers that are in the industry that is uh still you know kind of lacking uh are they you know also preparing maybe they wanted to spend more or they're actually still cautious on the spending um do you expect a second half you know, some of these big ticket item spending could be improving and hence will be driving the advertising growth. So this is the first question. And then second question on the gaming is the second quarter guidance. So it does look like the guidance was relatively weaker compared to what we have delivered for the first quarter. Is it because there's lack of new games and also the seasonality? And then given we're going to launch the TLBV in third quarter, should we expect a pretty meaningful sequential bounce in the third quarter and then fourth quarter? Thank you.
spk09: All right. So the first section basically answering continue with the previous question. about the advertising I want to draw the attention your attention that actually in Q1 and also the Q2 forecast our advertising in terms of RMB is actually represent a growth of 2% both 2% in Q1 and 2% in Q2 3% in Q2 in growth you know in terms of guidance because of the after is the currency exchange i mean adjustment that's that's what i want to you know point it out i think i think real estate is just basically no hope okay so advertising on real estate is just not at all not possible any growth or and those this is one of the you know big ticket right item and In terms of auto industry, yes, we do see some opportunities. And I hope that in Q3, you'll pick up on advertising recovery. Because competition, especially in the electric car industry, intense competition drives the marketing, especially if we can provide some unique differentiated marketing package unique that can really have their brand exposed across the whole social network industry that represents how much they will spend money on our platform and I have more hope for this small ticket item FMCG and So the good thing about our advertising platform is that any businesses, any products, they need market. They need to have a brand building. They need our platform. So if one industry just went down, there's other industries emerging. And people spending, as I mentioned, the lip, you know, lipstick, in fact, people in some small item area, FMCG, or even some, you know, luxury goods. I mean, yeah, the cosmetics and all those places. And actually, they represent some opportunity. Yeah, because people have the money now. just like now people, you know, as people, you know, during the May holiday, people go to Zibo to have Kaorou, you know, that's the kind of really low cost spending, right? People don't have much, a lot of items to go to the, you know, fancy hotels and, or to have the sports clubs to, you know, health clubs to spend, but people do have some, left with some money to spend on other small item things. And that's the FMCG side that we see some of the opportunity in the later half of the year. So we look at growth. Gaming. Yeah. Yeah.
spk10: The decline of the second quarter guidance is we expect fewer promotions in Q2 than in Q1.
spk12: And some of our other games, including TLBP, will have some natural decline. It is still too far to... the performance in third quarter.
spk02: Okay, thank you.
spk11: Thank you for the questions. Once again, to ask questions, please press star 11. We are glad to have no further questions at this time. Thank you, everyone. That concludes today's conference call. You may now disconnect your lines. you you Thank you. Thank you.
spk06: Bye. you you
spk11: Ladies and gentlemen, thank you for standing by and good evening. Thank you for joining SOHU's first quarter 2023 earnings conference call. At this time, all participants are in the listen-only mode. After management's prepared remarks, there will be a Q&A 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.
spk05: Thank you, Peter. Thank you for joining us to discuss SOHO's Fourth Quarter 2023 Results. On the call are Chairman and Chief Executive Officer Dr. Charles Zhang, CF Adrenaline, and Vice President of Finance, James Dunn. Also with us are China's CEO, Dylan Chen, and CF Yao-Bing Wang. Before measurement begins their prepared remarks, I would like to remind you of the Commerce 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 forward-looking statements. These statements are based on current plans, estimates, and projections. Therefore, you should not place undue reliance on them. Forward-looking statements involve inherent risks and uncertainties. We caution you that a number of important factors could cause actual results different from those contained in any forward-looking statements. For more information about the potential risks and uncertainties, please refer to the committee's findings with the Securities and Exchange Commission, including the most recent annual report on Form 28. With that, I will now turn the call over to Dr. Charles Zhang. Charles, please proceed.
