Ladies and gentlemen, thank you for standing by, for joining Sohu's second quarter 2022 earnings conference call. Good evening. At this time, all participants are in a listen-only mode. After management 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 would now like to turn the conference over to your host for today's conference call, Pu Huang, Investor Relations Director of Sohu. Please go ahead. Thanks operator. Thank you for joining us to discuss Sohu's second quarter 2022 results. On the call are Chairman and Chief Executive Officer, Dr. Charles Zhang, CFO Joanna Lv, and Vice President of Finance, James Deng. Also with us are Changyou CEO, Dewen Chen, and 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 herein, the matters discussed on this call may contain forward-looking statements. These statements are based on current plans, estimates and 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 to 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. Thanks, Huang, and thank you everyone for joining our call. In the second quarter of 2022, COVID-19 and related prevention measures disrupted normal economic activity nationwide. We met the challenge proactively by refining our products and technology, and exploring a range of monetization opportunities. Our brand advertising revenue met the high end of our previous guidance during the quarter. Thanks to the solid performance of our online game business, the group's profitability exceeded guidance. For Sohu Media Portal and Sohu Video, we continued to generate and distribute reliable news and premium content, reinforcing our competitiveness and credibility as a mainstream media platform. Leveraging the differentiated advantages of the Sohu product matrix, we extended our live broadcasting to a greater number of scientific fields and to various online and offline events. For online games, our performance was stable during the quarter, with revenues in line with our guidance. I'll go into details about each of these businesses in a moment, but first, let me have a quick overview of the financial performance. For the second quarter of 2022, total revenues $195 million, down 5% year-over-year and up 1% quarter-over-quarter. Brand advertising revenues $25 million, down 32% year-over-year and up 5% quarter-over-quarter. Online game revenues $157 million, up 4% year-over-year and flat quarter-over-quarter. GAAP net income attributable to Sohu.com Limited was $9 million, compared with $22 million in the second quarter of 2021 and $3 million in the first quarter of 2022. Non-GAAP net income attributable to Sohu.com Limited was $12 million, compared with $25 million in the second quarter of 2021 and $9 million in the first quarter of this year. Now, I will go through some of our key businesses. First, Sohu Media Portal and Sohu Video. Sohu Media Portal kept improving our products, upgrading technology, and refining our algorithms and their accuracies. To enhance user experience, we stimulated content generation and user interaction to improve the features and then drive content distribution. During the quarter, our advanced live broadcasting technology, strong operating track record, and extensive media resources reinforced our credentials as a mainstream media platform and helped us better capture advertising value. For Sohu Video, we developed compelling long and short form content with our chain engine strategy, and explored monetization opportunities by integrating the live broadcasting into unique and creative events. Through our continuous efforts, we have built a strong and credible reputation as a science and knowledge-based live broadcasting platform, and attracted hundreds of leading professional broadcasters in various fields to our platform. In long form format content, we kept producing original dramas and reality shows to enrich our content library. In the second quarter, we completed shooting and entered the post-production stage of several original dramas, such as the sequel of Mysterious Love, a big hit combining idol romance and crime scenes. Next, turning to online game business. During the second quarter of 2022, online game revenues were in line with our guidance. With lower than expected operating expenses, the group's net income for the second quarter exceeded the high end of our guidance. In our business line for PC games, we introduced a new PVP, player versus player event for regular TLBB PC, and upgraded the artistic design of game characters. With TLBB Vintage, we introduced a new dungeon and upgraded character development system for its new expansion pack. In addition, in April, we launched the TLBB Vintage on the WeGame platform, which brought some long-time TLBB players back to the game. With mobile games, we launched an expansion pack for the anniversary of Legacy TLBB Mobile with the addition of skills development system and its revenue remained stable on a sequential basis. The next quarter, we'll roll out new content for TLBB PC, Legacy TLBB Mobile, and other games to keep the players engaged. Against an ever-changing environment, we'll stick to our top game strategy by promoting innovation to building the capacity of our team and rolling out more high-quality mobile games. In terms of game pipeline, while maintaining the core competitiveness of MMORPG, RPG games, we'll also invest in games of