Ladies and gentlemen, thank you for standing by, and good evening. Thank you for joining Sohu's Second Quarter 2025 Earnings Conference Call. [Operator Instructions] Today's conference call is being recorded. I'd 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 Second Quarter 2025 results. On the call are Chairman and Chief Executive Officer, Dr. Charles Zhang; CFO, Joanna Lv; and the 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 second quarter of 2025, our Marketing Services revenues were in line with our expectations, while our online game revenues and the bottom line performance hit the high end of our guidance. For Sohu media platform, we continue to focus on refining products, enhancing the operation of our social networks and improving synergies across our product metrics. . During the quarter, we hosted differentiated events that not only attracted numerous participants with shared interests, but also encouraged them to build social connections and interact vibrantly with each other on our platform. With these efforts, we were able to increase our user engagement, further consolidate our brand influence and capture more monetization opportunities. Our online games delivered solid results, underpinned by our dedication to serving users' needs through compelling new content and continued optimization of our games. Before going through each business unit in more detail, let me first give you a quick overview of our financial performance. For the second quarter of 2025, total revenues were $126 million, down 27% year-over-year and 7% quarter-over-quarter. Marketing services revenues were $16 million, down 21% year-over-year and up 14% quarter-over-quarter. Online game revenues were $106 million, down 28% year-over-year and 10% quarter-over-quarter. GAAP net loss attributable to Sohu.com Limited was $20 million compared with a net loss of $38 million in the second quarter of 2024 and a net income of $182 million in the first quarter of 2025. Non-GAAP net loss attributable to Sohu.com Limited was $20 million compared with a net loss of $34 million in the second quarter of last year and a net loss of $16 million in the first quarter of 2025. Now I will go through our key businesses in more detail. For Sohu media…

Thank you, Charles. I will now walk you through the key financials of our major segments for the second quarter of 2025. 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 platform, quarterly revenues, $19 million compared with $24 million in the same quarter last year. Quarterly operating loss was $69 million compared with an operating loss of $72 million in the same quarter last year. For Changyou, quarterly revenues, $107 million compared with $148 million in the same quarter last year. Quarterly operating profit was $51 million compared with operating profit of $32 million in the same quarter last year. For third quarter of 2025, we expect marketing services revenues to be between $40 million and $50 million. This implies annual decrease of 20% to 25% and a sequential decrease of 4% to 10%. Online game revenues to be between $107 million and $117 million. This implies annual decrease of 8% to 16% and a sequential increase of 1% to 10%. Both non-GAAP and GAAP net loss attributable to Sohu.com Limited to be between $25 million and $35 million. This forecast reflects Sohu's 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.

[Operator Instructions] We will now take our first question from the line of Thomas Chong at Jefferies.

I mean, first of all, may I ask about our marketing services revenue. We talked about our marketing services revenue basically largely in line with the low end of the previous guidance. And we saw that in Q3, it seems that the advertising revenue is still suffering some sequential weaknesses. I just want to get some color from management with regard to our thoughts about the recent advertising sentiment. Is there any changes or deterioration because of the macro uncertainties? Any color that can be shared about the trend of different categories like auto, IT, FMCG, these categories. That's on the marketing services part. And then on the AI part, can management comment about how AI is applied into our operations, in advertising and gaming. And are we also using our own model or third-party models? And then lastly, regarding the share buyback program. Can management share about other than share buyback program, are we thinking of any other capital return like a dividend or other program to shareholders?

