Investment Rating - The report maintains a "Buy" rating for the company [1][4] Core Views - The company's revenue in Q1 2024 decreased by 4% year-on-year, primarily due to exchange rate impacts, while operating profit margin improved slightly [4] - The company plans to strengthen its hot marketing model to attract high ARPU (Average Revenue Per User) customers [4] - The forecast for non-GAAP net profit for 2024, 2025, and 2026 is $437 million, $482 million, and $511 million respectively, with corresponding PE ratios of 5.2, 4.8, and 4.5 [4][5] Financial Performance Summary - Q1 2024 net revenue was $396 million, down 4% year-on-year, while operating profit was $99.74 million, up 3.4% year-on-year [4][6] - Non-GAAP gross margin for Q1 2024 was 78.5%, a decrease of 1.4 percentage points year-on-year [6] - The company had cash and cash equivalents totaling $3.3 billion as of March 31, 2024 [4] Revenue Breakdown - Advertising revenue in Q1 2024 was $339 million, down 5% year-on-year, while value-added service revenue was $56.55 million, down 3% [4][6] - The company aims to focus on IP hotspots and customer hotspots to enhance its advertising business competitiveness [4] Future Outlook - The company expects advertising revenue growth to accelerate in the second half of 2024, driven by events like the Summer Olympics and summer entertainment hotspots [4] - The overall cost and expense levels are expected to remain stable year-on-year [4]

Investment Rating - The report maintains a "Buy" rating for the company, indicating a potential upside of 93.8% from the current price of $8.77 to a target price of $17.00 [2][3]. Core Insights - The company's total revenue for Q1 2024 decreased by 4% year-over-year to $395 million, aligning with consensus estimates. Non-GAAP net income also fell by 4% to $107 million, exceeding consensus estimates by 24% [2]. - Advertising revenue showed a mixed performance, with a 5% decline year-over-year to $339 million, primarily due to pressure in the cosmetics and beauty verticals. However, domestic beauty brands saw over 50% growth in advertising revenue [2][3]. - The company has adjusted its revenue forecasts for FY24-26 down by 2% to reflect the shrinking advertising budgets of cosmetics and beauty brands [2][3]. Revenue and Profitability Summary - FY22A revenue was $1,836 million, FY23A was $1,760 million, and FY24E is projected at $1,724 million, with a slight recovery expected in FY25E and FY26E [3][10]. - Adjusted net profit for FY22A was $540.1 million, FY23A was $450.6 million, and FY24E is expected to be $447.4 million, indicating a decline in profitability [3][10]. - The report highlights a non-GAAP operating profit margin (OPM) of 31.8% for Q1 2024, an increase of 0.7 percentage points year-over-year, attributed to strict control over operating costs [2][3]. User Engagement Metrics - Monthly Active Users (MAU) decreased by 1% year-over-year to 588 million, while Daily Active Users (DAU) remained stable at 255 million. The company is focusing on acquiring high-quality users [2][3]. - The report indicates that the company is investing in key content verticals such as automotive, online gaming, and healthcare to enhance user interaction and verified account growth [2][3]. Financial Position - As of March 31, 2024, the company had cash and cash equivalents of $2.1 billion, sufficient to cover upcoming debt obligations and shareholder return plans [2][3]. - The report notes a projected decline in non-GAAP OPM to 32.9% for FY24E, reflecting ongoing operational challenges [2][3].

Investment Rating - The report maintains a "BUY" rating for Weibo, indicating a potential return of over 15% over the next 12 months [2][12]. Core Insights - Weibo's total revenue for 1Q24 decreased by 4% YoY to US$395 million, with non-GAAP net income down by 4% YoY to US$107 million, but ahead of consensus estimates due to better control of operating expenses [2][3]. - Advertising revenue is expected to remain flat YoY in 2Q24, primarily due to a decline in the cosmetics and beauty vertical, although management anticipates a recovery in the ad business in 2H24, supported by improved consumer sentiment and the upcoming Olympic event [2][3]. - The target price has been lowered to US$17.00 from US$18.80, reflecting a discount to peers' average valuation [2][3]. Revenue and Profitability - Total revenue forecasts for FY24-26 have been reduced by 2%, mainly due to shrinking ad budgets from cosmetics and beauty brands [2][3]. - The adjusted net profit for FY24E is projected at US$447 million, with a slight decline of 0.7% YoY, while FY25E and FY26E are expected to grow by 10.1% and 5.7% respectively [3][6]. - Non-GAAP operating profit margin improved to 31.8% in 1Q24, attributed to a 10% YoY reduction in total operating expenses [2][3]. Advertising Revenue Performance - Advertising revenue declined by 5% YoY to US$339 million in 1Q24, with the cosmetics and beauty vertical being the primary contributor to this decline [2][3]. - Despite the challenges in the cosmetics sector, domestic beauty brands saw over 50% growth in ad revenue in 1Q24, while other verticals like online games and 3C products experienced double-digit growth [2][3]. User Metrics and Strategy - Monthly Active Users (MAUs) decreased by 1% YoY to 588 million, while Daily Active Users (DAUs) remained flat at 255 million [2][3]. - The company is focusing on acquiring high-quality users through optimized channel investments, which is expected to increase the percentage of high-ARPU users [2][3]. Financial Position - As of March 31, Weibo had cash and cash equivalents of US$2.1 billion, sufficient to cover upcoming senior notes due in July 2024 and shareholder return initiatives [2][3]. - The company is expected to maintain a relatively stable cash position, with projected cash at the end of FY24E at US$2.6 billion [10].