multiple genres, including the card RPGs and casual games. I'll now turn the call over to Joanna, our CFO, who will walk you through our financial results. Joanna. Thank you, Charles. I will walk you through the key financials of our major segments for the second quarter of 2022. All the numbers are on a non-GAAP basis. You may find the reconciliations of non-GAAP to GAAP measures on our IR website. For Sohu Media Portal, quarterly revenues were $60 million, down 27% year-over-year and up 13% quarter-over-quarter. The quarterly operating loss was $43 million compared with an operating loss of $28 million in the same quarter last year. For Sohu Video, quarterly revenues were $60 million, down 31% year-over-year, and up 7% quarter-over-quarter. The quarterly operating loss was $25 million compared with an operating loss of $13 million in the same quarter last year. For Changyou's online game business and the 17173.com, quarterly revenues $159 million, up 3% year-over-year and flat quarter-over-quarter. The quarterly operating profit was $85 million compared with an operating profit of $75 million in the same quarter last year. For third quarter of 2022, we expect brand advertising revenues to be between $25 million and $28 million. This implies annual decrease of 17% to 26% and a sequential increase of 0% to 12%. Online game revenues to be between $138 million and $148 million. This implies annual decrease of 11% to 17% and a sequential decrease of 6% to 12%. Non-GAAP net loss attributable to Sohu.com Limited to be between $35 million and $25 million. GAAP net loss attributable to Sohu.com Limited to be between $38 million and $28 million. This forecast reflects our 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. At this time, if you would like to ask question, please press star one one on your telephone and wait for your name to be announced. Once again, to ask question, please press star one one on your telephone and wait for your name to be announced. Thank you. The first question comes from the line of Thomas Chong of Jefferies. Please go ahead. Hi, good evening. Thanks management for taking my questions. I have two questions. The first one is on advertising. Given that we reached the high end of our guidance in Q2, and when I look into Q3 guidance, it represents around 0%-12% quarter-on-quarter growth. I just want to get a sense about under what scenario we should hit the low end and the high end of the guidance. Can you comment about the trend that we are seeing so far in the month of July, if any, as well as the trend for different verticals. My second question is about the gaming business. Given that, we are going to launch expansion packs in the third quarter, but we are seeing some sequential softness. Just want to get some color about, is there any macro uncertainties that may affect the gamer spending in the second half? Thank you. All right. All right, Tom. This is Charles. On advertising, it really depends on whether the you know the COVID-19 situation whether it will you know allow us to be able to do offline marketing events and some content events that draw advertisers. Depends, yeah. Basically about whether the you know the pandemic situation whether it be locked down or not. We see some uptake, some kind of advertisers coming back, you know try to start marketing their products entering I think June, July. We'll see. Hi, Thomas. Can I confirm that regarding the online game business, your question was whether the third quarter performance looked weaker than the second quarter? Yes. We saw some sequential decline in the guidance. Just want to get some color on that one. In the second half, the main focus will be on the expansion packs, how do they impact our revenue. For the weaker guidance for the third quarter, not because our TLBB Vintage launched on WeGame platform in the second quarter, and the game revenue jumped up obviously, and it didn't last into the third quarter. It will have a natural decline in the third quarter. Thank you. Thank you. All right. Thank you for the questions. As a reminder, if you would like to ask question, please press star one one and wait for your name to be announced. Our next question comes from the line of Alicia Yap from Citi. Please go ahead. Hi. Thank you. Good evening, Charles, and management. Thanks for taking my question. First, I actually wanted to ask about the third quarter guidance on the net loss. And just if management can share how you actually get into such a big loss. Is it really because of the gaming revenues is weaker? Any other reasons or which expense line that we should expect, you know, will become bigger in the third quarter? That's my first question. I'll follow up on another question. Yeah. I think the marketing expense mostly for third quarter is the new game, right? Sea of Dawn. Uh- Sea of Dawn. Sea of Dawn. Sea of Dawn. The marketing expense for the third quarter because actually the marketing event was postponed, right, from Q2 to Q3. That contribute to the most part of the marketing expenses for third quarter. On the portal side, that's a small part, but we do expect, or we're planning to do something, you know, to increase or to have our marketing activities to promote our, you know, live streaming and also a video app. And yeah, we'll spend money. As we said before, but we didn't spend as much in