Ladies and gentlemen, thank you for standing by, and good evening. Thank you for joining Sohu's first quarter 2020 earnings conference call. At this time, all participants are in listen-only mode. After management prepared remarks, there will be a Q&A 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 today to discuss Sohu's first quarter 2020 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 today are Changyou CEO, Dewen Chen, and CFO, Yaobin Wang, and Sogou CEO, Xiaochuan Wang, and CFO, Joe Zhou. 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 in this conference call are 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 statement. For more information about the potential risks and uncertainties, please refer to the company's filings with the Securities and Exchange Commission, including its 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 to everyone joining our call. Okay, should be all right now. During the first quarter of 2020, the COVID-19 outbreak inevitably impacted the overall economy and the advertising industry as well. Facing these challenges, we continued to explore new opportunities and differentiated development strategies. For Sohu Media Portal as a mainstream media platform, we continue to refine the product to generate and distribute a large amount of timely and accurate information, especially regarding the pandemic and its prevention. For Sohu Video, we proactively explored new opportunities in the live broadcasting of medical and health-related content and provided unique content and valuable information to our audiences. We'll continue to explore diversified revenue sources and the ways to further narrow losses. For Changyou, online games performed well during the first quarter, mainly driven by the solid performance of both TLBB PC and the Legacy TLBB Mobile.
The privatization of Changyou was completed on April 17th, after which Changyou's profit will be wholly attributable to Sohu.com Limited. Going forward, we plan to increase the integration of resources and combine Changyou onto Sohu's platform. Despite the challenging environment during the COVID-19, Sogou's core search business continued to outperform industry. The search and Mobile Keyboard recorded new highs in terms of traffic and user base, respectively. Before I go into more detail about our key financial results, please be reminded that since Changyou's cinema advertising business ceased operations in the third quarter of 2019, the results that we will discuss today and the comparative figures that we refer to here only cover continuing operations and exclude the cinema advertising business. For the first quarter of 2020, total revenues, $436 million, up 6% year-over-year and down 11% quarter-over-quarter.
On a non-GAAP constant currency basis, total revenues would have been $15 million higher than our reported revenues, which would be a 10% improvement year-over-year. Constant currency GAAP. Net brand advertising revenue, $26 million, down 40% year-over-year and 39% quarter-over-quarter. Search and search-related revenue, advertising revenue, $238 million, up 1% year-over-year and down 13% quarter-over-quarter. Online game revenues, $133 million, up 35% year-over-year and 1% quarter-over-quarter. Non-GAAP net loss attributed to Sohu.com Limited was $18 million, compared with a net loss of $52 million a year ago, the first quarter of 2019, a net income of $7 million in the fourth quarter of 2019. Excluding the profit loss generated by Sogou, non-GAAP net loss attributed to Sohu.com Limited was $8 million. Yeah, net loss, $8 million.
Compared with a net loss of $51 million in the first quarter of 2019, and a net loss of $6 million in the fourth quarter of 2019. Let me go through some of the key businesses. First of all, Sohu Media Portal and Sohu Video. During the first quarter of 2020, the whole country and even the whole world suffered from the outbreak of COVID-19. Although we were inevitably affected by the pandemic, as a mainstream media platform, we continuously focused on generating and distributing helpful real-time reports and live broadcasts to provide accurate and reliable pandemic information and prevention knowledge. On the product side, we continue to promote interactions between our core products and enhance the social features through product innovation, social network features.
We inserted a live broadcast feature in our Sohu News app in the information stream where users can automatically transfer or jump to the Sohu Video app to watch the live broadcast. We can instantly switch back to Sohu News app to browse other news with a single click. These upgrades allow users to access timely and accurate information on Sohu's product matrix and further consolidate our advantage and influence as a mainstream media platform. On the content side, for our Sohu Media Portal, in addition to our efforts to consistently refine our product to provide readers with a better user experience, we also work hard to seize authors' fragmented time and facilitate the generation of high quality short and long form content. This has further improved communication and interaction between readers and writers.
For Sohu Video, during the COVID-19 outbreak, we accelerated the deployment of our live broadcasting capability and launched a highly regarded 24-hour medical broadcast that has focused on health topics and related to pandemic news and prevention. We are taking the opportunity to actively explore other verticals and also building knowledge platform that provides users with timely and accurate information and content to integrate live broadcasting with our premium content during the reduced volume. During the release of our long-form drama, Well Intended Love 2, [Foreign language] and High School Big Bang, or [Foreign language], we introduced a multi-person microphone relay feature, [Foreign language], which allowed the audience to interact with the show's actor directly. The new initiative improved user engagement loyalty and further boost the interest in long and short-form videos.
