Investment Rating - The report assigns a "Buy" rating for the company, with a current price of $9.51 and a fair value of $15.52 [1][2]. Core Insights - The company reported Q4 2023 revenue of $464 million, which is a year-over-year increase of 3% and a quarter-over-quarter increase of 5%, exceeding consensus expectations of $454 million. The constant currency revenue grew by 5% year-over-year [2]. - The gross margin reached 78%, up 2.1 percentage points year-over-year, although it declined by 0.3 percentage points quarter-over-quarter. This is 1 percentage point above the consensus expectation of 77% [2]. - GAAP net profit attributable to shareholders was $83.23 million, down 41% year-over-year but up 7% quarter-over-quarter, surpassing the consensus estimate of $78.99 million. Non-GAAP net profit was $76.37 million, down 57% year-over-year and down 44% quarter-over-quarter, falling short of the consensus estimate of $122 million due to tax adjustments affecting non-recurring items [2]. - The company declared a special cash dividend of $200 million to enhance shareholder returns [2]. - Advertising revenue for Q4 was $404 million, reflecting a year-over-year increase of 3% and a quarter-over-quarter increase of 4%, with constant currency growth of 5%, compared to the consensus estimate of $394 million [2]. - The company expects to increase investments in community vertical content and user acquisition in 2024, as well as infrastructure for AIGC, which may lead to a slight increase in operating expenses [2]. Financial Projections - Revenue is projected to reach $1.75 billion in 2024 and $1.80 billion in 2025, with year-over-year changes of -1% and +3% respectively. Adjusted net profit is expected to be $437 million in 2024 and $486 million in 2025, with growth rates of -3% and +11% respectively [2][8]. - The report estimates a fair value of $15.52 per ADS based on a 1x PEG valuation, corresponding to a PE ratio of 8.4 times the adjusted net profit for 2024 [11][12].

Investment Rating - The investment rating for the company is "Buy" with a target price of $15.52 per ADS (121.35 HKD) [1][2]. Core Views - The company reported Q4 2023 revenue of $464 million, which is a year-over-year increase of 3% and a quarter-over-quarter increase of 5%, exceeding consensus expectations of $454 million. The revenue growth at constant exchange rates was 5% year-over-year [2]. - The gross margin reached 78%, up 2.1 percentage points year-over-year, although it declined 0.3 percentage points quarter-over-quarter. This was 1 percentage point above the consensus expectation of 77% [2]. - GAAP net profit attributable to shareholders was $83.23 million, down 41% year-over-year but up 7% quarter-over-quarter, surpassing the consensus estimate of $78.99 million. Non-GAAP net profit was $76.37 million, down 57% year-over-year and down 44% quarter-over-quarter, falling short of the consensus estimate of $122 million due to tax adjustments affecting non-recurring items [2]. - The company declared a special cash dividend of $200 million to enhance shareholder returns [2]. - Advertising revenue for Q4 was $404 million, reflecting a year-over-year increase of 3% and a quarter-over-quarter increase of 4%, with a constant exchange rate growth of 5%, compared to the consensus estimate of $394 million [2]. - The company is expected to increase investments in community vertical content and user acquisition in 2024, as well as expand infrastructure in AIGC, which may lead to a slight increase in operating expenses [2]. Financial Summary - The company’s revenue for 2024 and 2025 is projected to be $1.75 billion and $1.80 billion, respectively, with year-over-year growth rates of -1% and 3% [2][8]. - Adjusted net profit for 2024 and 2025 is expected to be $437 million and $486 million, reflecting year-over-year growth rates of -3% and 11% [2][8]. - The company maintains a cautious outlook on revenue due to the mixed performance across different industries, particularly with beauty products declining while sectors like automotive and gaming show growth [2][8]. Valuation - The valuation is based on a PEG ratio of 1x, leading to a target price of $15.52 per ADS, which corresponds to a PE ratio of 8.4 times the adjusted net profit for 2024 [2][11].