Financial Data and Key Metrics Changes - Weibo's total revenues for Q1 2024 reached $395.5 million, a decrease of 4% year-over-year, or flat on a constant currency basis [7][29] - Total advertising revenues were $339 million, reflecting a decrease of 5% year-over-year, also flat on a constant currency basis [30] - Non-GAAP operating income was $125.8 million, representing a non-GAAP operating margin of 32%, a modest increase year-over-year [7][29] - Net income attributable to Weibo was $106.6 million, with a net margin of 27%, flat compared to the same period last year [29][33] Business Line Data and Key Metrics Changes - Mobile ad revenue accounted for approximately 95% of total ad revenue, amounting to $322.5 million [30] - The online game sector showed strong momentum with double-digit growth, benefiting from game license approvals and ad budgets for new titles [30][31] - The VAS (Value-Added Services) revenue was $56.5 million, a decrease of 3% year-over-year, but an increase of 1% on a constant currency basis [32] Market Data and Key Metrics Changes - The handset online game industry sustained double-digit growth year-over-year, while the cosmetic and beauty sector continued to decline year-over-year [23][24] - Ad revenues from domestic beauty brands grew over 50% year-over-year, although this growth did not fully offset the decline from international brands [24] - The food and beverage and apparel sectors returned to positive growth, while the FMCG category continued to face challenges [31][32] Company Strategy and Development Direction - Weibo's strategic objectives for 2024 include growing user scale and engagement, enhancing content ecosystem competitiveness, and improving operating efficiency [8][28] - The company is focusing on high-quality user acquisition and engagement, optimizing channel collaboration, and enhancing social and hot-trend products [9][10] - Weibo aims to strengthen its monetization capabilities by leveraging its strengths in hot-trends and IPs, while also driving vertical content ecosystems [19][20] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the recovery of advertiser sentiment in Q2 and the second half of the year, with expectations for improved performance in various sectors [36][39] - The company noted that while the cosmetic and beauty sector faced challenges, there was a positive trend in domestic brands, and they plan to strengthen cooperation with e-commerce platforms [24][25] - Management highlighted the importance of focusing on high ARPU users and enhancing user engagement to drive overall performance [55][59] Other Important Information - Weibo completed the distribution of a special dividend of $0.82 per ordinary share, totaling approximately $200 million [33] - The company released its third ESG report, detailing initiatives in areas such as cybersecurity, content quality, and social responsibility [34][35] Q&A Session Summary Question: Outlook for advertisement business in Q2 and second half - Management expects a cautious recovery in advertiser sentiment, with positive trends noted in various industries except for cosmetics [36][37] - Focus will be on effective-based advertising and leveraging hot topics and IPs for marketing campaigns [39][40] Question: User base adjustments and forecasts - Management confirmed a focus on acquiring high-quality users with higher ARPU, expecting stable or slight increases in DAU [52][55] - The strategy includes prioritizing user engagement and content generation capabilities to enhance overall performance [57][59]

Core Insights - Weibo Corporation reported revenue of $395.5 million for Q1 2024, a year-over-year decline of 4.4% and an EPS of $0.41 compared to $0.47 a year ago [1] - The revenue fell short of the Zacks Consensus Estimate of $396.5 million, resulting in a surprise of -0.25%, while the EPS exceeded the consensus estimate of $0.40 by 2.50% [1] Performance Metrics - Average daily active users (DAUs) were reported at 255 million, below the estimated 262.37 million [2] - Monthly active users (MAUs) stood at 588 million, compared to the estimated 609.59 million [2] - Net revenues from value-added services were $56.55 million, slightly above the estimated $53.89 million, but a decline of 3.3% year-over-year [2] - Net revenues from advertising and marketing were $338.95 million, below the estimated $342.19 million, reflecting a year-over-year decline of 4.6% [2] Stock Performance - Weibo shares have returned +4% over the past month, while the Zacks S&P 500 composite increased by +6.1% [2] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [2]

