Sohu.com Limited

Ladies and gentlemen, thank you for standing by and good evening. Thank you for joining SOHU's second quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After management's prepared remarks, there will be question and answer session. Today's conference call is being recorded. If you have any objections, you may disconnect at this time. I'd now like to turn the conference over to your host for today's call, Wang Pu, Investor Relations Director of Sohu. Please go ahead.

Thank you, operator. Thank you for joining us to discuss Sohu's second quarter 2023 results. On the call are Chairman and Chief Executive Officer, Dr. Charles Zhang, CFO, John Lewis, and Vice President, James Stone. Also with us are China's CEO, Dylan Chen, and CFO, Wing Wang. Before management begins their prepared remarks, I would like to remind you of the comprehensive upper 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 be prematurely from those containing any forelooking statements. For more information about the potential risks and uncertainties, please refer to the accomplished findings with the Security and Exchange Commission, including the most recent annual report on Form 28. With that, I will now turn the call over to Dr. Zhao Xia. Zhao, please proceed.

Thanks, Huangpu, and thank you, everyone, for being on the call. In the second quarter of 2023, we delivered stable performance with both revenues and the bottom line meeting our expectations. At Soho Media, we enhanced the user experience through continuous refinements to our products and technology and by offering users a steady stream of reliable content in real time. At Soho Video, With consistent execution of our Twin Engine strategy, we expanded our portfolio of long and short-form video content and proactively improved their social distribution. Leveraging our advanced live broadcasting technology and Sohu product matrix, we hosted traditional flagship events and innovative content marketing campaigns. which generated abundant premium content and attracted more users. And this also put us in a position to explore more monetization opportunities and again, advertising dollars. Online games remain steady, generating revenues in line with our prior guidance. Now let me first give a quick overview of the financial performance. For the second quarter of 2023, total revenues, $152 million, down 22% year-over-year and 6% quarter-over-quarter. Brand advertising revenues, $24 million, down 4% year-over-year and up 6% quarter-over-quarter. Online game revenues, $118 million, down 25% year-over-year and 9% quarter-over-quarter. Gap net loss attributable to Soho.com Limited was $21 million compared with a net income of $9 million in the second quarter of last year and net loss of $18 million in the first quarter of 2023. Non-gap net loss attributable to Soho.com Limited was $18 million compared with a net income of $12 million in the second quarter of last year and the net loss of $30 million in the first quarter of this year. Now I'll go through our key businesses in more detail. First, Media Portal and Soho Video. At Soho Media Portal, we continue to focus on refining our product and optimizing the algorithms. We further enhance the user experience by integrating cutting-edge technology into our products and expanding premium content and the various forms of presentation. Thanks to our continuous dedication and integration of rich media resources, we've strengthened our advantage and influence as a mainstream media platform. At Soho Video, we continue to execute our Twin Engine strategy For the long-form video content, we released the crime-themed idol romance Love of Replica during the quarter to widespread popularity and further expanded our audience base. At the same time, we launched several reality shows like This Is Me , which is the sixth season of On Her Way Home, and High Summer Friends, 属于我们的夏天二, 穿西徒步。 These shows have created a lot of engaging discussions online and attracted millions of viewers across various social media platforms. In terms of short-form content and live streaming, we kept concentrating on knowledge and science-related live broadcasters. driven by our distinctive IP of myself, Charles' physics class, which is becoming very popular. And we further promoted high quality content generation and its social distribution, attracting more users to produce video content and interact with each other on our platform. On the monetization side, we closely monitored market trends, and explored potential opportunities, leveraging our advanced live broadcasting technology and the dual platform of Soho Media and Soho Video. We provided advertisers with unique and diversified online and offline marketing strategies that cater to their needs and boosted our advertising dollars. In the second quarter of this year, we hosted the traditional content marketing event, the 15th Sohu News Marathon in Xi'an, demonstrating the reinvigoration and popularity of traditional Chinese culture, as well as Sohu's positive and upward social values. We also proactively developed new monetization opportunities by integrating innovative ideas into diversified events and expanded application scenarios using our advanced live broadcasting technology. We integrated the Charles Physics class into Soho Tech Conference and further extended this IP into a new series of activities called Talk Under the Stair Sky. These events have generated an abundance of premium content and obtained recognition from advertisers. Next, turning to the online game business. During the second quarter of 2023, Online game revenues were in line with our prior guidance. When in our PC game business, we optimized the character development system of regular TLBB PC to make players' investments more worthwhile and also improved the social relations system for TLBB Vantage. In our mobile game business, we launched an expansion pack for the anniversary of Legacy TLBB Mobile with the addition of the limited time player versus player event to satisfy demand for additional in-game combat. Next quarter, we will launch new TLBB Mobile, our next generation TLBB product, along with the expansion packs and content updates, along with expansion packs and content updates for other games to maintain player engagement. Nowadays, as technology in the game industry advances rapidly and market demand becomes deeper and more diversified, we intend to stick to our top games strategy, allocating more resources for research and development to generate ideas, professional talent development, as well as content and technology innovation in order to roll out our more high-quality mobile games. In terms of games pipeline, we will maintain our core competitiveness in the MMORPGs while also producing various other game types, including card-based RPGs, sports, and casual games. Now I'll turn over the call to our CFO, Joanna, who will work you through our financials.