Sohu.com Limited

Ladies and gentlemen, thank you for standing by and good evening. Thank you for joining SOHU's third quarter 2023 earnings conference call. At this time all participants are in a listen only mode. After management's prepared marks 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.

Thanks, operator. Thank you for joining us to discuss SOHU's third quarter 2023 results. On the call are Chairman and Chief Executive Officer, Dr. Charles Zhang, CFO Joanna Liu, and Vice President of Finance, James Dunn. Also with us are Chang, UCCO Dylan Chen, and CFO Yubing Wang. Before measurements begin their prepared remarks, I would like to remind you of the comments we have on statements 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 containing any forward-looking statements. For more information about the potential risks and uncertainties, please refer to the complex findings with the Securities and Exchange Commission, including the most recent annual report on Form 20-F. With that, I will now turn the call over to Dr. Charles Zhang. Charles, please proceed.

Thanks, Huangpu, and thank you, everyone, for joining our call. In the third quarter of 2023, we continue to improve our product offering and enhance operational efficiency. Thanks to these efforts, we delivered both top and bottom line performance in line with our prior expectations. As Zoho Media Portal, we further refined our products and upgraded the user experience. At Soho Video, with our Tin Engine strategy, we focused on the generation and distribution of compelling short-form content as well as live broadcasts. These efforts helped us further boost user engagement and social interactions. At the same time, benefiting from our unique content marketing campaigns, we continue to explore a diverse range of monetization opportunities that leverage our differentiated competitive advantages. For online games, with consistent release of new content updates and operational efforts, game revenues remain stable. Before I go into more detail of our key financial results, please be reminded that the bankruptcy proceedings for Changyou's cinema advertising business concluded during the quarter. This release is related to continuing operations only, so this includes the disposal gain from the Chinese cinema advertising business. So for the third quarter of 2023, the total revenues were $145 million, down 22% year-over-year and 4% quarter-over-quarter. Brand advertising revenues, $22 million, down 14% year-over-year and 8% quarter-over-quarter. Online game revenues were $117 million, down 21% year-over-year and 1% quarter-over-quarter. Gap net loss attributable to Sohu.com Limited was $14 million compared with a net loss of $22 million in the third quarter of 2022 and a net loss of $21 million in the second quarter of 2023. Non-gap net loss attributable to Sohu.com Limited was $10 million compared with a net loss of $17 million in the third quarter of 2022 and a net loss of $18 million in the second quarter of this year. So now let me go through our key businesses in more detail. First, Media Portal and Soho Video. At Soho Media Portal, we continue to upgrade our products and strengthen operational efficiency. We actively promoted the generation and social distribution of high-quality content through enhanced engagement and interaction. We also integrated cutting-edge technologies in our products, resulting in a better user experience for both audiences and content providers. At Soho Video, our focus remains on executing the chain engine strategy. We further diversified our long-form content library and continuously promoted our unique live streamings and short-form content. We're committed to establishing a leading position in the field of knowledge and science-related live broadcasting, leveraging our distinctive IP, the Charles Physics class. And this IP has formed a multidimensional dissemination through live broadcasting, short videos, offline seminars, books, and other means, which has driven considerable traffic and engagement on various topics across our platforms. In addition, as a video social platform, we were also proactively attracting broadcasters and users across various fields by refining our broadcaster ecosystem and organizing events centered on hot topics, such as the 2023 Sohu K-pop Dancing Festival and 2023 Sohu Broadcasters Conference. So basically a user conference. These live broadcasting events enabled users to interact with each other online and offline and further enhanced their vitality and engagement on the Sohu video platform. On the monetization side, despite the advertising budgets remained cautious, we closely followed the market trends and were developing synergies between Soho's product matrix and our advanced live broadcasting technology. These efforts enabled us to execute unique high-value marketing campaigns and unlock new monetization opportunities. During the quarter, We hosted traditional and innovative events, such as Talk Under the Starry Sky and the Boss One Plus One high-end dialogue. These events have been disseminated across the various social media platforms, not only demonstrating our influence as a mainstream media platform, but also effectively attracting millions of audiences and generating significant exposure for advertisers. Now turning to the online game business, game revenues remained stable during the quarter, driven by consistent release of new content updates and robust game operations. Within our PC games business, we rolled out promotional events for regular TLBB PC and further optimized its character development system. With TLBB Vintage, we launched a month-long event during the Qixi Festival, which helped stabilize player engagement. The Chinese Valentine's Day. In our mobile game business, we introduced a new strategic plan or gameplay mode for legacy TLBB Mobile. Next quarter, we'll launch expansion packs and the content updates for the TLBB series and other titles to keep players engaged. We'll stick to our top game strategy going forward as gaming technology advances rapidly and the market demand becomes deeper and more diversified. We will explore new ideas to better meet the players' needs, allocate more resources, to professional talent development and invest in content and technology innovation in order to bring more high-quality games to the market. In terms of games pipelines, we will maintain our core competitiveness in MMORPGs while also producing card-based RPGs or sports and casual strategy games. Before I pass the call to Joanna to go through our financial results in detail, we are pleased to announce that on November 11, 2023, two days ago, our board of directors authorized a share repurchase program of up to $80 million over a two-year period. The repurchase program and the scores the continued confidence we have in our long-term growth prospects, as well as our ongoing commitment to increasing shareholder value. So with that, I will now turn the call over to Joanna, please.