Ladies and gentlemen, thank you for standing by, and good evening. Thank you for joining Sohu's Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a 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 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 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.
Thank you, Huang Pu. Thank you everyone for joining our call. In the third quarter of 2020, we faced severe headwinds from COVID-19 pandemic and uncertainty in the macroeconomic environment. Despite these, we maintained our focus on refining our products, improving operating efficiency, and enhancing monetization capabilities. Thanks to strict budget controls and solid performance of our online game business, our bottom line performance over the quarter was well above expectations. For Sohu Media Portal, we enhanced user experience through continuous improvements in products and technology. For Sohu Video, we continued to execute our twin engine strategy, developing science and knowledge-based live broadcasting with our advanced live broadcasting technology and compelling content and events. Leveraging the differentiated advantages of the Sohu product matrix, we continued to explore ways to improve monetization for both Sohu Media Portal and Sohu Video.
Online games performed well during the quarter with revenues exceeding our prior guidance. I'll go into details about each of these businesses in a moment, but first, a quick overview of our financial performance. For the third quarter 2020, total revenue $185 million, down 14% year-over-year, and 5% quarter-over-quarter. Brand advertising revenues were $26 million, down 24% year-over-year, and up 3% quarter-over-quarter. Online game revenues were a $149 million , down 11% year-over-year, and 5% quarter-over-quarter. GAAP net loss attributable to Sohu.com Limited was $22 million, compared with the net income of $12 million in the third quarter of 2021, and net income of $9 million in the second quarter of 2022.
Non-GAAP net loss attributable to Sohu.com Limited was $17 million, compared with the net income of $17 million in the third quarter of 2021, and net income of $12 million in the second quarter of 2022. Now I'll go through some of our key businesses. First, Sohu Media Portal and Sohu Video. For Sohu Media Portal, we consistently focused on product refinement and optimizing of our algorithms. We are continuously enhancing user experience and have kept users tightly engaged by facilitating large amounts of reliable real-time news and premium content. We are also working actively to integrate new features in our products to enrich users' visual experience. Working within this strategy, we were able to further consolidate and strengthen our position as a mainstream media platform.
For Sohu Video, we continue to execute our twin engine strategy, leveraging our advanced live broadcasting technology and premium content. We actively promoted the generation and the social distribution of our high-quality content. We strengthened our reputation as a credible leading science and knowledge-based live broadcasting platform. During the quarter, with the launch of a series of unique and influential science-related and nature-related broadcasts, for example, myself, Charles Zhang's Charles's Physics Class, et cetera, we have not only drawn wide attention from millions of audiences, but also attracted plenty of leading professional broadcasters in a variety of scientific fields into our platform. A long form content.
In long-form content, besides producing original dramas and reality shows, we also acquired cost-effective TV programs to complement our content library. Despite the ongoing negative impact of COVID-19 and the uncertainties it imposed on the market, we continue to explore new monetization opportunities to capture advertising budgets. We extended application scenarios of advanced live broadcasting technology and integrated into various high-quality content marketing activities. During the quarter, we successfully hosted Talk Under the Starry Sky, Camping at Forty-seven Degrees North, and the 14th Sohu News Marathon. These unique content marketing activities continued to make breakthroughs and spreading widely across social media platforms and demonstrating the value of Sohu Media. Through these such events, we were able to meet the demand of a wide range of advertisers and attract their advertising budget dollars. Next, turning to online game business.
During the third quarter of 2022, online game revenues performed well. In our business line for PC games, we roll out a new group, PVE, Player versus Environment dungeon, for regular TLBB PC, which was well-received by players. With TLBB Vintage, we introduced new weekly goals to keep the game fresh for players. With mobile games, we introduced some summer theme events for Legacy TLBB Mobile and adjusted the relative skill strength of some clans. Next quarter, to keep players engaged, we will roll out new content for TLBB PC, Legend, Legacy TLBB Mobile, and other games. Against the backdrop of an ever-changing environment, we will stick to our top game strategy by promoting the development of professional talent as well as innovation in content and technology, rolling out more high-quality mobile games.
In terms of game pipeline, while maintaining our core competitiveness in MMO, RPGs, we'll also invest in games of multiple types, including card RPGs and sports and idle games. Now I'll turn the call to Joanna, our CFO, who will walk you through our financial results. Joanna?
Thank you, Charles. I will now walk you through the key financials of our major segments for third quarter of 2022. All the numbers are on a non-GAAP basis. You may find a reconciliation of non-GAAP to GAAP measures on our IR website. For Sohu Media Portal, quarterly revenues were $50 million, down 11% year-over-year and 6% quarter-over-quarter. The quarterly operating loss was $38 million, compared with an operating loss of $37 million in the same quarter last year. For Sohu Video, quarterly revenues were $60 million, down 29% year-over-year, and up 4% quarter-over-quarter. The quarterly operating loss was $31 million, compared with an operating loss of $10 million in the same quarter last year.
For Charles, online game business and 17173, quarterly revenues $150 million, down 11% year-over-year, and 6% quarter-over-quarter. The quarterly operating profit was $58 million, compared with an operating profit of $79 million in the same quarter last year. For the fourth 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 decrease of 3% to a sequential increase of 9%. Online game revenues to be between $180 million and $128 million. This implies annual decrease of 11% to 18% and a sequential decrease of 14% to 21%.
Non-GAAP net loss attributable to Sohu.com Limited to be between $10 million and $20 million. GAAP net loss attributable to Sohu.com Limited to be between $30 million and $23 million. This forecast reflects our current and preliminary view, which is subject to substantial uncertainties. This concludes our prepared remarks. Operator, we would now like to open the floor to questions.