Financial Data and Key Metrics Changes - In Q4 2023, total revenue reached $463.7 million, an increase of 3% year-over-year and 5% quarter-over-quarter [7] - Total ad revenues in Q4 2023 were $403.7 million, also up 3% year-over-year and 4% quarter-over-quarter [7] - For the full year 2023, total revenues were $1.76 billion, a decrease of 4% year-over-year, while total ad revenues were $1.53 billion, also down 4% year-over-year [8] - Non-GAAP operating income for Q4 2023 was $145.9 million, with a non-GAAP operating margin of 31% [7] - Full year 2023 non-GAAP operating income reached $592.1 million, representing a non-GAAP operating margin of 34% [8] Business Line Data and Key Metrics Changes - Mobile ad revenue contributed approximately 94% of total ad revenue in both Q4 2023 and full year 2023 [28] - The handset sector showed double-digit growth year-over-year and quarter-over-quarter in Q4 2023 [29] - The beauty and personal care industry faced challenges, leading to a decline in ad volume share [17][30] Market Data and Key Metrics Changes - Weibo's MAUs reached 598 million and average daily users reached 257 million in Q4 2023, adding approximately 11 million and 5 million users year-over-year, respectively [9][26] - The healthcare and online games industries experienced double-digit growth year-over-year in Q4 2023 [16] - Ad revenues from Alibaba increased by 6% in Q4 2023, reflecting a modest recovery in the consumption market [32] Company Strategy and Development Direction - The company aims to enhance its content ecosystem and improve operating efficiency in 2024, focusing on user community growth and engagement [20][21] - Strategies include reinforcing the competitive edge of hot trends and IPs, revitalizing the vertical ecosystem, and optimizing content marketing and performance-based ad products [20][24] - The company plans to increase the share of vertical content traffic to over 60% in the next 2 to 3 years to enhance user stickiness and monetization efficiency [50] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for advertising revenue growth in 2024, with expectations for a better second half of the year [41][42] - The company acknowledged challenges in the beauty and cosmetics industry, with expectations for stabilization in ad budget allocation [46] - Overall, management emphasized the importance of leveraging unique value propositions and diversified content ecosystems to capture market opportunities [33] Other Important Information - The company announced a special cash dividend of $0.82 per ordinary share, totaling approximately $200 million, with payment expected in May [40] - A convertible bond offering of $330 million was completed in December 2023, aimed at refinancing existing debt and enhancing financial flexibility [39] Q&A Session Summary Question: Advertising revenue growth outlook for 2024 - Management remains cautious about providing specific expectations for 2024 due to uncertainties in the consumption market, but sees recovery across most industries in Q1 [41] - The company expects a better second half of 2024, particularly in gaming and sports sectors due to upcoming events like the Olympics [42] Question: Strategies regarding users and content ecosystem - The company plans to maintain marketing budgets similar to 2023, focusing on user acquisition through strategic collaborations and enhancing user engagement [49] - There is an emphasis on shifting traffic towards verticals to improve monetization efficiency [50] Question: Capital allocation and shareholder return plans - Management confirmed the continuation of dividend payouts and potential stock repurchases, aligning with business growth and competitive advantages [54]

For the quarter ended December 2023, Weibo Corporation (WB) reported revenue of $463.67 million, up 3.5% over the same period last year. EPS came in at $0.31, compared to $0.75 in the year-ago quarter.The reported revenue represents a surprise of +2.51% over the Zacks Consensus Estimate of $452.3 million. With the consensus EPS estimate being $0.45, the EPS surprise was -31.11%.While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determ ...