On the monetization side, it is expected that the negative impact of the pandemic on the overall economy will continue for some time, though it appears that China is currently on track for recovery. Our advertising business faced a big headwind in the first quarter. Nevertheless, we actively worked on diversifying our revenue by integrating our resources and leveraging the synergies between our core products. Starting in April, some of our events resumed, such as our drone photography contest and SohuTech's 5G Summit.
Furthermore, during the quarter with the adoption of the above-mentioned multi-person microphone relay feature, we launched a new live broadcast called Boss One Plus One, which we invite celebrities in different industry segments to share their insight, views on trends in the economy and the market with the events and live broadcasts to help advertisers further expand their branding and promote our position as a mainstream media platform. We'll continue to explore new opportunities to secure advertising budgets in the coming quarter. Next, turning to Changyou. Following Changyou's privatization on April 17th, Changyou's profit will be wholly attributable to Sohu.com Limited. However, since this transaction was completed in the second quarter, the change is not reflected in our first quarter financials. Going forward, we plan to increase the integration of resources and combine Changyou onto Sohu's platforms for more opportunities.
For the first quarter of 2020, online game performed well. The Changyou financial results exceeded the top end of our prior guidance. For PC games, revenue for the first quarter rose significantly on a sequential basis, mainly due to the better-than-expected performance of TLBB PC. Due to COVID-19 outbreak, player engagement and willingness to pay saw notable improvements in a short period of time. For mobile games, player engagement remained stable during the quarter with the launch of a new version, new expansion packs for the Spring Festival for Legacy TLBB Mobile, as well as several holiday events. We expect revenues from TLBB PC and TLBB Mobile and user engagement to decline in the second quarter of 2020 as people get back to work. Looking ahead, Changyou will continue to execute its core strategy of top games.
We'll continue to focus on MMORPG mobile games while developing some casual and strategy games. Changyou intends to expand more into the international market for games. Key games across different genres are being developed in an orderly way, and we believe that Changyou is well-positioned to roll out high-quality games for players in the future. Lastly, for Sogou. In first quarter of 2020, despite the setbacks in the macro environment and the online advertising industry in China amidst COVID-19, Sogou's core search business continued to outperform the industry. Both the core search and mobile keyboard recorded new highs in the quarter, thanks to the surge of users' demand for reliable information, the high efficiency during the pandemic. Sogou Mobile Keyboard further expanded its DAUs by 9% year-over-year to 482 million, reinforcing its position as the third largest Chinese mobile app in terms of DAUs, according to iResearch.
Sogou carried out an all-around upgrade across the core business, leveraging the leading AI technologies and tapped into new areas with high revenue potential. Sogou's smart hardware business maintained steady progress. Looking ahead, we expect Sogou to resume healthy growth post the pandemic, with a steady momentum in search business and acceleration of growth in other businesses. Let me turn over the call to Joanna, who will work you through our financial results. Joanna.
Thank you, Charles. I will walk you through the key financials of our four major segments for the first quarter of 2020. All of the numbers that I will mention are all on a non-GAAP basis. You can find a reconciliation of non-GAAP to GAAP measures on our IR website. For Sohu Media Portal, quarterly revenues were $50 million, down 33% year-over-year and 34% quarter-over-quarter. Quarterly operating loss was $23 million, compared with an operating loss of $35 million in the same quarter last year. For Sohu Video, quarterly revenues were $23 million, down 11% year-over-year and up 8% quarter-over-quarter. Quarterly operating loss was $11 million, compared with an operating loss of $34 million in the same quarter last year. For Changyou, quarterly revenues including 17173.com were $136 million, up 32% year-over-year and 1% quarter-over-quarter.
Changyou posted an operating profit of $56 million, compared with an operating profit of $45 million in the same quarter last year. For Sogou, quarterly revenues were $257 million, up 2% year-over-year and down 15% quarter-over-quarter. Net loss was $31 million, compared with a net loss of $3 million in the same quarter last year. Before we go through the outlook for the second quarter of 2020, please note that after the completion of Changyou's privatization, Changyou changed its policy for its TLBB subsidiaries with respect to distribution of cash dividends. As a result, it is expected that Changyou will recognize an additional accrual of withholding income tax of $88 million for the second quarter of 2020. For the second quarter of 2020, we expect total revenue to be between $410 million and $445 million. Brand advertising revenue to be between $32 million and $37 million.
