- Total Revenues: $172 million, up 13% year over year and 24% quarter over quarter.
- Brand Advertising Revenues: $20 million, down 17% year over year and up 24% quarter over quarter.
- Online Game Revenues: $147 million, up 24% year over year and 25% quarter over quarter.
- GAAP Net Loss: $38 million, compared with a net loss of $21 million in the second quarter of last year and a net loss of $25 million in the last quarter.
- Non-GAAP Net Loss: $34 million, compared with a net loss of $18 million in the second quarter of last year and a net loss of $22 million in the first quarter of this year.
- Sohu Media and Sohu Video Revenues: $24 million, compared with $32 million in the same quarter last year.
- Sohu Media and Sohu Video Operating Loss: $72 million, compared with an operating loss of $67 million in the same quarter last year.
- Changyou's Online Game Business Revenues: $148 million, compared with $120 million in the same quarter last year.
- Changyou's Online Game Business Operating Profit: $32 million, compared with $49 million in the same quarter last year.
- Share Repurchase Program: 2.3 million ADS repurchased for an aggregate cost of approximately $26 million as of August 1, 2024.
- Q3 2024 Brand Advertising Revenue Guidance: $70 million to $90 million, implying an annual decrease of 14% to 23% and a sequential decrease of 4% to 14%.
- Q3 2024 Online Game Revenue Guidance: $104 million to $114 million, implying an annual decrease of 3% to 11% and a sequential decrease of 22% to 29%.
- Q3 2024 Non-GAAP Net Loss Guidance: $30 million to $40 million.
- Q3 2024 GAAP Net Loss Guidance: $34 million to $44 million.
Release Date: August 05, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sohu.com Ltd (SOHU, Financial) hit the high end of prior guidance in brand advertising revenues.
- Online game revenues exceeded expectations, showing strong performance.
- Total revenues for Q2 2024 were $172 million, up 13% year over year and 24% quarter over quarter.
- Innovative marketing campaigns and events have strengthened brand influence and monetization opportunities.
- Sohu.com Ltd (SOHU) has repurchased 2.3 million ADS for approximately $26 million, indicating a commitment to shareholder value.
Negative Points
- GAAP net loss attributable to Sohu.com Ltd (SOHU) was $38 million, compared to a net loss of $21 million in the same quarter last year.
- Non-GAAP net loss attributable to Sohu.com Ltd (SOHU) was $34 million, compared to a net loss of $18 million in the same quarter last year.
- Brand advertising revenues were down 17% year over year.
- The overall macroeconomic situation is challenging, with advertisers remaining cautious in their spending.
- Guidance for Q3 2024 indicates a potential sequential decline in both brand advertising and online game revenues.
Q & A Highlights
Highlights of Sohu.com Ltd (SOHU) Q2 2024 Earnings Call
Q: Can management comment on how the macroeconomic environment is affecting the advertising market, given the expected sequential decline in brand advertising revenues?
A: Charles Zhang, Chairman and CEO: The overall macroeconomic situation is challenging, with advertisers being cautious in their spending. Despite this, innovative marketing campaigns have helped achieve a 24% quarter-to-quarter increase in advertising revenues. The auto industry, in particular, has shown increased spending, accounting for 25% of overall advertising in Q2.
Q: What is driving the expected sequential decline in the gaming business revenues for Q3 2024?
A: Dewen Chen, CEO of Changyou: The decline is mainly due to the performance of "Westward Journey," which accounts for about half of the decrease. The natural decline of other older games accounts for the other half.
Q: Will "Westward Journey" have a chance to rebound in the later quarters?
A: Dewen Chen, CEO of Changyou: There is a possibility for "Westward Journey" to rebound. Recent agreements with the third-party developer to focus on user experience and effective measures based on user research could help the game recover.
Q: Can you elaborate on the sales and marketing expenses and any plans to narrow the operating loss in the coming quarters?
A: Joanna Lv, CFO: The gross margin for online games will recover in Q3 as marketing expenditures and revenue-sharing payments decrease. Charles Zhang, Chairman and CEO: For the overall business, a lot depends on the gaming segment. Investments will continue in building products and acquiring new users to eventually turn the Media segment profitable.
Q: Given the $150 million share repurchase program, how should we think about share repurchases in the second half of the year?
A: Charles Zhang, Chairman and CEO: We have spent $26 million so far and will maintain the same pace in Q3 due to volume limitations. The buyback is the main shareholder return policy currently in place.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