Financial Performance - For Q4 2023, Weibo reported net revenue of $463.7 million, a 3% increase year-over-year, or a 5% increase based on fixed exchange rates[2]. - Advertising and marketing revenue for Q4 2023 was $403.7 million, also up 3% year-over-year, or 5% based on fixed exchange rates[2]. - For the fiscal year 2023, Weibo's total net revenue was $1.76 billion, a 4% decrease from $1.84 billion in 2022[7]. - Operating profit for Q4 2023 was $119 million, with an operating margin of 26%, down from 36% in the same quarter last year[5]. - The net profit attributable to Weibo shareholders for Q4 2023 was $83.2 million, translating to a diluted earnings per share of $0.34[5]. - Operating profit for 2023 was $472.9 million, compared to $480.5 million in 2022, with an operating margin of 27% in 2023 versus 26% in the previous year[8]. - Net profit attributable to Weibo shareholders in 2023 was $342.6 million, significantly up from $85.6 million in 2022, with diluted earnings per share of $1.43 compared to $0.36 in 2022[8]. - Non-GAAP operating profit for 2023 was $592.1 million, down from $601.1 million in 2022, with a non-GAAP operating margin of 34% compared to 33% in the previous year[8]. - The diluted earnings per share (EPS) attributable to Weibo shareholders for Q3 2023 was $0.57, down from $0.75 in Q4 2022[22]. User Engagement - The number of monthly active users reached 598 million in December 2023, with a net increase of approximately 11 million users year-over-year[2]. - The average daily active users in December 2023 were 257 million, with a net increase of approximately 5 million users year-over-year[2]. - The company is focusing on enhancing its mobile-first strategy and improving its social interest graph recommendation engine to increase user engagement and marketing effectiveness[17]. - The company anticipates potential challenges in expanding its active user base and user engagement due to regulatory uncertainties in China[15]. Costs and Expenses - Total costs and expenses in 2023 amounted to $1.29 billion, down from $1.36 billion in 2022, primarily due to the depreciation of the RMB against the USD and a reduction in personnel-related costs[8]. - Total costs and expenses for the three months ended September 30, 2023, were $308.17 million, an increase of 7.2% from $287.53 million in the same period last year[17]. Cash and Investments - Cash, cash equivalents, and short-term investments totaled $3.2 billion as of December 31, 2023[6]. - Cash generated from operating activities in 2023 was $672.8 million, a 19% increase from $564.1 million in 2022[9]. - The company completed the issuance of $330 million convertible senior notes due in 2030, with an annual interest rate of 1.375%[10]. - A special cash dividend of $0.82 per share has been approved, totaling approximately $200 million, to be paid on or around May 6, 2024[11]. Revenue Breakdown - The revenue from value-added services in 2023 was $225.8 million, a decrease of 6% compared to $239.7 million in 2022[8]. - Revenue from advertising and marketing for Q3 2023 was $389,301, slightly down from $390,544 in Q3 2022[25]. - The company reported a decrease in value-added services revenue to $52,850 in Q3 2023 from $57,454 in Q3 2022[25]. Assets and Liabilities - The company reported a total asset value of $7.28 billion as of December 31, 2023, compared to $7.13 billion as of December 31, 2022[20]. - Total liabilities amounted to $3,738,914 as of September 30, 2023, compared to $3,762,742 at the end of 2022[21]. - The total equity attributable to Weibo shareholders was $3,330,250 as of September 30, 2023, down from $3,398,735 at the end of 2022[21].

BEIJING, March 14, 2024 /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 fourth quarter and fiscal year ended December 31, 2023. "In 2023, we further improved our product's competitiveness and operating efficiency," said Gaofei Wang, CEO of Weibo. "Our user community expanded this year, as we have reinforced our content ecosystem and enhanced core competitiveness of our products. ...

