Ladies and gentlemen, thank you for standing by and good evening. Thank you for joining SOHU second quarter 2026 earnings conference call. At this time, all participants are in a 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 now 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.

Thanks, Jovita. Thank you for joining us to discuss SOHU's second quarter 2026 results. On the call are Chairman and Chief User Officer, Dr. Charles Zhang, CFO, John Lee, and Vice President of Finance, James Dunn. Also with us, Chang Youzhi, Dewen Chen, and C.F. Yubing Wang. Before my meeting begins, I would like to remind you of the coming TIABAR statements. Except for the historical information contained herein, the matters discussed on this call may contain forwarding statements. These statements are based on current plans as mentioned in the projections. Therefore, you should not place any rights on them. For looking statements involved in key risks and uncertainties, we caution you that a number of important factors could cause actual results different materially from those containing any forelooking statements. For more information about the potential risks and uncertainties, please refer to the committee's files with the Securities and Exchange Commission, including the most recent annual report on . With that, I will now turn the call over to Dr. Chaoyang Zhang.

Thanks, Huangfu, and thank you everyone for joining our call. In the second quarter of 2026, our marketing services revenues, online game revenues, and the bottom line performance all exceeded our previous guidance. For the social media platform, we continued to refine our products and host diverse events and activities to stimulate communication and interaction among users. which further strengthened the platform's social features and promoted its vigorous and healthy development. Leveraging our differentiated content and events, we were able to address advertisers' needs and continue to explore diversified monetization opportunities. For online games, we remain committed to our long-term Thank you very much. Thank you. Total revenue were $136 million up 7% year-over-year and down 4% quarter-over-quarter. Marketing services revenues were $15 million down 3% year-over-year and up 21% quarter-over-quarter. Online game revenues were $116 million up 10% year-over-year and down 7% quarter-over-quarter. After giving effect to reversal of a tax expense of approximately $13 million due to a reversal of uncertain tax positions previously, gap in net income attributable to Soho.com Limited was $200,000 compared with the net loss of $20 million in the second quarter of 2025 and a net loss of $4 million in the first quarter of 2026. Nungap, after giving effect to the above-mentioned reversal of tax expenses, Nungap net income attributable to Soho.com Limited was $500,000 income, compared with the net loss of $20 million in the second quarter of 2025, and the net loss of $4 million in the first quarter of 2026. Now I'll go through our key businesses in more detail. First, Soho Media Platform, or Soho Social Media Platform. This quarter, we continue to refine our products with upgraded technologies and enhanced user experience and engagement across different scenarios. Leveraging the synergy between various offline activities and our online communities, we boosted active user interactions as well as the generation and dissemination of premium content. These efforts enabled us to expand genuine social connections among users on our platform and foster a virtuous cycle to build a prosperous and healthy social ecosystem. During the quarter, in addition to the 2026 Spring Convention of Sohu Video Influencers , hosted in April where we created opportunities for broadcasters to interact and to establish in-person social connections across various vehicles verticals. We also continued with the signature event of 2026 Kick Off, the year annual K-pop dancing festival and also the 2026 Chinese costume Hanfu model competition. These competitions attracted thousands of young enthusiasts to actively participate, consolidating our appeal and competitiveness in these areas. Based on our long-term endeavor in the dance area, we further consolidated our influence by introducing a series of engaging activities on campus, enhancing our platform's coverage among young people. In addition, we hosted attractive and innovative activities in conjunction with popular events or topics across different verticals, such as the salute to the ultimate explorers, the outdoor vertical, and sports and other verticals, and World Cup-related activities, World Cup watching parties. As a result, a variety of online interest clubs were developing rapidly. These distinctive events and activities garnered significant attention and recognition and spread widely across multiple social platforms, bringing active interactions to our platform and contributing to its vigorous and high-quality development. In May, we successfully hosted our traditional event of 2026 SOFU Annual Science Technology Conference. We invited a host of leading scholars to engage in cross-sector high-end dialogues regarding the latest scientific trends and the developments attracting a large number of scientists and science enthusiasts to our platform. At the same time, we continue to strengthen our leading position in knowledge and science-related live broadcast class with our core IPs on myself, Charles' physics class, and we held live broadcasts related to the National College Entry Examination in Physics and provided relevant learning advice for our audiences. We also kept delivering public science popularization, devoting to narrowing the gap between the public and the cutting-edge science. This month, the English class, Charles' English class, celebrated It's 10th anniversary, 10 years, we've been doing this for 10 years, and has created, conducted for more than 2,000 live broadcasts, contributing, continuing to generate practical content and driving traffic to the platform. So relying on our unique IP product metrics and differentiated campaigns, we're able to tailor marketing solutions for advertisers and tap into more monetization potentials. For example, we organically combine the physics knowledge, physics and delivered in the physics class with industry practices, applications of the applied physics to help brand advertisers to showcase their technological strengths and advance and brand value. Next, turning to our online game businesses. During the quarter, our online game business performed well, with revenues exceeding our prior guidance. In our PC game business, we rolled out a series of crossover content with the renowned wuxia comic franchise storm writers Feng Yun for both regular TLBB PC and TLBB Vintage. We also introduced a new character development system for regular TLBB PC. In addition, we launched a new content and gameplay for TLBB, Return to Enrich the Player Experience. Turning to our mobile game business, we launched an expansion pack to celebrate the anniversary of Legacy TLBB Mobile. as well as certain in-game promotional events which drove an increase in player engagement. Revenue for this game remains stable on a sequential basis. Next quarter, we'll continue to launch expansion packs and content updates for the TLBB series and other titles to further enhance player engagement. Looking ahead, we'll remain committed to our top game strategy on the product development front will adhere to systematic R&D processes. Drive implementation of advanced technologies and enhance our research and development R&D capabilities through continuous experimentation and the validation. Striving to bring more high quality games to the players. Regarding to our pipeline, we seek to further unlock the potential of our TLVB IP. Meanwhile, as we maintain our competitive edge in the MMORPGs, we will continue to diversify our portfolio with multiple types of games and expand our product offerings with global appeal. Now, I'd like to provide an update on the ongoing share repurchase program. As of August 6, 2026, Sohu had repurchased 9.4 million ADS from aggregate cost approximately $124 million. Moreover, Sohu today announced that its board of directors authorized repurchases continue on an open-ended basis until the maximum authorized amount of $150 million is reached. With that, I'll now turn the call over to our CFO, Joanna. Please.

