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Weibo Reports Second Quarter 2023 Unaudited Financial Results

Weibo Reports Second Quarter 2023 Unaudited Financial Results

BEIJING, Aug. 24, 2023 /PRNewswire/ -- Weibo Corporation ("Weibo" or the "Company") (NASDAQ: WB and HKEX: 9898), a leading social media in China, today announced its unaudited financial results for the second quarter ended June 30, 2023.

"We are pleased with the recovery of our business and improvement of our operating efficiency this quarter," said Gaofei Wang, CEO of Weibo. "During this quarter, our user community experienced continuous healthy growth, with ongoing execution of effective channel and operational strategies. For content ecosystem, on top of solid growth of traffic and content consumption around Weibo's advantageous areas, such as entertainment and hot trends, we also beefed up our investment in key vertical areas, in the hope of reinforcing our comprehensive content ecosystem. On monetization, our advertising business exhibited a steady recovery from the previous quarter, contributing to further improvement in our operating margin for the second quarter. In July 2023, we distributed special cash dividends of US$0.85 per ordinary share or ADS, totaling approximately US$200 million, reaffirming our commitment to returning value to our shareholders."

Second Quarter 2023 Highlights

  • Net revenues were US$440.2 million, a decrease of 2% year-over-year or an increase of 5% year-over-year on a constant currency basis[1].
  • Advertising and marketing revenues were US$385.7 million, flattish year-over-year or an increase of 7% year-over-year on a constant currency basis[1].
  • Value-added service ("VAS") revenues were US$54.6 million, a decrease of 16% year-over-year or a decrease of 10% year-over-year on a constant currency basis[1].
  • Income from operations was US$123.5 million, representing an operating margin of 28%.
  • Net income attributable to Weibo's shareholders was US$81.4 million and diluted net income per share was US$0.34.
  • Non-GAAP income from operations was US$153.8 million, representing a non-GAAP operating margin of 35%.
  • Non-GAAP net income attributable to Weibo's shareholders was US$126.4 million and non-GAAP diluted net income per share was US$0.53.
  • Monthly active users ("MAUs") were 599 million in June 2023, a net addition of approximately 17 million users on a year-over-year basis. Mobile MAUs represented 95% of MAUs.
  • Average daily active users ("DAUs") were 258 million in June 2023, a net addition of approximately 5 million users on a year-over-year basis.

[1] On a constant currency (non-GAAP) basis, we assume that the exchange rate in the second quarter of 2023 had been the same as it was in the second quarter of 2022, or RMB6.60=US$1.00.

Second Quarter 2023 Financial Results

For the second quarter of 2023, Weibo's total net revenues were US$440.2 million, a decrease of 2% compared to US$450.2 million for the same period last year.

Advertising and marketing revenues for the second quarter of 2023 were US$385.7 million, flattish compared to US$385.6 million for the same period last year. Advertising and marketing revenues excluding ad revenues from Alibaba were US$358.9 million, a decrease of 1% compared to US$361.8 million for the same period last year.

VAS revenues for the second quarter of 2023 were US$54.6 million, a decrease of 16% year-over-year compared to US$64.6 million for the same period last year. The decrease of VAS revenues was mainly due to the recognition of one-time technical service fee in the same period last year and less revenue contribution from membership service.

Costs and expenses for the second quarter of 2023 totaled US$316.8 million, a decrease of 11% compared to US$356.2 million for the same period last year.

Income from operations for the second quarter of 2023 was US$123.5 million, compared to US$93.9 million for the same period last year. Operating margin was 28%, compared to 21% last year. Non-GAAP income from operations was US$153.8 million, compared to US$145.3 million for the same period last year. Non-GAAP operating margin was 35%, compared to 32% last year.

Non-operating loss for the second quarter of 2023 was US$13.8 million, compared to a loss of US$47.4 million for the same period last year. Non-operating loss for the second quarter of 2023 mainly included a US$16.9 million net loss from fair value change of investments, primarily resulted from fair value change of investment in Didi Global Inc. (OTC Pink: DIDIY), which was excluded under non-GAAP measures. 

Income tax expenses were US$25.5 million, compared to US$17.5 million for the same period last year.