spk09: Thanks, Huangpu, and thank you, everyone, for joining our call. In the first quarter of 2023, we hit the high end of our prior guidance for brand advertising revenue, while our bottom-line performance came in well above expectations despite the impact of seasonality. And social media, we further improved operational efficiency and focused on enhancing user experience through product and algorithm refinements. We closely monitored market trends and provided innovative marketing solutions to our advertisers. At Soho Video, we continue to develop both long-form and short-form original content under our Twin Engine strategy. Leveraging the advantages of our product mix metrics, we were able to consolidate our resources and proactively explore a diverse range of monetization opportunities. Online games remain stable during the quarter with revenues in line with the prior guidance. Now, let me go into detail about each of our businesses. I'll go into each of our business in a moment, but first, a quick overview of the overall financial performance. For the first quarter of 2023, total revenue $162 million, down 16% year over year, up 1% quarter over quarter. Brand advertising revenue, $23 million, down 5% year-over-year and 22% quarter-over-quarter. Online game revenues, $129 million, down 18% year-over-year and up 7% quarter-over-quarter. Gap net loss attributable to Suhu.com Limited was $18 million. compared with a net income of $3 million in the first quarter of 2022, and net loss of $7 million in the fourth quarter of 2022. Non-GAAP net loss attributable to Seoul.com Limited was $13 million, compared with net income of $9 million in the first quarter of last year, and a net loss of $2 million in the fourth quarter of 2022. Now, we'll go through our key businesses in more detail. First, Media Portal and Soho Video. At Soho Media Portal, we harnessed the cutting edge technology to steadily optimize our products and algorithms. As a mainstream media platform, we not only deliver reliable and real-time news and information to our users, but also stimulate high-quality self-media content generation among users and expand our social network distribution. Through this effort, we have continuously improved user experiences and further strengthened our brand influence. At Soho Video, we focus on developing high-quality long-form and short-form content For the long-form content, in the first quarter, we have rolled out Ye Cheng Fu and Sour Plum, Sweet Love, Qing Mei, both of which won acclaim from audiences. In April, we released a crime-themed idol romance, Love of Replica, Wei Ni, Ni Guang Er Lai. the upgraded sequel to 2021's Mysterious Love. So the Love of Replica became a hit show again at the time of its release, actually last week, and further boosted our audience base. For reality shows, we saw the successful release of On Her Way Home special edition for the Spring Festival and The On Her Way Home series has gained widespread attention and generated in-depth discussion of various social issues, helping it reach and penetrate to larger audiences. In terms of short-form content, we continue to focus on the science-related live streaming supported by our advanced live streaming broadcasting technology. With abundant and professional reserve of broadcasters across numerous verticals and the rich offering of high quality content, Soho Video continues to consolidate its reputation as a leading science technology based live broadcasting platform. On the monetization front, the overall market recovered moderately during the quarter. As advertising demand bounced back, we proactively explored various monetization opportunities in differentiated scenarios. For example, during the quarter, we successfully hosted the annual Sohu Fashion Awards, and an offline event which has become a distinctive IP for Sohu and demonstrates our position as a mainstream media platform. the Soho Fashion Award together with the Charles physics class, my teaching physics, and also the talk under the starry sky and the talk on the show of Stone Mountain, the interview program generated significant attention and created various hot topics and discussions on our product metrics as well as across various social media platform. platforms. These unique campaigns leveraging by our dual platform of Sohu Video and Sohu News reinforced our strong brand influence and our good content and at the same time provided our advertisers with ample market exposures. So next, turning to online game business. During the first quarter of 23, Online game revenues were in line with the company's prior guidance. When in our PC games business, we launched some Chinese New Year themed holiday events and promotions for the regular TLBB PC. We continue to improve the functionality of TLBB Vintage based on players' needs and also introduced a new cross-server PVP event that matches players randomly. In our mobile game businesses, we launched updates for Lexi TLBB Mobile to celebrate the Chinese New Year, introducing not only a series of holiday events, but also optimization of clan skills. In the second quarter of 2023, we will launch expansion packs and content updates for TLBB PC, Legacy, TLBB Mobile, and other games to keep players engaged. As technology in the game business industry keeps advancing and market demand becomes deeper and more diversified, we intend to stick with our top game strategy, allocating more resources to professional talent development as well as content and technology innovation in order to roll out more high-quality mobile games. In terms of the games pipeline, while maintaining our core competitiveness in MMORPGs, we also produce games in various types, including car-based RPGs, strategy, sports, and idle games. I'll now turn the call over to our CFO, Joanna, who will walk you through our financial results. Joanna.