Thank you, Charles. I will now walk you through the key financials of our major segments for the second quarter of 2026. All numbers on a non-GAAP basis. You may find a reconciliation of non-GAAP to GAAP measures on our IR website. For social media platforms, quarterly revenues were $19 million, flat with the same quarter last year. Quarterly operating loss was $71 million, compared with an operating loss $69 million in the same quarter last year. For Changyou, quarterly revenues, $117 million, compared with $107 million in the same quarter last year. Quarterly operating profit was $56 million, compared with the operating profit $51 million in the same quarter last year. For third quarter of 2026, we expect marketing service revenues to be between $14 million and $15 million. This implies annual increase of 3% to 10% and a sequential decrease of 1% to 8%. Online gain revenues. to be between $105 million and $150 million. This implies an annual decrease of 29% to 35% and a sequential decrease of 1% to 10%. Both net gap and gap net loss attributable to SoCo.com Limited to be between $30 million and $23 million. This forecast reflects so-called 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 very much. Now we will conduct the Q&A session. Just a moment for our first question, please. First question comes from Thomas Chun from Jefferies. Please go ahead.

Hi, good evening, Charles, and management, and thanks for taking my question. My question is about the good result that we saw in Q2. I think last earnings call, Charles, you mentioned about the advertising sentiment is just so-so, not great. Is there any change in your view about the advertising outlook in the second half? I think that's number one. And then our follow-up question is more about the World Cup. I remember last time Charles talked about the World Cup should be a small event. I just want to see if there's any change in your view about the World Cup impact. That's number one. And then number two is about the recent trend in advertising sentiment in particular for different categories like auto, IT, FMCG. Can you provide some color about the second half outlook? And then secondly, I think on the gaming side, may I ask about the quarter-to-date performance so far for the TLBB series? Is it at the low end or the high end of the guidance quarter-to-date? Thank you.

Okay, your first part about the Sohu media or social media platform, the advertising, yeah, we actually beat the forecast. And the answer to your question is still similar to last time that the macroeconomic situation is still very bad, actually bad and sloppy. You know, advertisers kind of are now very cautious in spending. But because of our unique marketing offerings, so we were able to achieve actually some kind of growth compared with Q1. Well, Q1 is seasonality, but yes, we actually have some growth, you know, be the forecast because of our innovative marketing solution that we provided to our advertisers, especially combined our online social media platform and also offline activities with live streaming, with events. So now the marketing advertising side is very different from before, like a few years ago when Actually, advertisers tend to, especially brand advertisers, tend to spend less on the, you know, the standard advertising on, you know, on channels, on the traditional, in Chinese called Yingguang, Yingguang Toufang. They are all, you know, trying to create The maximum effect of viral distribution, I mean, or viral online through key influencers or KOLs to use the social networks. And our solution, our social platform, you know, just to provide, we are able to provide exactly that, that kind of marketing services. In terms of categories, so still the auto is 33% and FMCG 20%, IT 17%. And all three areas are, you know, not doing well. I mean, the macroeconomic situation, all spending less, I mean, so more cautious. So the World Cup actually, yes, there's not much impact in terms of the income, I mean, the advertising. But the World Cup, we did organize the activities of watching World Cup games and tournaments, which to promote or develop our, you know, to acquire users. It's more to the consumer side, I mean the user side.