Q2. That both contribute to the larger, you know, net loss in Q3. Mostly the game marketing expense. I see. Sea of Dawn. I see. Any chance you can give us a rough amount that you have budgeted for this game marketing spend? I think we do, but we don't, yeah, we'll. Yeah, as we go along, we'll see whether, you know. I see. Okay. Thank you. My follow-up question is on the underlying. Sorry, Alicia. This is your operator. I'm afraid that the management has disconnected temporarily. Oh. Stay on the line. We'll just reconnect them for them to return the call before we take your next question. Okay, thanks. Hi. Do we have the management back, please? I think you may have accidentally muted. Thank you. Do we have the management back to the call, please? Yes, we are back. Are you guys there? Still there? Yes. Thank you very much. Alicia, please go ahead with your next question. Thank you. Yeah. You- Okay. Alicia, did you hear what I said the last part? I only heard about until the games. I mean, the budget will depend on the game's performance, and you will adjust accordingly. Yeah. Yeah, that's about it. You know, basically we spend like, you know, $10 million, $15 million, $20 million, that kind of thing for the new game. My follow-up question is on the overall underlying economies and also the advertising sentiment. I know you just now mentioned there's been some you know returns of the advertiser in June and July. Is that in line with what you expected or the return is actually better or worse than what you expected so far? Thank you. Well, I think it's so, you know, in Shanghai and the eastern market are very important market for us. The lockdown in Shanghai in Q2 have an impact. And after the lockdown in Shanghai was, you know, basically lifted, the companies, especially auto companies, are starting to, you know, spend money and have activities and marketing events. We see the coming back of the auto industry. Mm-hmm. Yeah, some internet services. Yeah. From FMCGs. It's expected. It's basically because the lifting of the lockdown and. Mm-hmm. I see. Regarding the remaining of the year, is that really depends on, you know, the overall COVID situation? Yes. We see that for the current situation, it depends. For now, it seems that offline activities are being held with some, you know, with some distancing and with mask wearing and those kind of things. Companies are having marketing events, and we also have some activities planned for our conferences and content conferences. We see advertising improvements in Q3. Okay. All right. Thank you so much. I get back to the queue. Thank you. All right. As a reminder, if you'd like to ask question, you can press star one one. Alicia, do you have any follow-up questions? I will go back to the queue and let others ask first. Thank you. At this time, we don't have any more questions. You may go ahead. I will take your question as last question. Oh, okay. All right. Thank you. I guess maybe any update in terms of the latest, you know, share buyback that management can comment on, and also overall, you know, the cost optimization effort, because I think a lot of other internet peers has done many, you know, different sort of cost optimization effort. Wondering, you know, will Sohu need to do any for the remaining of the year and also the share buyback update. Thank you. The share buyback, we're almost finished, right? Yeah. It's done. All the $100 million, right? We finished $90 million. We finished $90 million share buyback already. Okay. For cost cutting, actually over the last few years, we've been constantly doing that. Basically we only focused on media portal and video business and cut, you know, a lot of other business, you know, over the last few years. We don't have much optimization to do, unlike some of our peers who've been. Mm-hmm You know, doing a lot of business and then, when the economy is in the downturn then they're doing a lot of cost cutting. We don't need to do that. Actually, can I slip in the last one? Given you know, the current capital market and given, you know, we still have a you know, pretty decent size of cash, are there any emerging opportunity in terms of some of the attractive potential target, you know, given the valuation has come down quite a lot in both the public and the private space? I'm not sure if there's anything that trigger would you use some of your cash balance that you can actually beef up some of the businesses going forward? Thank you. Yeah. We are, you know, myself and I'm a believer of organic growth for internet companies to buy some products or buy some companies that integration and it's, and also forming a new, you know, gaining new competitive advantage is very hard. We do have a good, you know, quite a sizable, you know, capital, you know, so we will, you know, more focus on basically beefing up our current products and spending more on channels, on marketing, on our products, on our video and the news app, and its social network and, you know, new live streaming. We do not have any acquisition or the non-organic. Mm-hmm. You know, we don't see any those kind of opportunities. Okay. Great. Thank you, Charles. Thank you for the questions. That does conclude today's conference call. Ladies and gentlemen, thank you for participating. You may now disconnect. That concludes the conference for today.