Sohu.com Limited

Ladies and gentlemen, thank you for standing by and good evening. Thank you for joining SOHO's third quarter 2024 earnings conference call. At this time, all participants are in the 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'd 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 2024 results. On the call are Chairman and Chief Executive Officer Dr. Charles Zhang, CFO John Liu, and Vice President of Finance James Dunn. Also with us are Chang Youze, CEO Duan Wenchuan, and CFO Bing Wang. Before management begins their prepared remarks, I would like to remind you of the Comprehensive Hubbard Statement in connection with today's conference call. Except for the historical information contained herein, the matters discussed on this call may contain forwarding statements. These statements are based on current plans, estimates, and projections, and therefore, you should not place undue reliance on them. Forwarding statements involve interior risks and uncertainties. We caution you that a number of important factors will cause actual results to differ materially from those contained in the NFO Leading Statement. For more information about the potential risks and uncertainties, please refer to the company's filings 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, Peng Pu, and thank you everyone for joining our call. In the third quarter of 2014, our brand advertising revenue met the high end of our previous guidance, while both our online game revenues and our bottom line performance exceeded expectations. For Sohu Media and Sohu Video, in addition to continued product refinements and user experience improvements, We continued to integrate resources and host various unique events and marketing campaigns. With these efforts, we were able to effectively stimulate social interactions among users, strengthen our brand influence, and secure more monetization opportunities. As a result of high-quality content updates and robust game operations, online game business delivered better than expected performance. Before going through each business unit in more detail, let me first give you a quick overview of our financial performance. For the third quarter of 2024, total revenues $152 million, up 5% year-over-year and down 12% quarter-over-quarter. Grand Edified Revenues $19 million, down 15% year-over-year and 6% quarter-over-quarter. Online game revenues, $128 million, up 9% year-over-year and down 13% quarter-over-quarter. Gap net loss attributable to Sohu.com Limited was $16 million, compared with a net loss of $14 million in the third quarter of last year and a net loss of $38 million in the second quarter of this year. Non-gap net loss attributable to Sohu.com Limited was $12 million compared with a net loss of $10 million in the third quarter last year and a net loss of $34 million last quarter, in the second quarter of 2024. Now I'll go through our key businesses in more detail. First, social media and social video. During this quarter, we kept promoting the social distribution features, Connections between users and their increasing needs further consolidated our brand influence. We carry out unique and influential events covering various verticals. In September, we successfully hosted the 2024 Autumn Convention of Sohu Video Influencers. where users, broadcasters, and pop stars met in person to share their thoughts and build their social network through our platform. This event greatly enhanced the recognition of the Soho Video platform among broadcasters and users, and significantly improved user engagement and interaction. We also proactively hosted diversified events based on our influential online interest clubs and groups in different areas. In October, we initiated a groundbreaking overseas collaboration with the event 2024 Dream Concert in South Korea, where we gathered 100 superb top hip-hop contestants who stood out after six months of intense competition nationwide. And we led the team to provide them a chance to go to South Korea to dance together with their idols, the world's well-known idols. This event attracted lots of K-pop fans and generated hot discussions across various social media platforms. So the video has become a leading platform for K-pop dance enthusiasts. in china drawing a large number of fans and providing them with the stage to realize their game their dreams moreover we consistently reinforce our leading position in knowledge and science related live streaming our highly regarded uh physics class my you know my child's physics class which has just celebrated third year anniversary and published published third physics book has formed a dynamic multi-dimensional dissemination through various forms. Together with the Charles Physics class, we also have the Charles English class and other native relative live contents that further strengthen our core competitiveness in this field. We continuously innovated our content offerings and combined it to customize brand marketing solutions for advertisers. These helped us Gain recognition from large number of high-value audiences and advertisers provided us with innovative monetization opportunities. Now, let me turn to the online game business. During the third quarter of 2024, Changyou's online game revenues exceeded our prior guidance, as TLBB PC performed better than expected, and our PC game revenues increased on a sequential basis. Meanwhile, due to the natural decline of the New Westworld Journey, which was launched during the second quarter, mobile games grew a new decrease on a sequential basis. We launched a series of crossover events around the Chinese Valentine's Festival, Qixi Festival, for both regular TLBB PC and TLBB Vintage, featuring theme outfits maps, and gameplay plays, which were well received by players. Besides, we also revamped the skill sets of a major clan of regular TLBB PC, which effectively threw back former players to the game. For Legacy TLBB Mobile, we upgraded the skill sets of a clan based on players' feedback and introduced the corresponding new storyline and activities. which players were happy with. Next quarter, we will continue to launch expansion packs and content updates for the TLBB series. New Westworld Journey and other titles to keep players engaged. As market competition intensifies, user demand becomes more diversified. We will forge ahead with our top game strategy and remain committed to a user-centric philosophy. We will continuously optimize the R&D process, enhance execution, and expand our international presence. By doing so, we are confident that we can bring more high-quality games to the market. in terms of the game's pipeline to maintain our core competitiveness on MMORPGs going forward, while also exploring possibilities in multiple types of games, including card-based RPGs, sports games, and casual games, et cetera. Now I'd like to give an update on the ongoing share purchase program. SOHU today announced that its board of directors has authorized to extend the period of the program for an additional one year to November 10, 2026. Previously, it was a two-year program of 2025. As of November 7, 2024, this year, SOHU has had repurchased 3.4 million ADS for an aggregate cost of approximately $42 million. So the total buyback program is $150 million. It's about one-third less than one-third of the total. So that's why we need three years, right? With that, I'll now turn the call over to Joanna. Joanna?