Net income attributable to Weibo's shareholders for the second quarter of 2023 was US$81.4 million, compared to US$28.3 million for the same period last year. Diluted net income per share attributable to Weibo's shareholders for the second quarter of 2023 was US$0.34, compared to US$0.12 for the same period last year. Non-GAAP net income attributable to Weibo's shareholders for the second quarter of 2023 was US$126.4 million, compared to US$109.7 million for the same period last year. Non-GAAP diluted net income per share attributable to Weibo's shareholders for the second quarter of 2023 was US$0.53, compared to US$0.46 for the same period last year.

As of June 30, 2023, Weibo's cash, cash equivalents and short-term investments totaled US$2.8 billion. For the second quarter of 2023, cash provided by operating activities was US$142.5 million, capital expenditures totaled US$3.3 million, and depreciation and amortization expenses amounted to US$14.5 million.

Board Change

The Company announced that Mr. Bo Liu has been appointed as a director to the Board of Directors of the Company (the "Board") and Mr. Pen Hung Tung has resigned from the Board, effective as of August 23, 2023.

Mr. Liu is currently the President of Alibaba's Taobao and Tmall Group, Alimama, and Xianyu. He was appointed as the Vice President of Alibaba Group in March 2020. He joined Alibaba in 2005 and held various positions, including the President of Taobao University, General Manager of Juhuasuan, and General Manager of Tmall's Operations Division. Mr. Liu received his bachelor's degree in Aviation Mechanical Design from Zhengzhou University of Aeronautics and held an EMBA degree in Business Administration from the Chinese University of Hong Kong.

The Company would like to thank Mr. Pen Hung Tung for his dedicated service to the Board and contributions to the Company. At the same time, the Company would like to welcome Mr. Bo Liu to the Board and believes that Mr. Liu's perspectives and experiences will provide valuable guidance to the Company's development.

Conference Call

Weibo's management team will host a conference call from 7:00 AM to 8:00 AM Eastern Time on August 24, 2023 (or 7:00 PM8:00 PM Beijing Time on August 24, 2023) to present an overview of the Company's financial performance and business operations.

Participants who wish to dial in to the teleconference must register through the below public participant link. Dial in and instruction will be in the confirmation email upon registering.

Participants Registration Link: https://register.vevent.com/register/BI59522cdba0784489bd072fa4fb46c60e 

Additionally, a live and archived webcast of this conference call will be available at https://ir.weibo.com

Non-GAAP Financial Measures

This release contains the following non-GAAP financial measures: non-GAAP income from operations, non-GAAP net income attributable to Weibo's shareholders, non-GAAP diluted net income per share attributable to Weibo's shareholders and adjusted EBITDA. These non-GAAP financial measures should be considered in addition to, not as a substitute for, measures of the Company's financial performance prepared in accordance with U.S. GAAP.

The Company's non-GAAP financial measures exclude stock-based compensation, amortization of intangible assets resulting from business acquisitions, non-cash compensation cost to non-controlling interest shareholders, impairment of intangible assets, net results of impairment and provision on investments, gain/loss on sale of investments and fair value change of investments, non-GAAP to GAAP reconciling items on the share of equity method investments, non-GAAP to GAAP reconciling items for the income/loss attributable to non-controlling interests, income tax expense related to the amortization of intangible assets resulting from business acquisitions and fair value change of investments (other non-GAAP to GAAP reconciling items have no tax effect), and amortization of issuance cost of convertible debt, senior notes and long-term loans. Adjusted EBITDA excludes interest income, net, income tax benefits/expenses, and depreciation expenses.

The Company's management uses these non-GAAP financial measures in their financial and operating decision-making, because management believes these measures reflect the Company's ongoing operating performance in a manner that allows more meaningful period-to-period comparisons. The Company believes that these non-GAAP financial measures provide useful information to investors and others in the following ways: (i) in comparing the Company's current financial results with the Company's past financial results in a consistent manner, and (ii) in understanding and evaluating the Company's current operating performance and future prospects in the same manner as management does. The Company also believes that the non-GAAP financial measures provide useful information to both management and investors by excluding certain expenses, gains/losses and other items (i) that are not expected to result in future cash payments or (ii) that are non-recurring in nature or may not be indicative of the Company's core operating results and business outlook.

