Q3 2024 Sohu.com Ltd Earnings Call

In This Article:

Participants

Huang Pu; Investor Relations; Sohu.com Ltd

Charles Zhang; Chairman of the Board, Chief Executive Officer; Sohu.com Ltd

Joanna Lv; Chief Financial Officer; Sohu.com Ltd

Alicia Yap; Analyst; Citigroup Global Markets Asia Limited

Thomas Chong; Analyst; Jefferies Hong Kong Limited

Presentation

Operator

Ladies and gentlemen, thank you for standing by and good evening. Thank you for joining Sohu's Third Quarter 2024 Earnings Conference Call. (Operator Instructions)
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.

Huang Pu

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 Joanna Lv; and the Vice President of Finance, James Deng. Also with that, our Changyou CEO Dewen Chen and the CFO Yaobin 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 here, in the matters discussed on this call may contain forward-looking statements. These statements are based on current plans as made in the 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 of differ materially from those contained in any forward-looking statements. 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.

Charles Zhang

Thanks, Huang Pu, and thank you, everyone, for joining our call. In the third quarter of 2024, our brand advertising revenue was at 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 -- for game, 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. Brand advertising 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.
GAAP 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-GAAP 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, second quarter of 2024.
Now I'll go through our key businesses in more detail. First, Sohu Media and Sohu Video. During this quarter, we kept promoting the social distribution features, built up connections between users and meet their increasing needs, further consolidated our brand influence to carry out unique and influential events covering various verticals.
In September, we successfully hosted the 2024 Autumn Convention of Sohu Video influencers, (spoken in foreign language), where users, broadcasters, and pop stars met in person to share their stock and build their social network through our platform. This event greatly enhanced the recognition of the Sohu 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, initiated a groundbreaking overseas collaboration with the event 2024 [beam] concert in South Korea, where we gathered 100 superb top K-pop contestants who stood out after six months of enhanced 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 platform. Sohu Video has become a leading platform for K-pop fans in (spoken in foreign language) in China, joining 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 physics class, my Charles' Physics Class, which has just celebrated third year anniversary and published third physics book, has formed a dynamic national -- multi-international dissemination through various forms. Together with Charles Physics Class, we also have Charles' English Class and the other native relative live content that further strengthen our core competitiveness in this field.
We continue to innovate our content offerings and combine it to customized brand marketing solutions for advertisers. This helped us gain recognition from a large number of high-value audiences and advertisers, providing 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 Westward Journey, which was launched during the second quarter, mobile games revenue decreased on a sequential basis. We launched a series of crossover events around the around the Chinese Valentine's Festival, Qixi Festival for both regular TLBB PC and TLBB Vintage, featuring sim office maps and game players' place, which were well received by players. Besides, we also revamped the skill sets of a major client of regular TLBB PC, which effectively bought back former players to the game.
For Legacy TLBB Mobile, we upgraded the skill set of a plan based on clear feedback and introduced a 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 Westward Journey and other titles to keep players -- to update for the TLBB series, the New Westward Journey, and other titles to keep players engaged.
As market competition intensified, user demand becomes more diversified. We look forward to have with our top game strategy and remain committed to the user-centric philosophy. We'll continuously to 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 pipeline, we will maintain our core competitiveness on MMORPGs going forward, which are also -- 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 -- the share purchase program. Sohu today announced that its Board of -- our 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. So as of November 7, 2024, this year, Sohu has had purchased -- repurchased 3.4 million ADS for an aggregate cost of approximately $42 million. So the total buyback program is $150 million. So it's about less than one-third of the program. So that's why we need three years, right?
With that, I'll now turn the call over to Joanna. Joanna?

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