spk13: Thank you, Charles. I will now walk you through the key financials of our major segments. For the first quarter of 2023, all the numbers on the non-GAAP basis, you may find the reconciliation of non-GAAP to GAAP measures on our IR website. For SOHO Media Portal, Quarterly revenues were $18 million, compared with revenues $18 million in the same quarter last year. The quarterly operating loss was $35 million, compared with an operating loss of $45 million in the same quarter last year. For SOHO video, quarterly revenues were $13 million, compared with revenues $50 million in the same quarter last year. Quarterly operating loss was $32 million, compared with an operating loss of $21 million in the same quarter last year. For Changyong's online game business and 17173, quarterly revenues $131 million, compared with revenues $160 million in the same quarter last year. Quarterly operating profit was $55 million, compared with an operating profit of $85 million in the same quarter last year. For the second quarter of 2023, we expect brand advertising revenues to be between $23 million and $26 million. This implies an annual decrease of 8% to an annual increase of 4%, and a sequential increase of 2% to 15%. Online game revenues to be between $112 million and $122 million. This implies an annual decrease of 22% to 29% and a sequential decrease of 6% to 13%. Non-GAAP net loss attributable to Soho.com Limited to be between $15 million and $25 million. And GAAP net loss attributable to Soku.com Limited to be between $80 million and $28 million. Our guidance reflects our current and preliminary view, which is subject to substantial uncertainty. This concludes our prepared remarks. Operator, we would now like to open the call to questions.
spk11: Thank you. We will now begin the question and answer session. If you'd like to ask a question, please press star 11 on your telephone. To cancel requests, please press star 11. There will be a short silence while questions are being collected. Thank you for your patience. One moment for the first question. Our first question comes from Thomas Chong of Jefferies. Please proceed.
spk04: Thanks, management, for taking my question. I have two questions. The first one is about advertising industry in 2023 outlook and also advertising spending budget among auto, FMCG, internet service, and property service advertisers. And my second question is about online game outlook and our game pipelines in 2023. Thanks.
spk09: So for 2023 advertising, we see the top three categories, the auto 25%, FMCG 15%, and internet service 15%. We see some opportunities for auto industry probably later in Q2 or Q3 later this year. For Q1... It's because there is a new policy for the July 1st policy for a stricter emission standard. So some car auto companies trying to lower the price and try to get rid of their stockpiles. So there's some advertising on Q1 is kind of soft. There's a negative impact on that. But for the whole year, it seems there is some opportunity. There's more competition in the auto industry, especially for electric car, new energy, fossil electric car industries. And for FMCG, we see some people have less money in spending on large items. larger item spending but for small items seems there's a kind of recovery because Q1 and this year is the first quarter and first year after the 2019 basically you know after the lifting of the you know lock up or the lockdown or the zero COVID policy so everything in Q1 and the Q2 will be very indicative of the a normal economy, the economy should be. It seems it's less, it's bouncing back not as much as we expected, but we do see some, I would say the, you know, the lipstick economy, lipstick economy effect, right? Because people have less money, so they're not spending on large items. But then they left with more, they're not buying real estate, they're not buying houses, they're not spending on large items, but that's why they leave them with some cash to spend small spending, including pay some monthly subscription to pay for the video drama subscription. So this is what I see for the advertising this year.