Use of non-GAAP financial measures has limitations. The Company's non-GAAP financial measures do not include all income and expense items that affect the Company's operations. They may not be comparable to non-GAAP financial measures used by other companies. Accordingly, care should be exercised in understanding how the Company defines its non-GAAP financial measures. Reconciliations of the Company's non-GAAP financial measures to the nearest comparable GAAP measures are set forth in the section below titled "Unaudited Reconciliation of Non-GAAP to GAAP Results."

About Weibo

Weibo is a leading social media for people to create, share and discover content online. Weibo combines the means of public self-expression in real time with a powerful platform for social interaction, content aggregation and content distribution. Any user can create and post a feed and attach multi-media and long-form content. User relationships on Weibo may be asymmetric; any user can follow any other user and add comments to a feed while reposting. This simple, asymmetric and distributed nature of Weibo allows an original feed to become a live viral conversation stream.

Weibo enables its advertising and marketing customers to promote their brands, products and services to users. Weibo offers a wide range of advertising and marketing solutions to companies of all sizes. The Company generates a substantial majority of its revenues from the sale of advertising and marketing services, including the sale of social display advertisement and promoted marketing offerings. Designed with a "mobile first" philosophy, Weibo displays content in a simple information feed format and offers native advertisement that conform to the information feed on our platform. To support the mobile format, we have developed and continuously refining our social interest graph recommendation engine, which enables our customers to perform people marketing and target audiences based on user demographics, social relationships, interests and behaviors, to achieve greater relevance, engagement and marketing effectiveness.

Safe Harbor Statement

This press release contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology, such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "confidence," "estimates" and similar statements. Among other things, Weibo's expected financial performance and strategic and operational plans, as described, without limitation, in quotations from management in this press release, contain forward-looking statements. Weibo may also make written or oral forward-looking statements in the Company's periodic reports to the U.S. Securities and Exchange Commission ("SEC"), in announcements, circulars or other publications made on the website of The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange"), in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, Weibo's limited operating history in certain new businesses; failure to grow active user base and the level of user engagement; the uncertain regulatory landscape in China; fluctuations in the Company's quarterly operating results; the Company's reliance on advertising and marketing sales for a majority of its revenues; failure to successfully develop, introduce, drive adoption of or monetize new features and products; failure to compete effectively for advertising and marketing spending; failure to successfully integrate acquired businesses; risks associated with the Company's investments, including equity pick-up and impairment; failure to compete successfully against new entrants and established industry competitors; changes in the macro-economic environment, including the depreciation of the Renminbi; and adverse changes in economic and political policies of the PRC government and its impact on the Chinese economy. Further information regarding these and other risks is included in Weibo's annual report on Form 20-Fs and other filings with the SEC and the Hong Kong Stock Exchange. All information provided in this press release is current as of the date hereof, and Weibo assumes no obligation to update such information, except as required under applicable law.

Contact:

Investor Relations
Weibo Corporation
Phone: +86 10 5898-3336
Email: ir@staff.weibo.com

WEIBO CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands of U.S. dollars, except per share data)

























Three months ended


Six months ended



June 30,


March 31,


June 30,


June 30,


June 30,



2022


2023


2023


2022


2023

Net revenues:










     Advertising and marketing

$  385,559


$  355,300


$  385,674


$  812,680


$  740,974

     Value-added services

64,593


58,478


54,566


122,094


113,044


Net revenues

450,152


413,778


440,240


934,774


854,018












Costs and expenses:










     Cost of revenues (1)

95,314


85,853


94,272


200,115


180,125

     Sales and marketing (1)

115,512


106,494


105,425


240,823


211,919

     Product development (1)

106,403


90,676


92,945


218,837


183,621

     General and administrative (1)

28,809


34,265


24,145


68,036


58,410

     Impairment of intangible assets 

10,176


-


-


10,176


-


Total costs and expenses

356,214


317,288


316,787


737,987


634,075

Income from operations

93,938


96,490


123,453


196,787


219,943












Non-operating income (loss):










     Investment related gain (loss), net

(25,676)