Core Viewpoint - Weibo Corporation reported a solid start to 2024, focusing on user acquisition, content optimization, and improved monetization strategies, while aiming to enhance shareholder returns [1] Financial Performance - Net revenues for Q1 2024 were US$395.5 million, a decrease of 4% year-over-year, or flat on a constant currency basis [2][4] - Advertising and marketing revenues were US$339.0 million, down 5% year-over-year, or flat on a constant currency basis [2][4] - Value-added services (VAS) revenues were US$56.5 million, a decrease of 3% year-over-year, but an increase of 1% on a constant currency basis [2][4] - Income from operations was US$99.7 million, with an operating margin of 25%, compared to 23% in the previous year [5] - Net income attributable to Weibo's shareholders was US$49.4 million, with diluted net income per share of US$0.19 [7] - Non-GAAP income from operations was US$125.8 million, representing a non-GAAP operating margin of 32% [5][7] User Engagement - Monthly active users (MAUs) reached 588 million in March 2024, while average daily active users (DAUs) were 255 million [2] Cost Management - Total costs and expenses for Q1 2024 were US$295.8 million, a decrease of 7% compared to US$317.3 million in the same period last year [5] - The decrease in costs was attributed to lower personnel-related costs and marketing expenses [5] Non-Operating Results - Non-operating loss for Q1 2024 was US$23.6 million, compared to non-operating income of US$29.8 million in the same period last year [6] - The non-operating loss included net interest and other losses of US$18.6 million and a loss from fair value change of investments of US$3.6 million [6] Cash Position - As of March 31, 2024, Weibo's cash, cash equivalents, and short-term investments totaled US$3.3 billion [7]

Financial Performance - For Q1 2024, Weibo reported net revenue of $395.5 million, a decrease of 4% year-over-year[4]. - Total net revenue for the three months ended March 31, 2024, was $395,497, a decrease of 14.7% from $463,667 for the same period in 2023[13]. - Advertising and marketing revenue was $339.0 million, down 5% year-over-year, primarily due to unfavorable currency effects[5]. - Advertising and marketing revenue for the same period was $338,951, down 16.0% from $403,739 in the previous year[13]. - Operating profit for Q1 2024 was $99.7 million, with an operating margin of 25%, up from 23% in the same quarter last year[5]. - Operating profit for the three months ended March 31, 2024, was $99,737, compared to $119,005 for the same period in 2023, reflecting a decrease of 16.1%[13]. - Net profit attributable to Weibo shareholders was $49.4 million, translating to diluted earnings per share of $0.19, down from $0.42 year-over-year[5]. - Net profit attributable to Weibo shareholders for the three months ended March 31, 2024, was $49,438, a significant decrease of 50.7% from $100,492 in the previous year[13]. - Non-GAAP net profit attributable to Weibo shareholders was $106.6 million, with non-GAAP diluted earnings per share of $0.41, compared to $0.47 in the prior year[5]. - Non-GAAP diluted earnings per share attributable to Weibo shareholders was $0.31 for the three months ended March 31, 2024, compared to $0.47 for the same period in 2023[17]. - For the three months ended March 31, 2024, the diluted earnings per share attributable to Weibo shareholders was $0.21, a decrease from $0.35 for the same period in 2023[14]. Costs and Expenses - Cost and expenses totaled $295.8 million, a decrease of 7% year-over-year, mainly due to reduced personnel and marketing costs[5]. - The company reported a total cost and expenses of $295,760 for the three months ended March 31, 2024, down from $344,662 in the same period of 2023, representing a decrease of 14.2%[13]. - The adjusted EBITDA for the three months ended March 31, 2024, was not explicitly stated but is derived from the net profit before interest, taxes, depreciation, and amortization[13]. - The adjusted EBITDA for the three months ended March 31, 2024, was $133.0 million, compared to $158.2 million for the previous quarter[19]. - The company reported a non-GAAP operating profit margin of 32% for the three months ended March 31, 2024, up from 31% in the previous quarter[19]. User Engagement - Monthly active users reached 588 million in March 2024, while daily active users averaged 255 million[4]. - Weibo's user engagement and active user growth remain critical for future revenue performance, with ongoing efforts to expand its user base[12]. - The company is actively developing new features and products to enhance user experience and drive monetization[12]. Financial Position - Total cash, cash equivalents, and short-term investments amounted to $3.3 billion as of March 31, 2024[6]. - The total assets as of March 31, 2024, were $7.28 billion, slightly down from $7.28 billion as of December 31, 2023[15]. - The total liabilities increased to $3.98 billion as of March 31, 2024, from $3.76 billion as of December 31, 2023[16]. - Cash and cash equivalents decreased to $2.14 billion as of March 31, 2024, from $2.58 billion as of December 31, 2023[15]. - The number of shares used to calculate diluted earnings per share increased to 263.6 million for the three months ended March 31, 2024, from 246.4 million for the same period in 2023[19]. Strategic Focus - The company aims to enhance platform value and improve shareholder returns moving forward[3]. - The company continues to focus on enhancing its advertising and marketing solutions to improve revenue generation[10]. - Weibo acknowledges potential risks including regulatory uncertainties and competition in the advertising market that may impact future performance[12].