This implies annual decrease of 16%-27%, and a sequential increase of 25%-45%. Sogou revenue to be between $260 million and $280 million. This implies annual decrease of 8%-14%, and a sequential increase of 1%-5%. Online game revenue to be between $102 million and $112 million. This implies annual increase of nil to 10%, and a sequential decrease of 16%-24%. Excluding expected accrual of withholding income tax of $88 million discussed above, non-GAAP net income and the loss attributable to Sohu.com Limited to be between a net loss of $5 million and a net income of $5 million. Non-GAAP net income and the loss per fully diluted ADS to be between a net loss of $0.13 per ADS and a net income of $0.13 per ADS.
Excluding the expected accrual of withholding income tax, GAAP net loss attributable to Sohu.com Limited to be between nil to $10 million, and GAAP loss per fully diluted ADS to be between nil to $0.25. Excluding the profit and loss generated by Sogou, and further excluding withholding income tax, non-GAAP net income attributable to Sohu.com Limited to be between nil and $10 million, and GAAP net income and the loss attributable to Sohu.com Limited to be between a net loss of $4 million and a net income of $6 million. This forecast reflects Sohu's management current and preliminary view, which is subject to substantial uncertainties, particularly in view of the potential ongoing impact of the COVID-19, which remains difficult to predict. This concludes our prepared remarks. Operator, we would now like to open the floor to questions.
Thank you. Ladies and gentlemen, we will now begin the question and answer session. To ask questions on the phone, please press star one and wait for your name to be announced. If you would like to cancel a request, you can also press the pound or hash key. Once again, to ask question, please press star one. First question comes from the line of Eddie Leung of Bank of America Merrill Lynch. Please go ahead.
Hi, good evening guys. Just a question on perhaps Changyou and the other one on the media portal business. On Changyou, could management give us more color on the potential pipeline for the upcoming couple of quarters? We understand that there should be some uncertainty, but that would be great to hear management target and plan. Then on the media portal business, probably also related to Sohu Video advertising as well. We have seen a big decline in the first quarter because of the COVID-19 outbreak, but are we also seeing a pretty nice recovery in the second quarter? In terms of the advertiser segments, could you give us some color on the strengths and weakness of different advertiser industries, and which ones have been driving the recovery in the second quarter? Thank you.
Okay.
The first question is about what other pipelines there are for the next two quarters.
Okay. For the next two quarters, Changyou's own products that may be launched include Tetris Block and Luodingji. As for [Foreign language] games, in Q2, the one that has already been launched is the Korean version of Chen fan Chen Ming Xing. In the next two quarters, we should also have [Foreign language] games and SLG games to be launched. These are [Foreign language] products.
Hi, Eddie. It's Yu Jia translating for Dewen and Yaobin today. For self-developed games, we will have Tetris and DMD Mobile for the next two quarters. For licensed games, we have one that has been launched in South Korea, that is the POS Extreme Match. We also plan to launch some of those strategy games in the coming quarters.
Is there anything else?
As well as a tower defense product.
Tetris Block, I just said it. Russian Square.
Tetris Block, in English it is called Russian Square.
Tetris.
Tetris.
Okay. To answer your second question about the media. Yes, brand advertising actually includes both the portal and video. It suffered some impact in the first quarter, but if you look at the numbers, actually, according to our forecast or estimate, business outlook that it recovered actually pretty strongly, right? Above the average industry level. It's mostly from the portal side, but we are basically, as I said in the script, that we actually channeled through the different apps, the Sohu News app and the Sohu Video app, especially the live broadcasting all happening on the Sohu Video app.
All these portal advertisers, and they can have innovative new marketing initiative with our live broadcasting, with both apps combined, so that especially when offline gatherings are restricted or limited, or there is limited number of people appear in the same hall, these live broadcasting and the online format of communication actually help them to launch new products. Because of our innovation in the live broadcasting area in the first quarter, we are able to get some real good advertising deals. The overall portal advertising have recovered stronger than expected. I can see some auto industry, there is a kind of a rebound in the second quarter. They need to market their products. It's almost like a rebound, I would say, and also some other industries. I think led by the auto industry, right? The auto industry. Are there any other industries?
The recovery of other industries. No more. Yeah. I hope I answered.
Thank you very much.
Okay. All right.
Thank you for the questions. I will take the next questions from the line of Thomas Chong of Jefferies. Please go ahead.
