Sohu.com Limited Price & Performance (SOHU)

Including the most recent annual report on Form 20 F. With that, I will now turn the call over to Doctor. Charles Joss.

Charles, please proceed. Thanks, Huangpu, and thank you everyone for joining our call. In the fourth quarter of twenty twenty four, our brand advertising revenues hit the high end of our previous guidance while both our online game revenues and the bottom line performance was much better than expected. Social media platform, including social media and video, we continue to refine our products optimized algorithms and strictly controlled budgets. By integrating the advantages of the Sohu product metrics with our unique IPs and high energy bands, we were able to promote the generation and social distribution of premier [indiscernible] Effectively, enhance user experience to attract more users and further unlock monetization potential. The Alaa Games business delivered solid performance thanks to the relentless efforts to produce high quality new games and revitalize legacy games Before going through each business unit in more detail, me first give you a quick overview of our financial performance. For the fourth quarter of twenty twenty four, total revenues $135,000,000 down 5% year over year and 11% quarter over quarter. Brand advertising revenues $19,000,000 down 7% year over year and 1% quarter over quarter. Online game revenues $110,000,000 down 4% year over year and 14% quarter over quarter.

GAAP net loss that $21,000,000 compared with a net loss of 13,000,000 in the fourth quarter of twenty twenty three a net loss of $16,000,000 in the third quarter of twenty twenty. Non GAAP loss attributable to Sohu.comLimited $50,000,000 compared with a net loss of $11,000,000 in the fourth quarter of twenty twenty three and a net loss of $12,000,000 in the third quarter of twenty twenty four. For the whole year of 2024, total revenues $598,000,000 flat compared with 2023. [indiscernible] $73,000,000 down 17% compared with 2023. Online game revenues $5.00 $2,000,000 up 5% compared with 2023.

GAAP net loss attributable to Sohu.com Limited $100,000,000 compared with a net loss of $66,000,000 in 2023.

Non GAAP net loss attributable to Sohu.com Limited was $83,000,000 compared with a net loss of $51,000,000 in 2023. Now let me go through our key businesses in more detail. First, the Sohu Media platform. We consistently focused on improving our technology and optimizing our products With cutting edge technology, Meanwhile, we also kept improving user experience by closely monitoring Their needs We organically integrated our diverse online and offline events maximizing the synergy of the Sohu product metrics [indiscernible] is thriving online community These efforts allowed us to attract more users especially the younger generation, to our platform. Actively promoted their interactions and stimulated more content generations. So in 2024, 2024, we held a series of key pop dancing tour competitions in several major cities in China. From which the most outstanding contestants were selected to join the twenty twenty four Dream Concert overseas in South Korea in October.

Later in December, at the final show of the above series of dancing events, the twenty twenty four Sohu Video Dancing Festival, was hosted with great success. This dancing festival brought together a lot of top dancers in U. S. Q2 has become the most eye catching annual event the field of K pop dancing for the year. Also during the last quarter, during this quarter, we hosted a twenty twenty four Sohu Video GuoFeng the largest nationwide competition showcasing the traditional Chinese Hanfu costume It received widespread acclaim and sparked extensive discussions and dissemination across multiple social media platforms, These events not only strongly strengthened our leading position and influence in the K pop and Hang Free event verticals but also stimulated numerous social interactions and distributions on our platform. We also continued to host our flagship events such as the twenty twenty four Sohu Fashion Awards and at the end of the year end twenty twenty four Sohu Finance Annual Forum, Sohu Tianyu and Mulan, which further consolidated our brand influence as a mainstream media platform and provided us with abundant premium content. These events were not only attractive for users, but also enabled us to provide unique marketing solutions to our advertisers.

As Lucido, we further participated in broadcasting the trial Physics class Uliko, which has been going on for three years with three books published and also the YYI Ke EnglishClass These classes have jointly become the leading IPs for Sohu. Leveraging these unique IPs and the collaborations with science related drug [indiscernible] popularized cutting edge professional knowledge to them and reinforce our core competitiveness in the field of knowledge and science related live streaming Benefiting from the above, we are able to combine the knowledge, design dissemination and brand marketing brand marketing through diverse channels delivering unique experiences to advertisers and audiences. And driving [indiscernible] In 2024, we continuously enriched our content library by acquiring TV dramas, rolling out original dramas, [indiscernible] American TV series as well as introducing short dramas. For example, our TV drama and the American TV series [indiscernible] And also the HBO series were well received by the audience. Yes. We're talking about social media platform. We include both the social news and social video. Now next, let me turn to the online game business. During the quarter, our online game business performed well with revenues exceeding our prior guidance. In our PPA games business, launched new plan jointly for regular tier TLBB PC and TLBB Vantage Along with the various snow and ice themed ice themed events and its gameplay, effectively boosting players' enthusiasm for the game.