27,155


(25,190)


(203,626)


1,965

     Interest and other income (loss), net

(21,721)


2,682


11,357


(7,305)


14,039



(47,397)


29,837


(13,833)


(210,931)


16,004












Income (loss) before income tax expenses

46,541


126,327


109,620


(14,144)


235,947

                Less: Income tax expenses

17,502


21,852


25,450


29,218


47,302












Net income (loss)

29,039


104,475


84,170


(43,362)


188,645

                Less: Net income (loss) attributable to non-
                controlling interests

739


556


257


(4,138)


813

                Accretion to redeemable non-controlling
                interests

-


3,427


2,526


-


5,953

Net income (loss) attributable to Weibo's shareholders

$     28,300


$  100,492


$     81,387


$   (39,224)


$  181,879























Basic net income (loss) per share attributable to Weibo's
  shareholders

$         0.12


$         0.43


$         0.35


$        (0.17)


$         0.77

Diluted net income (loss) per share attributable to Weibo's 
  shareholders

$         0.12


$         0.42


$         0.34


$        (0.17)


$         0.77












Shares used in computing basic net income (loss) per share










   attributable to Weibo's shareholders

235,521


234,705


235,361


235,364


235,035

Shares used in computing diluted net income (loss) per share










   attributable to Weibo's shareholders

237,025


236,895


237,886


235,364


237,393












(1) Stock-based compensation in each category:











Cost of revenues

$         2,716


$         2,536


$         2,238


$         5,053


$         4,774


Sales and marketing

5,502


4,613


4,113


10,117


8,726


Product development

16,760


13,800


13,256


30,096


27,056


General and administrative

6,483


6,676


6,460


13,246


13,136

 

 

WEIBO CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands of U.S. dollars)














December 31,


June 30,






2022


2023









Assets


Current assets:








Cash and cash equivalents


$     2,690,768


$     2,360,744




Short-term investments


480,428


468,735




Accounts receivable, net


502,443


446,654




Prepaid expenses and other current assets


391,502


406,257




Amount due from SINA(1)


487,117


492,530




      Current assets subtotal


4,552,258


4,174,920










Property and equipment, net


249,553


222,612


Goodwill and intangible assets, net


245,223


224,202


Long-term investments


993,630


1,309,217


Other non-current assets


1,088,790


947,982


Total assets


$     7,129,454


$     6,878,933









Liabilities, Redeemable Non-controlling Interests and Shareholders' Equity 


Liabilities:







Current liabilities:








Accounts payable


$        161,029


$        156,383




Accrued expenses and other current liabilities

923,678


675,959




Income tax payable


55,282


53,254




Deferred revenues


79,949


85,571




Dividends payable


-


200,136




     Current liabilities subtotal


1,219,938


1,171,303











Long-term liabilities:








Unsecured senior notes


1,540,717


1,541,868




Long-term loans


880,855


882,916




Other long-term liabilities


97,404


89,212




     Total liabilities


3,738,914


3,685,299










Redeemable non-controlling interests


45,795


54,875










Shareholders' equity:







Weibo shareholders' equity 


3,330,250


3,124,261



Non-controlling interests


14,495


14,498




Total shareholders' equity 


3,344,745


3,138,759


Total liabilities, redeemable non-controlling interests and
    shareholders' equity


$     7,129,454


$     6,878,933


















(1) Included short-term loans to and interest receivable from SINA of US$420.4 million as of
December 31, 2022 and US$436.0 million as of June 30, 2023.

 

 

WEIBO CORPORATION

UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS

(In thousands of U.S. dollars, except per share data)





















Three months ended


Six months ended




June 30,


March 31,


June 30,


June 30,


June 30,




2022


2023


2023


2022


2023


















Income from operations

$

93,938


$

96,490


$

123,453


$

196,787


$

219,943

  Add:

Stock-based compensation


31,461



27,625



26,067



58,512



53,692


Amortization of intangible assets resulting from business acquisitions


4,895



4,439



4,271



10,646



8,710


Accrual of non-cash compensation cost to non-controlling 
  interest shareholders