Hi, management. Thank you for taking my questions. This is Mavis asking on behalf of Thomas. Could management provide some colors on the SME and key advertising mix? Moreover, could you talk more about the profitability timing? Thank you.
Yeah, the SME, I think for the Sohu side, our recovery mostly are due to the brand advertising of some large brands, because we can take advantage of our innovative products, the live broadcasting. I think on the Sohu side, or Xiaochuan can comment on the SME side, that represents SME companies advertising trend seems to recovering slower than brand from our experience. Asking about profitability, right? Schedule for profitability?
Yes.
Okay, if you look at our forecast for Q2, excluding Sogou, the group, because in Q2 there's excluding 17 days of profit contribution from Changyou. In 90 days, you have 73 days of contribution of earning from Changyou. With the cost management of Sohu, and also the relative recovery of the brand advertising, we have a forecast of actual profit, excluding Sohu, of between $0-$10 million. You can see that. That's basically the schedule. Q2, we are going to be profitable. Yeah. Any other questions?
Thank you.
SME-
The next question.
Yeah. All right.
Thank you. Please continue.
SMEs in the slower, right? Recovery from a Sohu experience. Yeah, which is true.
Thank you.
Okay.
Next question. Thank you. Our next questions comes from the line of Alicia Yap of Citigroup. Please go ahead.
Hi. Good evening, Charles, and management team. Thanks for taking my question. Wanted to get a sense on the impact of the postponing of the Olympic, in terms of the ad budget this year. How are advertisers spending commitment change? Are these budget gone with the postponing of the event, or are they redeploying some of that to other events? Related to the guidance, which I think you alluded to, is actually much better than the industry standard. How much are we expecting to get from the new live broadcasting initiative, in the second quarter, and how should we think about into the second half as well? Will Sohu actually get benefit from these new features that we are introducing? Thank you.
Yeah, I think, definitely the postponement of the Tokyo 2020, it's among the many things that cannot postpone. It's very hard to see this as, this one event, what's the impact on advertising. Yeah, we have improved or better than expected results for Q2 because these live broadcasting application of the technologies not only helped with some of those brand advertisers to secure advertising deals from them. Also it become very much needed because all companies need to have a online, offline strategy. Sohu Video or Sohu, the matrix can provide that solution to them. Most importantly, it actually helped Sohu's own events. If you look at 2019, we had a lot of events, marketing events, or we call it activities as contents. All these almost, due to the COVID-19, we postpone it.
Because of our own technology, we are able now to launch it in Q2. In Q2, we launched the drone contest event, with online, offline technology help. We launched the talents for campus. It took place yesterday, right? The 5G forum, with online, offline, with probably only 200 people or less than 200 people at the site, in the conference hall. There are hundreds of thousand people watching from other places, and even some panelists can actually interact with the panel from anywhere in the world. That helped us. It's really actually these new online broadcasting technologies that helped our own events, and these events are a kind of a catalyst or some kind of to help us to secure some really marketing deals.
As they did in 2019, and then it's working because of this new approach. I think this trend will continue. In the second half of the year, we will refine our technology and with also new applications, new application VR on even 5G technologies. We'll be able to help have a more innovative tools for company to market themselves at the time of COVID-19. We will look at a continued profitable quarters after quarters, I'm saying that excluding Sogou. Of course, we hope that Sogou will also recover in the second or third quarter.
Okay. Thank you, Charles.
Thank you for the questions. Once again, if you would like to ask question, please press star one.
Okay, great.
Please don't.
Okay.
We do have a last questions from the line of Forum Tech Research, Chong Chu, please go ahead.
Hey, good evening, Charles. After Changyou's privatization, I just wonder, do you guys have any changes in terms of the strategy, in terms of resource allocation? Will you keep Changyou going, put necessary resource into it to grow the gaming business?
I think for the most part, I think Changyou will continue to operate like a independent company. To really have good games and really compete in the gaming industry, just like a independent company. The group, the Sohu side can only try to If we can do something, if we can help Changyou to grow, let's say some of those games are suitable or good for the Sohu platform to market the games, it will very cost effective. We'll do that. Still, Changyou, there is a lot of other platform that Changyou have to spend money to buy, to distribute the games. There is some synergy, I will be very cautious. We'll want to make sure Changyou continue to fight and compete like a standalone company and compete with the industries.
Thank you for the questions. Once again, to ask question, you may press star one. At this time, there are no further questions on the line. Thank you, ladies and gentlemen, that does conclude the conference call for today. You may now disconnect your lines.