Okay. All right. So the question about the forecast of the future Q3 advertising situation. Yes, kind of there's a weakness because of the macroeconomic situation is not that good, and a lot of uncertainties and also the downgrade of consumptions because of people who just don't have -- less disposable income to buy things and also the competition of companies, the profit margin is lower, and so they are more cautious in investing in marketing spending. And as to sectors, still our largest sector is auto sector and followed by FMCG and IT services. For auto sector, well, it's now kind of stabilized with the price war getting steady and it's the new energy, I mean, electric cars market share is expanding while the luxury cars and also joint ventures are kind of shrinking. So with this kind of market situation, we have this unique events and IPs and create or launch the kind of unique events and combine with our online properties to have some kind of unique marketing opportunities, so that they do spend still on Sohu. Yes. That's about that we're trying to do. Yes, so the whole macroeconomic situation is really not that good. But since our advertising market share is very small, so if we are successful in our social media success platform, we will just get a larger share. So that we hope. But that will not happen in the next few quarters. We'll continue to build our user base. As to your second question about the AI application, I think, yes, it's improved. Especially in the online games part, right, it does improve the efficiency, productivity of online gaming. But for the media platform and social networks, it helps our users to get answers or get results with the search capability on each app. So now people are actually doing information search on each separate apps, not -- so we're using the AI to improve the AI answering capability of the Sohu Video and Sohu News app. But that apps, mostly social networks, now we turn it into a social network platform. So the AI help is only marginal, right? So we are using the open source language model and then based on that, build on that to develop on that. So we're using various models, large language models. About share buyback, yes, we are halfway into it, $83 million already consumed, and we don't have any plan to have other investments or capital investments, because we are fighting on a major user base building and social network wall. So we need a war chest to do the battle. Yes. I hope I answered your question.

Our next question comes from the line of Alicia Yap from Citigroup.

Can you hear me okay?

Yes.

A few questions from me. First is that, just wondering if you can share with us when should we expect the loss from the marketing service revenue to last? In other words, do you have a breakeven timing that you can share with us? This is the first question. Second question is related to the gaming guidance. It seems like sequentially, we are guiding a sequential increase. So if management can elaborate a little bit the reason for the sequential improvement on the game revenue. And then the third question is, I think, Charles, on your opening remarks, you mentioned a little bit on those like K-pop artist events. So just wondering how those events actually able to help you accelerate your user growth for your Sohu user app -- sorry, Sohu app user. That's all my questions, yes.

Well, so as I said, with the current traditional Internet media platform, for this kind of user base, it's very hard to breakeven, especially when we have -- we actually have 3 products that we're focusing on, 3 products. So it's kind of a multiple battlefield, it's a 3 battlefield fight. That's why. And since all the social network products and user base growth is nonlinear, it could hit a critical point, critical mass that it explodes or grow exponentially sometime in the future. And we don't know what that critical point is. So we don't know. So until that happens, before that, I don't think we will be able to breakeven, because we have [Foreign Language]. Yes, we don't know. But we hope -- I'm hopeful, I'm optimistic, I'm confident that it will happen, the critical point for social network to breakeven, to grow. As to the games sequential increase, yes?

[Foreign Language].

[Foreign Language] [Interpreted] The old games are expected to perform relatively stable during the third quarter. And we also rolled out a new version, a new game for TLBB PC on the 25th of July, which is called TLBB [Foreign Language] or TLBB Return in English. We expect the new game will bring some additional revenue.

Well, K-pop events, like the Hanfu event and others, yes -- and also the third question. All these events are community builders, because when people actually -- this competition is continued in the whole year competition and the events and then people get to know each other and people become users and broadcasters or self-media. People get into your communities by groups, right? So now we are the -- Sohu Video is the most top K-pop platform in China. That's why when South Korean K-pop teams, they're coming to China to do events after competitions among platforms and then Sohu Video is the designated or chosen platform to do that, because we are the #1 in this field. And also in Hanfu. And we are building verticals after verticals and become the best in the verticals, and that helps us to consolidate or attract our user base.

I see. Just a follow-up on that. Is there any revenue implication from these events that will contribute to the -- I mean, already second quarter or maybe it can carry forward to the third quarter, Yes.

Yes, the revenue of sponsorship for these events are unlike those physics class or other -- unlike those ones, this is a secondary or less -- I mean, it's not a priority, but we do get a sponsorship for the K-pop and for the Hanfu events. Yes, we really accept the top sponsor like the name sponsor. We refuse the name sponsor. I mean title sponsorship, right? Because our goal is to develop users and to market our brand, the product brand.

I'm showing no further questions. And with that, we conclude our conference call for today. Thank you for your participation. You may now disconnect your lines.