In addition, we introduced an innovative survival PVP gameplay for regular TLDB PC and refreshed some classic game plays of TLBB Vintage enhance player experience and renew their interest in the game. For Legacy TLBB Mobile, we launched a new expansion pack featuring crossover content such as themed Dungeons office, and rich innovative gameplay Next quarter, we'll continue to launch expansion packs and the content updates for the TLBB series and other titles to further keep players engaged. As market competition intensified, and user demand for quality and innovative innovation continues to rise we'll forge ahead with our top game strategy staying true to our user centric philosophy We'll continue to optimize our research and development process, and enhance the execution to improve efficiency and product success rate.

Meanwhile, we will intensify our efforts to expand our international presence While maintaining our core competitiveness on MMO RPGs, we'll also actively expand our portfolio with diverse types of games including card based RPGs, sports games and casual games, etcetera. With these efforts, we are confident that we soon can bring more quality games to the market. Now I would like to give an update on the ongoing share repurchase program. As of February thirteen this year, 2025, Sohu had repurchased 4,200,000.0 ADS, for an aggregated cost of approximately $52,000,000 So with that, I'll turn to the call to our CFO, Joiner. Joiner?

Thank you, Charles. I will walk you through the key financials of our business segment For the fourth quarter and full year of 2024, all the numbers on a non GAAP basis You may find a reconciliation of non GAAP to GAAP measures. On our IR website. [indiscernible] quarterly revenues were $24,000,000 compared with $25,000,000 in the same quarter last year quarterly operating loss was $69,000,000 compared with operating loss of $68,000,000 in the same quarter last year For the full year 2024, revenues were $91,000,000 compared with $140,000,000 in 2023. The full year operating loss was $287,000,000 compared with operating loss $269,000,000 in 2023. For Changyou's online game business and 17,173, quarterly revenues $187,000,000 compared with $150,000,000 in the same quarter last year.

Quarterly operating profit was $48,000,000 compared with operating profit of $47,000,000 in the same quarter last year the full year 2024, revenues were $5.00 $6,000,000 compared with revenues of $485,000,000 in 2023. The full year operating profit, dollars 196,000,000, compared with an operating profit of $2.00 $3,000,000 in 2023. For the first quarter of twenty twenty five, we expect brand advertising revenue be between $30,000,000 and $40,000,000 This implies annual decrease of 13% to 19% and a sequential decrease of 26% to 31%. Online game revenue to be between $105,000,000 and $150,000,000 This implies annual decrease of 2% to 11% and a sequential decrease of 4% to a sequential increase of 5%. Non GAAP net loss attributable to Sohu.com Limited to be between $16,000,000,000,000 and $26,000,000 and GAAP net loss attributable to Sohu.com Limited So we became $20,000,000 and $30,000,000 This forecast reflects Sogou's management's 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.

Thank you. We will now begin the question and answer session. First question comes from the line of Thomas Chong from Jefferies. Please go ahead.

Hi, good evening. Thanks management for taking my questions. My question my first question is about the brand advertising It seems that for the Q1 guidance, the sequential decline is a bit soft versus previous years.

And the year on year decline is a bit also more than Q4. So I just want to get some color with regard to any reason behind the [indiscernible] And on the ClinLion business, management comments about how we should think about when we should expect it to [indiscernible] because it seems the range is a bit wide. And how is the trend so far And then my last question is about the invitation of CCP the management comments about how we should think about the integration with Sohu. Thank you.

So your first question is about the ada planning, right?

The second question is about [indiscernible] Okay. The first one, I'll answer your question.

For Q1, right, decline, right? Because of the macroeconomic situation?

People are spending less advertisers are spending less in marketing because of the overall economy economic situation. And so [indiscernible] overall economy. [indiscernible] the second question is about the Game, right?