spk10: Plan Q3 will be released in China's Hong Kong and Taiwan first, and then the release of the domestic version will be released at the end of this year or early next year. In addition, we also have the release of the Korean and Japanese version of the mobile game. It has been in the fourth quarter of this year, and our Sea of Liming In terms of game pipeline, we will release
spk12: new TLBB mobile in the third quarter this year. It has got the license approval in February. And the other one is new Western Journey mobile project. It is applying for the license. And we plan to launch it in the Chinese Hong Kong, Macau, and Taiwan regions in the third quarter this year. And if we can get the license this year, we will release it in Chinese mainland probably before year end or the first quarter next year. For the overseas market, we licensed a game, a Japanese manga game called Paiqiu Shaonian, and we'll release it in Korean, South Korean, and Japan in fourth quarter this year. and also self-developed game, Sea of Dawn. We plan to launch it in South of Korea and also American and Europe overseas market in the third quarter of this year. For overall gaming business this year, our goal is to maintain the stability of our older games, and also it depends on the new game performance. Thank you.
spk00: Thank you.
spk11: Thank you for the questions. As a reminder, to ask questions, please press star 11. Next up, we have the lines from Alicia Yap from Citigroup. Please proceed.
spk03: Hi. Good evening, Charles, Johanna, and management team. Thanks for taking my questions. I do have follow up on both the advertising and gaming. So, first of all, on advertising, Charles, I think you mentioned during the first quarter, it was recovering moderately. And then you did also explain some of the big ticket items, small ticket items. But then what about in general, in terms of the overall at sentiment so for advertisers that are in the industry that is still you know kind of lacking are they you know also preparing maybe they wanted to spend more or they're actually still cautious on the spending do you expect second half you know, some of these big ticket item spending could be improving and hence will be driving the advertising growth. So this is the first question. And then second question on the gaming is the second quarter guidance. So it does look like the guidance was relatively weaker compared to what we have delivered for the first quarter. Is it because there's lack of new games and also the seasonality? And then given we're going to launch the TLBV in third quarter, should we expect a pretty meaningful sequential bounce in the third quarter and then fourth quarter? Thank you.
spk09: All right. So the first section basically answering continue with the previous question. about the advertising I want to draw the attention your attention that actually in Q1 and also the Q2 forecast our advertising in terms of RMB is actually represent a growth of 2% both 2% in Q1 and 2% in Q2 3% in Q2 in growth you know in terms of guidance because of the after is the currency exchange i mean adjustment that's that's what i want to you know point it out um i think uh uh i think real estate is just uh basically no no hope okay so um advertising on real estate just uh not at all not possible uh any any growth or and those this is one of the you know uh big ticket right item and um In terms of auto industry, yes, we do see some opportunities, and I hope that in Q3, you'll pick up on advertising recovery. Because competition, especially in the electric car industry, intense competition drives the marketing, especially if we can provide some unique, differentiated marketing package unique that can really you know have their brand you know exposed across the whole social network of the industry that represents our motility will spend money on our platform and I have more hope for this small ticket item FMCG and So the good thing about our advertising platform is that any businesses, any products, they need market. They need to have a brand building. They need our platform. So if one industry just went down, there's other industries emerging. And people spending, as I mentioned, the lip, you know, lipstick, in fact, people in some small item area, FMCG, or even some, you know, luxury goods. I mean, yeah, the cosmetics and all those places. And actually, they represent some opportunity. Yeah, because people have the money now. just like now people, you know, as people, you know, during the May holiday, people go to Zibo to have Kaorou, you know, that's the kind of really low cost spending, right? People don't have much, a lot of items to go to the, you know, fancy hotels and, or to have the sports clubs to, you know, health clubs to spend, but people do have some, left with the money to spend on other small item things. And that's the FMCG side that we see some of the opportunity in the later half of the year. So we look at growth. Gaming. Yeah. Yeah.
spk10: The decline of the second quarter guidance is we expect fewer promotions in Q2 than in Q1.
spk12: And some of our other games, including TLBP, will have some natural decline. It is still too far to... to forecast the performance in third quarter.
spk02: Okay, thank you.
spk11: Thank you for the questions. Once again, to ask questions, please press star 11.
spk08: We are glad to have no further questions at this time.
spk11: Thank you, everyone. That concludes today's conference call. You may now disconnect your lines.
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