Ladies and gentlemen, thank you for standing by and good evening. Thank you for joining Sohu's Second Quarter 2019 Earnings Conference Call. At this time, all participants are in listen-only mode. After management's 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, Huang Pu, Investor Relations Director of Sohu. Please, go ahead.

Thank you, operator. Thank you for joining us today to discuss Sohu's second quarter 2019 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's CEO, Dewen Chen; and the CFO, Yaobin Wang; and Sogou's CEO, Xiaochuan Wang; and the 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 in 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.

Thanks, Huang. Thank you to everyone for joining our call. Under the current challenging macroeconomic environment, our total revenues stayed largely in line with our prior guidance. Our bottom line performance, excluding the charge for impairment of assets recognized by Changyou, related to its cinema advertising business, met the high-end of our prior guidance. This was mainly driven by the continued cost savings that we were able to achieve at Sohu Video and the solid performance of our online game business. So for Sohu Media, Sohu Media is making a comeback and living up to its reputation as a top tier media platform. We've been hosting high-quality events, generating and distributing premium content and strengthening our core competitiveness and credibility among media brands. Meanwhile, Sohu Video continues to provide users with unique high-quality dramas and shows. We've seen the positive effect of this differential development strategy and stable improvements in monetization at both Sohu Media and Sohu Video. We hope to see further progress in the coming quarters. In the second quarter of 2019, Sogou achieved steady growth in its core search business, while Sogou Mobile Keyboard further expanded its user base and reinforced its position as the third largest Chinese mobile app. For Changyou, both its revenue and profit exceeded expectations, excluding the aforementioned charge of impairment. More importantly, Changyou is demonstrating a stable profitability, while developing more games to provide a diversified product portfolio. Before I go into more detail about our key business, let me summarize our financial results for the second quarter. Total revenue is $475 million, down 2% year-over-year and up 10% quarter-over-quarter. On a non-GAAP constant currency basis, total revenues would have been $32 million higher than our reported revenues, which would be a 4% improvement year-over-year. Net brand advertising revenues $44 million, down…

Thank you, Charles. I will walk you through the key financials of our four major segments for the second quarter of 2019. 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 $24 million, down 27% year-over-year. The quarterly loss was $38 million which compares with a net loss of $37 million in the second quarter of 2018. For Sohu Video, quarterly revenues were $21 million, down 34% from a year ago, of this, advertising revenues were $8 million. The operating loss for Sohu Video was $23 million which compares with a net loss of $35 million in the same quarter last year. For Sogou, quarterly revenues were $304 million, up 1% year-over-year and 20% quarter-over-quarter. Net income was $28 million compared with net income of $38 million in the same quarter last year. For Changyou, quarterly revenues including 17173 were $119 million, up 5% year-over-year and down 4% quarter-over-quarter. Changyou posted net income of $40 million compared with net income of $28 million in the same quarter last year. For the third quarter of 2019, we expect total revenues to be between $445 million and $470 million. Brand advertising revenues to be between $45 million and $50 million, this implies annual degrowth of 12% to 21% and a sequential increase of 2% to 14%; Sogou revenues to be between $304 million and $314 million. This implies annual increase of 10% to 14% and a sequential increase of 0% to 3%. Online game revenues to be between $80 million and $90 million, this implies annual degrowth of 6% to 17% and a sequential decrease of 12% to 22%. Non-GAAP net loss attributable to Sohu.com Limited to be between $22 million and $32 million and non-GAAP loss per fully diluted ADS to be between $0.55 and $0.80; GAAP net loss attributable to Sohu.com Limited to be between $25 million and $35 million and GAAP loss per fully diluted ADS to be between $0.65 and $0.90. Excluding the profit generated by Sogou and Changyou, non-GAAP loss attributable to Sohu.com Limited to be between $50 million and $55 million. GAAP net loss attributable to Sohu.com Limited to be between $53 million and $58 million. For third quarter of 2019 guidance, we used a presumed exchange rate of RMB 6.9 to $1, which compares with the actual exchange rate of approximately RMB 6.8 to $1 for the third quarter of 2018 and RMB 6.81 to $1 for the second quarter of 2019. With that, this concludes our prepared remarks. Operator, we would now like to open the call to questions.

Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] The first question comes from the line of Eddie Leung from Merrill Lynch. Please ask a question.

Good evening management team. Thank you for taking my question. I would like to know, if you could tell a little bit about the advertising outlook getting into second half of the year versus what we had in the second quarter? Particularly, could you also comment on the competitive landscape which we heard have been affecting the advertising prices in the industry? Thank you.

The macroeconomic situation definitely is -- there's really pressure over advertising but because the -- we have so many -- I mean there's many sectors -- certain sectors are under pressure like auto. But there's a lot of other sectors verticals that actually we're seeing even growth and that's why for Sohu Media Portal, we're having a lot of activities – content generation activities and some unique marketing events that attract advertisers to advertise on the Sohu platform with this premium – with these premium content so that we are able to attract. So that's why we are looking at a even under this slowdown the incoming slowdown we are actually looking at a growth compared with Q2 right, yeah, for advertising. And for video same thing, for video we have some unique drama or – and variety shows that have a – building the advertising. So we are not competing on price, but competing on the premium event, or content that can be competitive in getting advertisers.

That's very helpful. Thank you, Charles.

Welcome.

Thank you. [Operator Instructions] We have the next question come from the line of Alicia Yap from Citigroup. Please ask the question.

Hi. Good evening, Charles and Joanna. Thanks for taking my question. I have a couple of questions. Number one is related to the latest regulatory environment and the restrictions on the TV dramas, what are the impact to Sohu Video so far if any? Second question is related to this overall App sentiment weakness I think Charles did mention on the prepared remarks inside Sohu Media the portal had some decent comeback. So wanted to get a sense in terms of how we should think about this into – even a little bit further into next year? And what is mainly driving the more positive momentum on the media portal side? Thank you.

Okay. First of all, on the media content side there are some regulations but we are well – we are from the very starting choosing the topics and also to work together with the authorities. So it now has been not a problem with the release of our TV dramas. Because for example, like there is a restriction on leaking or some dramas of ancient times right the historical stories. But, we only – we know only produce modern dramas topic scene of modern times. And also relatively compared with the television, TV dramas, those are actually more relaxed. Because it's – yeah so it's not a problem. We've been like recently are Nai He BOSS Yao Qu Wo, Well-Intended Love and also [indiscernible] The Next Superstar quite a – yeah, there's no way – no problem to get the approval from the authority. It’s actually an interactive process with authorities to make sure that our dramas get approved. In terms of media advertising into the -- so as I have said in my answer to the first question, the premium activities or content-generated activities or our -- for example, like our Sohu-sponsored, the Sohu News Marathon that involved a lot of celebrities, that is getting advertisers, because in that event we have Sohu Media and also the Sohu Video as a reporting media to report these celebrities running marathon. It's been a project that has been -- we've been doing it for like the 10th time or 11th time actually. So it's actually getting good advertisers. And also like the other ones, which we just launched the Drone Contest -- Drone Filming Contest, which is also getting good advertisers. So, it's -- these kind of -- and also the forum that we have, 5G Forum, and also in next…

Thank you.

Thank you. [Operator Instructions] We have the next question that comes from the line of Wei Tzu from First Capital. Please ask the question.

[Foreign Language]

[Foreign Language] Got it?

Okay. Thank you.

All right.

Thank you. [Foreign Language] [Operator Instructions] Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.