Thank you very much. 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. One moment for the first question. First question is from the line of Thomas Chong of Jefferies. Please proceed.
Hi, good evening. Thanks management for taking my questions. Given that we have seen the macro headwinds and also the outbreak of pandemic, just want to get some color from Charles. If you can share about how we should think about the advertising trend across different categories, like auto, FMCG, properties, et cetera? Also how we should think about the advertising outlook in 2023. My second question is about the gaming business. Given that we haven't seen bǎn hào released in October and so far in November, how should we think about the gaming approval trend in China? On Changyou, how should we think about our new games in the pipeline for next year? Thank you.
The general advertising market is kind of slowing. The trend is at least for Q3 and onwards. It's kind of downward. Among them, I think Auto is doing fine. Auto is doing relatively better. Real estate is really bad. The internet services, I think, Q3 is not as good as Q2.
It's a low season.
Because, in Q3, Q1, Q2, you have, you know, the festivals, 618, right? Q3 is a low season, and FMCG seems doing better in Q3. Yeah, that's the relative ranking of the sectors. Your next question is about game, right?
Yes.
We have a couple of projects that are waiting for the license approval, but we have no further news about that, so we're just waiting. Currently, in our game pipeline, we have more than 10 games, and half of them are fit for global market, and the rest of them are for the domestic market.
Thank you.
Yeah, amidst this advertising downward trend, we actually did a little better by, you know, as I just said, our unique marketing activities, unique events to the marketing activities that we were able to draw some advertisers.
Got it. Thank you.
Okay.
Thank you for the question. Our next question comes from the line of Eddie Leung of Bank of America. Please proceed.
Hey, Charles. Can I have a follow-up on the near-term advertising trend? Could you describe what you have seen in September, October, and early November? The reason we ask is, we all know there have been more lockdowns in the recent 12 months. Just wondering how you see the trend evolving in the past couple of months. That's my first question. Secondly, on use of cash, we continue to see a very strong cash balance. Wondering if we should expect any more share buyback program or even a dividend. Thank you.
Yeah. I think the lockdown did have a negative impact over our advertising income because companies, in fact, you know, we rely on mostly on brand advertising, so companies, especially large corporations, they were their previously you know scheduled events, marketing events and all those kind of things were not able to be held. That's why. That's the impact the their you know their spending on our platform. We are doing not so bad actually because we have some kind of online events like the I just mentioned the our physics class or other science and nature-based you know knowledge-based live streaming broadcasting events that does not need people to you know to meet in person.
We just, you know, get back a little bit some of the advertising dollars.
Use of cash?
Use of cash. Because of the macroeconomic uncertainties, we hold back after we've completed our, you know, as we reported, we completed a $100 million buyback already, right? Further buyback, we hold back because we just wait to see, you know, in view of the economic uncertainties with an MNC.
Got that. Thank you very much.
We have a lot of things to do. You know, we have a lot of things in our improving our products, developing our user base. We use for long-term. In the future, we do have, you know, places to spend our money.
Understood. Thank you very much.
Questions. As a reminder, to ask question, please press star one one. Next we have the questions from Alicia Yap from Citi. Please proceed.
Hi. Thank you. Good evening, Charles, and management. Thanks for taking my questions. I do have a couple questions. First is on the fourth quarter online gaming's revenue guidance. It seems quite a bit sequential decline. Can management elaborate a little bit the reasons of the soft gaming guidance? I thought, if I heard it correctly, Charles actually mentioned there will be some, you know, expansion pack update for the TLBB PC and all that. Just wondering, you know, kind of the discrepancy on the game's content update versus the guidance. Secondly, also related to the gaming, just in general, if management can share your view, has gaming industry monetization been affected by the latest macro weakness?
Have you seen or do you think the COVID lockdown or the soft macro have negatively impacted the gaming revenues and the gamers time spent on gaming?
Yeah. To answer your last question, yes, it's, you know, conflicting factors. One is that people have more time spending, you know, stay home and more time to play game. The macroeconomic situation, people have less money, so people are not willing to spend as much as before. That's why it's the game, the monetization. The overall effect is actually negative now. Go ahead.
That was primarily due to the natural decline of some of our older games for TLBB franchise, as well as the Sea of Dawn decline. Partly due to the negative impact of exchange rate.
I see. Thank you. Can I have one follow-up on the you know, brand advertising? If management can comment regarding you know, the guidance that you provide for Q4, as well as you know, your thoughts into 2023. Are you more confident or less confident about the recovery pace of the ad sentiment into next year?
Well, we are confident because our platform, our user base is growing and also our live broadcasting and also our unique marketing events activities, very unique, you know, other companies does not have this kind of things. We are confident, but it really depend on the overall economic situation, you know, the norm and also the future, you know, the COVID-19's policy, right? It all depends. If the economy is doing well, we are very confident that we'll do well. We'll do better than the overall average. It really depend on the COVID policy.
With the lockdown...
I see. Just lastly, on the share buyback, I think you mentioned, given because of the macro weakness, so you wanted to be a little bit cautious on spending the money, right? Let's say if macro recover and your gaming business is doing well, you know, advertising also recover, if your share price still around this level, then you would consider more aggressive buyback. Is that what you mean?
Well, we'll not exclude that possibility.
Okay. All right. Thank you, Charles. Thank you, management.
All right.
Thank you for the question. That concludes today's conference call. Thank you for your participation. You may now disconnect.