Limited (NASDAQ:CYOU) Q3 2019 Earnings Conference Call - Final Transcript

Nov 04, 2019 • 06:30 am ET

Previous Limited (NASDAQ:CYOU) Q3 2019 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by and good evening. Welcome to Changyou's Third Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the management's prepared remarks, there will be a question-and-answer session. Today's conference call is being recorded. If you have any objections, you may disconnect at this time.

I would like to turn the conference over to your host for today's call, Changyou's IR Head, Mr. Zhao Yujia. Please go ahead, Yujia.

Zhao Yujia

Thank you, operator and thanks everyone for joining us. On the call today are Mr. Chen Dewen, CEO; Mr. Hong Xiaojian, COO; Mr. Wang Yaobin, CFO; and Mr. Wei Qing, Chief Games Development Officer.

For today's agenda, management will discuss highlights for the third quarter 2019. This will be followed by a question-and-answer session.

Before we continue, please allow me to read you Changyou's Safe Harbor statements. Statements that are not historical facts, including statements about the company's beliefs and expectations 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 SEC, including its most recent Annual Report on Form 20-F.

I will now turn the call over to our CEO, Mr. Chen Dewen.

Dewen Chen

[Foreign Speech] For the third quarter of 2019, our total revenue was $111 million. Online games performed well with revenue reaching $108 million. Our non-GAAP net income was $34 million, which exceeded the high-end of our guidance.

[Foreign Speech] For PC games, we launched a new expansion pack for TLBB PC during the quarter to sustain user entries. In addition, we rolled out this year's second promotional event, which ranked and rewarded our highest paying users. We were happy to see that. It not only helped to sustain player engagement, but it also effectively stabilized the in-game spending of players. Overall, TLBB PC revenue in the third quarter was flat on a sequential basis.

[Foreign Speech] For the fourth quarter of 2019, we will launch another expansion pack for TLBB PC that features the addition of new plan. We will also further improve our payment system and launch new holiday events that are specifically designed to promote engagement among mid-tier paying players. Given the uncertainties due to the National Day holidays and fewer promotions during the fourth quarter, we expect TLBB PC revenue to decrease by about 7% on a sequential basis. We will continue to focus on our core strategy to maintain user-engagement and maximize the longevity of our legacy PC games such as TLBB.

[Foreign Speech] For mobile games, revenue from Legacy TLBB Mobile increased slightly in the third quarter on a sequential basis, which was actually better than we expected, many thanks