Investment Rating - The report upgrades the investment rating to "Buy" with a target price of $15.04, up from a previous value of $12.92 [10][20]. Core Insights - The company reported a 1Q revenue increase of 0.3% year-over-year to $397 million, exceeding consensus expectations by 0.8%. Adjusted net profit rose 12.1% year-over-year to $120 million, surpassing expectations by 24.3% [1][4]. - The management anticipates steady growth in advertising spending from the automotive and mobile sectors in 2025, while the gaming and beauty sectors continue to face challenges, although the decline in beauty is narrowing [1][12]. - The AI-driven search feature, "智搜," has seen significant user growth, with MAU reaching 30 million in March, a 300% increase month-over-month, and daily usage averaging 8 million [3][11]. Revenue and Profit Forecast - The revenue forecast for 2025 has been adjusted down by 0.8% due to decreased advertising spending in the gaming and beauty sectors, while revenue for 2026 and 2027 has been slightly increased by 0.1% and 0.6% respectively [4][16]. - Adjusted net profit estimates for 2025, 2026, and 2027 have been revised down by 4.8%, 3.5%, and 1.5% to $460 million, $478 million, and $501 million respectively [4][16]. User Engagement and Advertising Efficiency - The report highlights that AI has improved advertising efficiency, with click-through rates (CTR) and effective cost per mille (eCPM) increasing by 10% and 5% respectively in certain scenarios [2][12]. - The company is focusing on enhancing user experience and advertising efficiency through increased AI investments, which are expected to drive future revenue growth [1][20]. Market Position and Competitive Landscape - The company is positioned to capture user engagement through its unique content ecosystem and real-time information capabilities, particularly in the news sector [11][20]. - The report notes that the company's valuation remains at a discount compared to global peers, primarily due to liquidity factors and slower revenue growth [20][22].

Financial Data and Key Metrics Changes - Weibo's total revenues for Q1 2025 reached $396.9 million, flat year over year, or up 1% on a constant currency basis [6][26] - Total advertising revenues were $339.1 million, flat year over year, while value-added service revenues increased to $57.7 million, up 2% year over year [26][27] - Non-GAAP operating income was $129.5 million, representing a non-GAAP operating margin of 33%, with net income attributable to Weibo reaching $119.5 million, an increase of 12% [7][32] Business Line Data and Key Metrics Changes - Advertising revenues related to the Spring Festival achieved double-digit growth year over year, with a notable increase in the number of participating advertisers [12] - E-commerce, dairy products, and food and beverage sectors showed solid growth, while the online game sector faced a year-over-year decline due to a high base effect from last year [18][20] - The handset manufacturer sector saw a decline in revenue, primarily due to shifts in product launch timelines [20] Market Data and Key Metrics Changes - In March 2025, Weibo's MAUs reached 591 million, and average DAUs reached 261 million, representing a net addition of 9 million users year over year [6][24] - The automobile sector continued to deliver growth, driven by both NEV brands and traditional OEMs increasing their budget allocation to Weibo [18] - E-commerce platforms, particularly Alibaba, ramped up ad spend during the Spring Festival, contributing to robust growth in advertising revenues [27] Company Strategy and Development Direction - Weibo's strategy for 2025 focuses on enhancing user value, solidifying its position in hot trends and entertainment content, and improving recommendation and search functions through AI integration [7][10] - The company aims to increase investment in vertical and video content ecosystems to drive user engagement and scale [7][10] - Weibo is committed to leveraging AI technology across various business scenarios, including search, social interaction, and advertising [13][15] Management's Comments on Operating Environment and Future Outlook - Management noted that while advertiser budgets remain cautious, there is a gradual unlocking of ad spend based on market feedback [16] - The company expects solid growth across several industries, particularly in automotive and e-commerce, while acknowledging challenges in the gaming sector [19][53] - Management emphasized the importance of AI in enhancing advertising effectiveness and user engagement, with expectations for continued improvement in ad revenues [44][56] Other Important Information - Weibo completed the distribution of an annual cash dividend of $0.08 per ordinary share, totaling approximately $200 million [32] - The company released its first ESG report, highlighting commitments to sustainability across various key areas [33] Q&A Session Summary Question: Overall thoughts on search progressions and future strategy - Management indicated that the AI search product has shown good improvement and will remain integrated within Weibo, focusing on hot topics and entertainment content [35][41] Question: Updates on AI monetization and advertising products - Management reported a 10% improvement in click-through rates due to AI integration, with ongoing efforts to enhance advertising effectiveness [36][44] Question: Outlook for Q2 and expectations for different industry verticals - Management expects Q2 performance to mirror Q1, with strong growth anticipated in automotive and e-commerce sectors, while challenges remain in gaming [50][52]

