Ladies and gentlemen, thank you for standing by, and good evening. Thank you for joining Sohu's Fourth Quarter 2023 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. [Operator Instructions] 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.

Thanks, operator. Thank you for joining us to discuss Sohu's fourth quarter 2023 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's 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 Pu. And thank you, everyone, for joining our call. In the fourth quarter and the full year of 2023, we continued to optimize operating efficiency with strict budget control, despite the external economic environment and cautious budgeting by advertisers. Thanks to these efforts, our bottom-line performance hit the high end of our guidance for the fourth quarter of 2023. At Sohu Media Portal, we further refined our products, upgraded technology and expanded premium content offerings, resulting in an enhanced user experience. At Sohu Video, we continued to execute our Twin Engine strategy by developing engaging long- and short-form content. In addition to the social distribution of -- social network distribution of short-form content, we also worked hard on science-based live broadcasting and other live broadcasting events, which further boosted user interactions and engagement on our platforms. We also proactively explored diversified monetization opportunities by integrating our advantageous resources and hosting various content marketing campaigns with our unique IPs. Lastly, our online game business remained stable, delivering revenues in line with our expectations. Before going through each business unit in more detail, let me first give you a quick overview of our financial performance. For the fourth quarter of 2023, total revenues, $141 million, down 12% year-over-year and 3% quarter-over-quarter. Brand advertising revenues, $20 million, down 30% year-over-year and 9% quarter-over-quarter. Online game revenues, $115 million, down 5% year-over-year and 2% quarter-over-quarter. GAAP net loss attributable to Sohu.com Limited, $13 million, compared with net loss of $7 million in the fourth quarter of 2022 and a net loss of $14 million in the third quarter of 2023. Non-GAAP net loss attributable to Sohu.com Limited was $11 million, compared with a net loss of $2 million in the fourth quarter of 2022 and a net loss of $10 million in…

Thank you, Charles. I will now walk you through the key financials of our major segments for the fourth quarter and the full year of 2023. All the numbers on a non-GAAP basis. You may find the reconciliation of non-GAAP to GAAP measures on our IR website. For Sohu Media Portal, quarterly revenues were $16 million compared with revenues of $21 million in the same quarter last year. The quarterly operating loss was $36 million compared with an operating loss of $33 million in the same quarter last year. For the full year 2023, Sohu Media Portal revenues were $66 million compared with revenues of $77 million in 2022. The full year operating loss was $139 million compared with an operating loss of $161 million in 2022. For Sohu Video, quarterly revenues were $9 million compared with revenue of $16 million in the same quarter last year. Quarterly operating loss was $32 million compared with an operating loss of $21 million in the same quarter last year. For the full year 2023, Sohu Video revenues were $47 million compared with revenues of $63 million in 2022. Full year operating loss was $130 million compared with an operating loss of $99 million in 2022. For Changyou's online game business and 17173, quarterly revenues were $116 million compared with revenues of $122 million in the same quarter last year. Quarterly operating profit was $47 million compared with an operating profit of $54 million in the same quarter last year. For the full year 2023, Changyou's online game business and 17173 revenues were $485 million compared with revenues of $592 million in 2022. The full year operating profit was $203 million compared with an operating profit of $282 million in 2022. For the first quarter of 2024, we expect brand advertising revenues to be between $15 million and $17 million. This implies an annual decrease of 25% to 33% and a sequential decrease of [16%] (ph) to 26%. Online game revenues to be between $110 million and $120 million. This implies annual decrease of 7% to 15% and a sequential decrease of 4% and a sequential increase of 5%. Non-GAAP net loss attributable to Sohu.com Limited to be between $23 million and $33 million. And GAAP net loss attributable to Sohu.com Limited to be between $26 million and $36 million. This forecast reflects management's 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. We will now begin the question-and-answer session. [Operator Instructions] Our 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. My first question is about our thoughts about the impact of macro headwind to the advertising market in 2024. And for Sohu brand advertising, how's the trend so far across auto, FMCG, Internet services and property sectors? And my second question is about our capital allocation strategy. What makes us increase the authorized amount from $80 million to $150 million as we repurchased only about $12 million as of the end of February? Thank you.