Financial Performance - Weibo's net revenue for Q4 2023 was $463.7 million, a 3% increase year-over-year[2]. - Advertising and marketing revenue for Q4 2023 reached $403.7 million, also up 3% year-over-year[2]. - Value-added services revenue for Q4 2023 was $59.9 million, reflecting a 4% year-over-year increase[2]. - Total net revenue for the fiscal year 2023 was $1.76 billion, a 4% decrease compared to $1.84 billion in 2022[7]. - Operating profit for Q4 2023 was $119.0 million, with an operating margin of 26%[5]. - Operating profit for 2023 was $472.9 million, compared to $480.5 million in 2022, with an operating margin of 27% in 2023 versus 26% in the previous year[8]. - Net profit attributable to Weibo shareholders for Q4 2023 was $83.2 million, translating to diluted earnings per share of $0.34[5]. - Net profit attributable to Weibo shareholders for 2023 was $342.6 million, significantly up from $85.6 million in 2022, with diluted earnings per share of $1.43 compared to $0.36 in 2022[8]. - Non-GAAP operating profit for 2023 was $592.1 million, down from $601.1 million in 2022, with a non-GAAP operating margin of 34% compared to 33% in the previous year[8]. - Non-GAAP net profit attributable to Weibo shareholders for 2023 was $450.6 million, down from $540.1 million in 2022, with diluted non-GAAP earnings per share of $1.88 compared to $2.27 in 2022[8]. User Metrics - Monthly active users in December 2023 reached 598 million, with a net increase of approximately 11 million users year-over-year[2]. Cash and Dividends - The board approved a special cash dividend of approximately $200 million to shareholders[2]. - A special cash dividend of $0.82 per share has been approved, totaling approximately $200 million, to be paid on or around May 6, 2024[11]. - Cash, cash equivalents, and short-term investments totaled $3.2 billion as of December 31, 2023[6]. - Operating cash flow for Q4 2023 was $218.2 million, with capital expenditures of $7.5 million[6]. - Cash generated from operating activities in 2023 was $672.8 million, a 19% increase from $564.1 million in 2022[9]. Costs and Expenses - Total costs and expenses for 2023 amounted to $1.29 billion, down from $1.36 billion in 2022, primarily due to the depreciation of the RMB against the USD and a reduction in personnel-related costs[8]. - Total costs and expenses for the three months ended September 30, 2023, were $308.17 million, an increase of 7.2% compared to $287.53 million for the same period in 2022[17]. Assets and Liabilities - The company reported a total asset value of $7.28 billion as of December 31, 2023, compared to $7.13 billion as of December 31, 2022[20]. - Total liabilities amounted to $3,738,914 as of September 30, 2023, slightly down from $3,762,742 at the end of 2022[21]. - The total equity attributable to Weibo shareholders was $3,330,250 as of September 30, 2023, compared to $3,398,735 at the end of 2022[21]. Revenue Breakdown - Weibo's revenue is primarily derived from advertising and marketing services, which accounted for the majority of its income[17]. - Revenue from advertising and marketing for Q3 2023 was $389,301, a slight decrease from $390,544 in Q3 2022[25]. - Value-added services revenue for Q3 2023 was $52,850, down from $57,454 in Q3 2022[25]. Tax and Regulatory Environment - The income tax expense for 2023 was $145.3 million, up from $30.3 million in 2022, primarily due to tax liabilities related to uncertain tax positions[8]. - The company faces risks including regulatory uncertainties in China and competition in advertising and marketing expenditures[15]. Strategic Focus - The company is focusing on enhancing its mobile-first strategy and improving its social interest graph recommendation engine to increase marketing effectiveness[17].