Corporate Governance - Weibo Corporation held its 2024 annual general meeting of shareholders where several resolutions were adopted, including the re-election of Mr. Charles Chao, Mr. Pochin Christopher Lu, and Mr. Gaofei Wang as directors of the Company [1] Company Overview - Weibo is a leading social media platform in China that allows users to create, share, and discover content online, combining public self-expression with social interaction and content distribution [2] - The platform enables users to post feeds with multimedia and long-form content, allowing for asymmetric user relationships where any user can follow others and engage with their content [2] Advertising and Marketing - Weibo generates a substantial majority of its revenue from advertising and marketing services, offering a variety of solutions for companies of all sizes [3] - The platform features social display advertisements and promoted marketing offerings, utilizing a recommendation engine to enhance audience targeting based on demographics, social relationships, interests, and behaviors [3]

Group 1 - Weibo Corporation will announce its unaudited financial results for Q1 2024 on May 23, 2024, before the U.S. market opens [1] - Following the financial results announcement, Weibo's management will host a conference call to discuss the company's financial performance and business operations [1] - A live and archived webcast of the conference call will be available on Weibo's investor relations website [1] Group 2 - Weibo is a leading social media platform that allows users to create, share, and discover content in real time [2] - The platform supports asymmetric user relationships, enabling any user to follow others, comment, and repost content, fostering viral conversations [2] - Weibo generates most of its revenue from advertising and marketing services, including social display advertisements and promoted marketing offerings [3] Group 3 - Weibo employs a "mobile first" approach, displaying content in a simple information feed format and offering native advertisements that align with this format [3] - The company has developed a social interest graph recommendation engine to enhance marketing effectiveness by targeting audiences based on demographics, social relationships, interests, and behaviors [3]