So, your first question is about the advertising trends. So, the macroeconomic situation is not as good. So, it will -- trending down basically. The advertisers are being cautious in their budgets. So, our exposure to real estate is really small. So, the property market -- property advertising is not a lot. We'll continue -- we'll see a continued percentage of advertisers. Industries are -- number one is the auto and the Internet services and FMCG, the three sectors. But it's -- yes, it's trending down. Yes, we increased the repurchase from $80 million to $150 million, but it's -- we've been able to purchase -- repurchase $12 million so far due to daily volume -- there's limitation to daily volumes. That's why we would not be -- we would like to complete them all, but it takes time, because daily volume is really low. Did I answer your question?

Hello, Thomas, your line is still open. If you have any follow-up questions, please ask ahead.

Yes. Thank you.

Thank you for the questions. [Operator Instructions] Next question comes from Alicia Yap from Citigroup. Please go ahead.

Hi. Can you hear me okay? Hi, management.

Yes.

Yes. Hi. Thank you, Charles. Good evening. I have a couple of questions. First is that your first quarter guidance, I think the advertising came a little bit softer than our estimate. Can you elaborate a little bit the current macro environment that you have seen and the advertiser budget sentiment? Is that been trending weaker than you previously expected, or is it in line with what you are expecting? And then, do you expect the macro to turn better in the second half this year, or do you think the weak macro could last a little bit longer? And then second question is on your loss guidance. If we are keeping some of the cost of revenue -- I mean, the cost of revenue for online advertising, does that suggest that the gross profit for online advertising in the first quarter could be actually negative? Just kind of a little bit color like how you guided so much wider on the loss. And then lastly, on the share buyback, is there any reason the buyback pace during the quarter has been a little bit slow? Is that the limit on the daily trading volume, or is it a predetermined price that prevent you from getting more aggressive? Thank you.

Yes. I think the advertising market seems -- is trending even down faster than we expected, right? We can see that. And also, this year's spring festival, the Chinese New Year is kind of February 10th, it's little later than last year, right? So, people are -- most of the Q1, people are in holidays. So, many of the companies or the -- our advertisers, they're just -- they start to plan for the year only after the Chinese New Year and then after the -- after 15th, right, of the year. So that's why we only started talking to these advertisers last few days because they all came back to work, and that's why Q1 is even a slower quarter compared with the Q1 of last year. So, it seems I don't see any -- definitely, the seasonality -- definitely will not be a -- no problem with Q2, right? There is no seasonality issue, since Q2 is normally -- is a strong quarter for advertising. But the macro economy situation is not in the -- it seems not improving in the near future, right? So, we expect not much improvement, but definitely will be better than Q1 seasonality. And also, I hope to do it better to -- because we are -- we have some -- also some -- continue our effective and innovative marketing campaigns that bring advertisers. Cost of revenue or gross profit widening, because our current goal or our ambition is really to have strong products and attrition of basically to develop large user base. And with the cash we have, we're still fighting. We're not retreating or we're still fighting. We need to develop user bases. So that -- so in the coming years -- month or year, we're spending more on marketing and on building our products and the video, social network and live streaming user-generated content [indiscernible] products. So that explains that we have forecast a wider loss for Q2. Share repurchase pace is purely due to the daily volume limitation. It's not the price target. No, we don't have a tight price target to limit the purchase.

Okay. Thank you, Charles.

Yes, Alicia?

Yes. Thank you, Charles.

Thank you for the questions. [Operator Instructions] There are no further question at this time. I would like to conclude the call. Thank you for participating in today's conference call. You may now disconnect your lines.