The performance of the first quarter is expected to be flat quarter over quarter.

Okay. So, I'll be DeepShigm application, we've been actually in the last two years, we've been applying the language model to our social or media and social network products. [indiscernible] For example, the organized of the content, the better the generation of content and especially knowledge based content and the text based abstract, writing and internal editing with the with the apply of AI technologies really increased the efficiency and the future, we're going to also to for example, in our live streaming Our AI technology can help us to summarize different basically to summarize the video content into text form.

And to automatically to to mark the different sections of the streaming video content And in terms of social network, people, people infraction, will be our product in the future will have for the AI aided interaction or and also is voice to text and also sometimes in the future probably help with a deep or deep seek or in large model language model to to to help users to generate content with the voice and word text to to turn them into some pictures and videos and to have really generated some quality in a really ease the production process and make it really very Actually, some of the content would not be able to produce, but now we to do it. So there is a wide range of application of AI technology and deep We haven't yet, but we're looking at that possibility. So basically help us with our media and social network user experience and content generation, content organization and editing and Yes.

And also, I think it's also we are gaining, right, also applied language model, right? The AI technology, right? [indiscernible] The AI technology application in terms of gaming development is mainly in the area of video production. And second and the two dimension Art design.

Okay. I hope we answered your question, Thomas.

Got it. Thank you, Charles.

Thank you for the questions. One moment for the next question. The next question comes from Alicia Yap from Citi. Please go ahead.

Hello. Good afternoon. Good evening. Charles and management. Thanks for taking my questions. I have a few follow-up. Number one, can management maybe comment a little bit on the overall macro sentiment as related to the advertising budget sentiment. Just curious, given there's a lot of hype and talks about the technology breakthrough from China. So not sure will some of these positive sentiment positive technology sentiment, will that have you seen any of these actually translate to slightly better advertiser budget spend on certain category. And also, have you seen any change of the consumer behavior in terms of the consumption as related to some of these positive development? So that's the first question.

And then second question is, can you remind us with your $52,000,000 buyback amount, what's the outstanding amount on the buyback currently? Thank you.

Well, the buyback we bought 4,200,000,000.0 yen 4,200,000,000.0 yen right? [indiscernible] So we spend one third of the $150,000,000 right, RMB52 million.

Already, so there's another R100 million to go.

Right, approved by the Board. So that's 4,200,000.0 ADS, okay?

In terms of as to the macro macroeconomic situation, I think it's just consumption. Just people have less money to consume, [indiscernible] Companies or product companies that [indiscernible] the most of our auto companies they are advertising budget I can see in the year 2024, I can see a trend of like almost like cut by half. A lot of companies just they want to spend RMB6 million, now they spend RMB3 million. So instead, So it seems that because the consumption is weak, that's why market companies are spending less money in marketing. That's why we can't feel that, right? As a advertising promote marketing platform, we can feel the decline, right? So as to deep seek I mean, not only deep seek, but overall AI technology bring have has brought quite an enthusiasm, right, and excitement. But I don't think it can translate into any any immediate benefit of marketing or companies because it's really the problem is really people are spending less. People have less money because people bought houses and then they have much less money left to spend, right? So, it's actually to pay the mortgage that's why companies don't have them. And if there is a the product and sales volume drops, I think.

And I don't think AI technology can help that in the short run. And sometimes the AI technology actually destroy drops, right, not creating drops. That's what I can see. [indiscernible] I see. I see. So maybe can I follow-up a little bit Charles? So any other kind of sub sector that is holding in terms of the ad budget? For example, let's say, the FMCG or even have you seen, let's say, electronics like the cell phone given the trade in and all that, have you seen any increase in terms of the ad on any of the categories.

Yes. I think I meant FMCG become has risen to the top sector among our advertisers, I mean, the sectors Previously, before I remember, automotive was always number one, right, number one sector, but now FMSC is number one. And Autohome and IT services are becoming number three and number four. Yes, people are actually spending more On some smaller [indiscernible] like food, alcohol liquor and electronics So [indiscernible] the treating policy also stimulated that. To some extent.

I see. Okay. Very helpful. Thank you. Thanks Charles. Thanks management.

Thank you for the questions. With that, we now conclude the conference for today. Thank you for your participation. You may now disconnect your line.