Financial Performance - Weibo Corporation reported its annual performance for the fiscal year ending December 31, 2023, with a comprehensive financial statement available for shareholders[3]. - Total revenue for the year ended December 31, 2023, was $1,759.836 million, a decrease from $1,836.332 million in 2022, representing a decline of approximately 4.2%[55]. - Net profit attributable to Weibo shareholders for the year ended December 31, 2023, was $342.598 million, compared to $85.555 million in 2022, indicating a significant increase of approximately 300%[56]. - Third-party revenue for the year ended December 31, 2023, was $1,531.675 million, down from $1,540.585 million in 2022, reflecting a decrease of about 0.9%[55]. - The total cost and expenses for the year ended December 31, 2023, amounted to $1,286.902 million, slightly lower than $1,355.864 million in 2022, showing a reduction of approximately 5.1%[55]. - The company reported a profit before income tax expense of $502.782 million for the year ended December 31, 2023, compared to a profit of $128.086 million in 2022, marking an increase of approximately 292%[56]. - The company’s share of profits from subsidiaries for the year ended December 31, 2023, was $529.304 million, up from $305.672 million in 2022, representing an increase of approximately 73.5%[56]. - The effective tax rate for the company was impacted by a 10% withholding tax on dividends distributed to foreign holding companies, which may affect future cash flows[55]. - The company’s operating expenses decreased by approximately 5.1% year-over-year, indicating improved cost management strategies[55]. User Engagement and Growth - The company reported a significant increase in daily active users, reaching an average of 250 million, representing a 10% year-over-year growth[16]. - Monthly active users also saw an increase, totaling 550 million, which is a 5% increase compared to the previous year[17]. - User engagement metrics improved, with a 20% increase in content creation on the platform[16]. - The company acknowledges that user growth rates are expected to continue to fluctuate and slow down due to market saturation[73]. - The company has implemented various features such as trending topics, search, and recommendation feeds to enhance user engagement and attract new users[75]. - The reliance on content creators is critical, as they contribute significantly to the platform's most popular content, and any decline in their contributions could adversely affect user engagement[77]. - The company emphasizes the importance of providing engaging and practical content to retain users and attract new ones[76]. - The company faces intense competition in user traffic and engagement, particularly from major Chinese internet companies like Tencent and ByteDance[81]. Regulatory and Compliance Risks - The company is subject to various restrictions and potential penalties from the Chinese government regarding its VIE structure, which could impact its operations and financial performance[31]. - New regulations regarding data security and privacy in China, including the Data Security Law and Personal Information Protection Law, pose additional compliance challenges for the company[34]. - The China Securities Regulatory Commission issued new rules for overseas listings, effective March 31, 2023, requiring companies to comply with filing requirements for any securities offerings outside of China[35]. - The evolving regulatory landscape in China may lead to significant adverse changes in the company's operations and the value of its securities, limiting its ability to raise capital[37]. - The company cannot guarantee compliance with all aspects of the rapidly changing legal and regulatory environment in China, which may affect its business operations[39]. - The company faces potential fines and penalties if found non-compliant with the new antitrust laws and regulations in China[36]. - The company is subject to potential fines and enforcement actions due to non-compliance with data protection regulations, which could adversely affect business performance[115]. Financial Structure and Investments - As of December 31, 2023, the company had 242,610,942 shares of common stock outstanding, comprising 154,788,918 Class A shares and 87,822,024 Class B shares[10]. - The total liabilities increased to $3,762,742,000 in 2023 from $3,738,914,000 in 2022, indicating a rise of approximately 0.6%[57][59]. - Shareholders' equity totaled $3,448,888,000 in 2023, compared to $3,344,745,000 in 2022, marking an increase of around 3.1%[57][59]. - The company reported a net gain of $10.9 million from fair value changes in investments in 2023, highlighting the volatility and risks associated with its investment portfolio[136]. - The company has completed a share purchase agreement on March 1, 2023, acquiring 100% of ShowWorld HongKong Limited for approximately RMB 2.16 billion (paid in USD), resulting in a 26.57% ownership stake in Tianxiaxiu Digital Technology Group Co., Ltd.[132]. - The company anticipates ongoing stock-based compensation expenses as a strategy to attract and retain key personnel, which may significantly impact operating performance[131]. Strategic Initiatives and Future Outlook - The company plans to launch new features aimed at enhancing user engagement, expected to roll out in Q2 2024[19]. - A strategic partnership with a leading technology firm was announced, aimed at expanding market reach and improving service offerings[20]. - Future guidance indicates expected revenue growth of 12-15% for the upcoming quarter[18]. - The company continues to explore market expansion opportunities and new product development to drive future growth[55]. - The company is investing $200 million in research and development for new technologies over the next fiscal year[19]. - The company is exploring potential acquisitions to bolster its market position and diversify its product offerings[20]. Operational Challenges - The company faces significant risks related to its business operations in China, which may impact its financial performance[68]. - The company relies heavily on online advertising and marketing services for revenue, and any failure to generate sustainable income could adversely affect its operating results[69]. - The company must expand its active user base; failure to do so may lead to a significant negative impact on its business and financial condition[69]. - The company faces challenges in maintaining effective partnerships with programmatic buying partners, as fluctuating inventory prices may reduce cost-effectiveness[79]. - The company is actively combating spam on its platform, which could affect user experience and engagement, potentially increasing operational costs[107]. - The company faces significant competition for qualified talent in China, which could adversely affect business growth and operational performance if key personnel are not retained[130]. Governance and Management - The board of directors includes prominent members such as Chairman Cao Guowei and independent directors, ensuring a diverse governance structure[4]. - The company is committed to retaining key personnel and attracting new talent[24]. - The company has established a series of contractual agreements with its Chinese subsidiaries and VIEs, including loan agreements and exclusive technology assistance agreements[27]. - The company is classified as a "controlled company" under NASDAQ rules due to Sina holding over 50% of voting power[183]. - Potential conflicts of interest exist due to the control by Sina, which may lead to strategic decisions that do not align with the interests of other shareholders[185].