Financial Performance - For Q4 2023, Weibo's net revenues were $463.7 million, a 3% increase year-over-year, or a 5% increase on a constant currency basis[3] - Advertising and marketing revenues for Q4 2023 were $403.7 million, also a 3% increase year-over-year, with a constant currency increase of 5%[3] - For fiscal year 2023, total net revenues were $1.76 billion, a 4% decrease year-over-year, but a 1% increase on a constant currency basis[5] - Total net revenues for the three months ended September 30, 2023, were $442,151 thousand, a decrease of 1.9% from $447,998 thousand for the same period in 2022[27] - Total net revenues for the three months ended September 30, 2023, were $389,301, slightly down from $390,544 in the previous year, reflecting a decrease of approximately 0.3%[35] - Total net revenues for the twelve months ended December 31, 2023, reached $1,836,332, up from $1,759,836 in the previous year, indicating a growth of approximately 4.4%[35] Income and Profitability - Non-GAAP net income attributable to Weibo's shareholders for Q4 2023 was $76.4 million, down from $178.5 million in the same period last year[10] - Net income attributable to Weibo's shareholders for the twelve months ended December 31, 2023 was $342,598 million, compared to $85,555 million for the twelve months ended December 31, 2022, indicating a significant increase[32] - Non-GAAP net income attributable to Weibo's shareholders for the twelve months ended December 31, 2023 was $450,566 million, up from $540,077 million for the twelve months ended December 31, 2022[32] - Non-GAAP operating margin improved to 34% for the twelve months ended December 31, 2023, compared to 33% for the same period in 2022[32] - The company reported a non-GAAP diluted net income per share of $1.88 for the twelve months ended December 31, 2023, compared to $2.27 for the twelve months ended December 31, 2022[32] Operating Metrics - Operating income for Q4 2023 was $119.0 million, with an operating margin of 26%, down from 36% in the previous year[8] - Non-GAAP income from operations for fiscal year 2023 was $592.1 million, with a non-GAAP operating margin of 34%[12] - Weibo's income from operations for the three months ended September 30, 2023, was $133,986 thousand, a decrease of 16.5% from $160,470 thousand for the same period in 2022[27] User Engagement - Monthly active users (MAUs) reached 598 million in December 2023, with a net addition of approximately 11 million users year-over-year[4] Cash Flow and Investments - Cash provided by operating activities for fiscal year 2023 was $672.8 million, a 19% increase year-over-year[14] - The company completed an offering of convertible senior notes totaling $330 million, maturing in December 2030[15] - Cash and cash equivalents decreased from $2,690,768 million as of December 31, 2022 to $2,584,635 million as of December 31, 2023, a decline of 3.9%[29] - Long-term investments rose significantly from $993,630 million as of December 31, 2022 to $1,320,386 million as of December 31, 2023, an increase of 33%[29] Shareholder Returns - Weibo's board approved a special cash dividend of $200 million, translating to $0.82 per ordinary share and ADS[16] Cost Management - Total costs and expenses for the three months ended September 30, 2023, were $308,165 thousand, an increase of 7.2% from $287,528 thousand for the same period in 2022[27] - The company reported a significant increase in product development expenses, which rose to $82,764 thousand for the three months ended September 30, 2023, compared to $99,328 thousand in the same period last year[27] Advertising Revenue - Non-Ali advertisers revenue for the three months ended September 30, 2023, was $367,633, showing a slight increase from $348,271 in the same period last year, representing a growth of approximately 8.3%[35] - Alibaba's revenue as an advertiser decreased to $21,668 for the three months ended September 30, 2023, down from $42,273 in the same period last year, indicating a decline of about 48.7%[35] - Value-added services revenue increased to $52,850 for the three months ended September 30, 2023, compared to $57,454 in the same period last year, marking a decline of about 8.8%[35] - Non-Ali advertisers revenue for the twelve months ended December 31, 2023, was $1,489,676, compared to $1,422,406 in the previous year, representing an increase of about 4.7%[35] - Alibaba's revenue as an advertiser for the twelve months ended December 31, 2023, was $106,974, slightly down from $111,608 in the previous year, reflecting a decrease of approximately 4.7%[35] - Value-added services revenue for the twelve months ended December 31, 2023, was $239,682, compared to $225,822 in the previous year, indicating an increase of about 6.1%[35]

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Editor's note: Seeking Alpha is proud to welcome Bargain Buyer as a new contributor. It's easy to become a Seeking Alpha contributor and earn money for your best investment ideas. Active contributors also get free access to SA Premium. Click here to find out more » PETER PARKS/AFP via Getty Images Investment Thesis I believe Weibo (NASDAQ:WB) is an undervalued, dominant player in the Chinese social media market that happens to be a low-risk, high-uncertainty bet at current prices. I think the market has ...