4,824



-



-



10,898



-


Impairment of intangible assets


10,176



-



-



10,176



-

Non-GAAP income from operations

$

145,294


$

128,554


$

153,791


$

287,019


$

282,345


















Net income (loss) attributable to Weibo's shareholders

$

28,300


$

100,492


$

81,387


$

(39,224)


$

181,879

  Add:

Stock-based compensation


31,461



27,625



26,067



58,512



53,692


Amortization of intangible assets resulting from business
  acquisitions


4,895



4,439



4,271



10,646



8,710


Accrual of non-cash compensation cost to non-controlling 
  interest shareholders


4,824



-



-



10,898



-


Impairment of intangible assets


10,176



-



-



10,176



-


Investment related gain/loss, net (1)


25,676



(27,155)



25,190



203,626



(1,965)


Non-GAAP to GAAP reconciling items on the share of equity
  method investments 


8,571



4,183



(11,262)



5,917



(7,079)


Non-GAAP to GAAP reconciling items for the income/loss
  attributable to non-controlling interests


(278)



(157)



(156)



(4,909)



(313)


Tax effects on non-GAAP adjustments (2)


(5,541)



196



(727)



(16,312)



(531)


Amortization of  issuance cost of convertible debt, unsecured
  senior notes and long-term loans


1,611



1,606



1,606



3,222



3,212

Non-GAAP net income attributable to Weibo's shareholders

$

109,695


$

111,229


$

126,376


$

242,552


$

237,605


















Non-GAAP diluted net income per share attributable to Weibo's
  shareholders

$

0.46

*

$

0.47


$

0.53


$

1.02

*

$

1.00


















Shares used in computing GAAP diluted net income (loss) per share
  attributable to Weibo's shareholders


237,025



236,895



237,886



235,364



237,393

  Add:

The number of shares for dilution resulted from convertible debt (3)


6,753



-



-



6,753



-


The number of shares for dilution resulted from unvested restricted
  share units (3)


-



-



-



976



-

Shares used in computing non-GAAP diluted net income per share
  attributable to Weibo's shareholders


243,778



236,895



237,886



243,093



237,393


















Adjusted EBITDA:
















Net income (loss) attributable to Weibo's shareholders

$

28,300


$

100,492


$

81,387


$

(39,224)


$

181,879


Non-GAAP adjustments


81,395



10,737



44,989



281,776



55,726


Non-GAAP net income attributable to Weibo's shareholders


109,695



111,229



126,376



242,552



237,605



Interest (income) expense, net


(8,443)



(9,743)



1,366



(19,429)



(8,377)



Income tax expenses


23,043



21,657



26,177



45,530



47,834



Depreciation expenses


8,616



10,601



9,962



17,346



20,563


Adjusted EBITDA

$

132,911


$

133,744


$

163,881


$

285,999


$

297,625


















(1)

To adjust impairment and provision on investments, gain/loss on sale of investments and fair value change of investments.
























(2)

To adjust the income tax effects of non-GAAP adjustments, which primarily related to amortization and impairment of intangible assets resulting from business
acquisitions and fair value change of investments. Other non-GAAP adjustment items have no tax effect, because (i) they were recorded in entities established in
tax free jurisdictions, or (ii) full valuation allowances were provided for related deferred tax assets as it is more-likely-than-not they will not be realized.


















(3)

To adjust the number of shares for dilution resulted from convertible debt and unvested restricted share units which were anti-dilutive under GAAP measures.


















Net income attributable to Weibo's shareholders is adjusted for interest expense of convertible debt for calculating diluted EPS.





 

 

WEIBO CORPORATION

UNAUDITED ADDITIONAL INFORMATION

(In thousands of U.S. dollars)














Three months ended


Six months ended



June 30,


March 31,


June 30,


June 30,


June 30,



2022


2023


2023


2022


2023












Net revenues











Advertising and marketing











     Non-Ali advertisers

$      361,831


$      337,031


$      358,894


$      763,027


$      695,925


     Alibaba - as an advertiser

23,728


18,269


26,780


49,653


45,049


         Subtotal

385,559


355,300


385,674


812,680


740,974













Value-added services

64,593


58,478


54,566


122,094


113,044



$      450,152


$      413,778


$      440,240


$      934,774


$      854,018

 

 

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