Yeah, I hope I answered your question.

Gaming. Thomas, yeah.

Thomas, yeah. Thomas, yeah. Thomas, yeah. Thomas, yeah. From the past almost two months, the performance is largely in line with our expectation, but still we have more than one month time to go, and there are still some content and activities to be released. which are not very easy to forecast their performance. So eventually it will depend on the performance of these content and activities. Thank you. Thank you.

Got it. Thank you.

Thank you very much. Just a moment for our next question please. Next question comes from the lines of Alicia Yep from Citigroup. Please go ahead with your question.

Hi, good evening. Thank you for taking my questions. Good evening, Charles and management. I have two questions. First, I wanted to ask on the buyback. I think you mentioned the board amended the existing buyback program to be open ended rather than It was supposed to be expired, I think, in November. So just wanted to know what's the rationale behind. Does that mean that or does that imply or suggest that the remaining 26 million of the outstanding, it is highly chance that you might not finish by that November 30th so that you are making it open Open-ended so that you can continue to finish that 26 million before you announce a new plan. So any kind of like, you know, the reasons that you can share with us would be great. And then the second question is follow up on the online advertising guidance for the 3Q. I know maybe it's just from previously, you know, the base wasn't that high, but still, it is the first time for a long time that you are now expecting a positive growth on the year over year. I know you just mentioned, you know, the macro, the budget sentiments remain quite weak, but it does look like, I don't know whether the 3Q positive growth is the beginning of the positive growth trend after your ad revenue has been declining for such a long time. So maybe if you can also illustrate, despite it is weak macro, but is this 3Q guidance is the first sign of potentially the more positive year-over-year trend going forward? Thank you.

Okay, Alicia, so for your first question, you got it exactly right. Yes, because of the daily trading volume limitation, we could not finish the $150 million by November, so we extended the time to open the schedule so that we can finish that $150 million to finish the rest of the left $26 million left. and your second question, yes, basically, as I said earlier, that it's the macro still bad, sloppy, and people, you know, cautious in spending, but, I mean, macro economy, but the individual, but SOHO, we are actually achieving some kind of, in Chinese, called a nishi cheng chang, you know, we are kind of Because the base is small, so we are able to provide some unique marketing solutions so that advertisers buy in, you know, they like the kind of solution that we provide to them. And we're looking at, yes, we are looking at, for a long time, we were looking at some kind of growth for the first time in a long time.

I see. Okay, thanks Charles. Maybe lastly, if I can, I wanted to follow up on the gaming question. I think typically 1Q, 3Q should be a seasonally stronger quarter. So your 2Q, you came in, you beat your guidance, but yet your 3Q guidance on gaming seems to be implying sequential decline. Rather than seasonality-wise, it should be a sequential increase. So maybe if you can quantify it or give us some colors how you were seeing or how you're actually thinking about the seasonality versus your portfolio performance. Thank you.

Lisa wants to ask, usually she thinks that in the first or second quarter, the performance of the game will be stronger. In the second quarter, actually, the value we gave was also falling slowly, but it was actually more than that. So she wants to ask us to explain the trend of the season of the game. In the second quarter, the game is more than that. It's mainly the game of the dragon, The outperformance of the second quarter is mainly due to outperformance, better than expected performance of some of our older games, including TLB VPC, for which The expansion packs that we launched worked very well for our players. 这几个老游戏在第二季度都比预期做得好一些。 Several of our older games performed, all of them performed better than our expectations.

三季度我们的收入指引也是近于,因为二季度确实是做得比较好的。

So the performance of the second quarter is indeed quite well. So for the third quarter, we expect the older games to experience some natural decline. which is normal because they have been operated for a long time.

Okay, thank you so much.

Mainly because the better than expected performance of the older games in the second quarter. Thank you.

Thank you. If you wish to ask a question to the management, please press star 11. Thank you all for all the questions. This concludes the Q&A session as I see no further questions. This also concludes today's conference call. Thank you for participating. You may now disconnect. Thank you.