Financial Data and Key Metrics Changes - Weibo's total revenues for Q1 2025 reached $396.9 million, flat year over year, or up 1% on a constant currency basis [6][27] - Total advertising revenues were $339.1 million, flat year over year, while value-added service revenues reached $57.7 million, up 2% year over year [27][28] - Non-GAAP operating income was $129.5 million, representing a non-GAAP operating margin of 33% [7][27] - Net income attributable to Weibo increased by 12% to $119.5 million, with a net margin of 30% compared to 27% last year [27][32] Business Line Data and Key Metrics Changes - Advertising revenues related to the Spring Festival achieved double-digit growth year over year, with a notable increase in the number of participating advertisers [12] - The e-commerce sector showed robust growth, particularly driven by Alibaba's increased ad spend during the Spring Festival [28][19] - The online game sector faced a year-over-year decline due to a high base effect from major campaigns last year and a decrease in new game launches [21][29] Market Data and Key Metrics Changes - In March 2025, Weibo's MAUs reached 591 million, and average DAUs reached 261 million, representing a net addition of 9 million users year over year [6][25] - The automobile sector continued to deliver growth, driven by both NEV brands and traditional OEMs increasing their budget allocation to Weibo [19][28] - The beauty and personal care sector saw a narrowing decline year over year, with sequential growth during the quarter [21][22] Company Strategy and Development Direction - In 2025, Weibo's strategy focuses on enhancing user value, solidifying its position in hot trends and entertainment content, and improving recommendation and search functions through AI integration [7][10] - The company aims to increase investment in vertical and video content ecosystems to drive user engagement and scale [7][10] - Weibo is committed to leveraging AI technology across multiple business scenarios, including search, social interaction, and advertising [13][15] Management's Comments on Operating Environment and Future Outlook - Management noted that while advertiser budgets remain cautious, there is a gradual unlocking of ad spend based on market feedback [17] - The company expects solid growth in the automotive and e-commerce sectors in Q2, while the gaming industry continues to face challenges [55][56] - Management emphasized the importance of AI in enhancing advertising effectiveness and user engagement, with expectations for improved performance in the second half of the year [46][58] Other Important Information - Weibo completed the distribution of an annual cash dividend of $0.08 per ordinary share for the fiscal year 2024, totaling approximately $200 million [33] - The company released its first ESG report in April, highlighting its commitment to sustainability across various key areas [34] Q&A Session Summary Question: Overall strategy for search progression and AI monetization - Management discussed the integration of AI search models and noted improvements in user engagement and MAUs due to the launch of DeepSeek [40][41] - They indicated that while general purpose search still requires improvement, there has been a 5% increase in per capita search volume [42][43] Question: Advertising outlook for Q2 and updates on advertising products - Management expects Q2 performance to mirror Q1, with strong growth anticipated in the automotive and e-commerce sectors, while challenges remain in the gaming industry [53][55] - They highlighted the focus on new product marketing and performance-based advertising as core competitive advantages moving forward [57][58]

Financial Performance - Total net revenues for Q1 2025 were $396.9 million, flat year-over-year, or an increase of 1% on a constant currency basis[5] - Advertising and marketing revenues were $339.1 million, flat year-over-year, with a 1% increase on a constant currency basis; excluding Alibaba, revenues decreased by 6% to $296.5 million[7] - Value-added services (VAS) revenues increased by 2% year-over-year to $57.7 million, driven by growth in membership services[8] - Income from operations was $110.3 million, representing an operating margin of 28%, up from 25% in the same period last year[9] - Net income attributable to Weibo's shareholders was $107.0 million, compared to $49.4 million for the same period last year, with diluted net income per share of $0.41[12] - Non-GAAP income from operations was $129.5 million, with a non-GAAP operating margin of 33%, compared to 32% last year[9] - Non-operating income for Q1 2025 was $22.1 million, compared to a non-operating loss of $23.6 million for the same period last year[10] - Adjusted EBITDA improved from $133,025 thousand in Q1 2024 to $139,720 thousand in Q1 2025, indicating an increase of 5.1%[28] - Total net revenues slightly increased from $395,497 thousand in Q1 2024 to $396,855 thousand in Q1 2025, showing a growth of 0.34%[32] - Non-GAAP net income attributable to Weibo's shareholders also increased from $106,612 thousand in Q1 2024 to $119,532 thousand in Q1 2025, reflecting a growth of 12.1%[28] User Metrics - Monthly active users (MAUs) reached 591 million in March 2025, while average daily active users (DAUs) were 261 million[5] - The company has made Weibo Intelligent Search available to all users, achieving decent sequential growth in both user base and daily search queries[2] Assets and Liabilities - Cash, cash equivalents, and short-term investments totaled $2.08 billion as of March 31, 2025, down from $2.35 billion at the end of 2024[13] - Total assets increased from $6,504,499 thousand as of December 31, 2024 to $6,658,879 thousand as of March 31, 2025, representing a growth of approximately 2.37%[26] - Current liabilities increased from $968,136 thousand as of December 31, 2024 to $1,191,480 thousand as of March 31, 2025, a rise of 23.1%[26] - Total liabilities rose from $2,925,613 thousand as of December 31, 2024 to $3,150,661 thousand as of March 31, 2025, reflecting an increase of 7.7%[26] Revenue Breakdown - Advertising and marketing revenue from non-Ali advertisers decreased from $316,400 thousand in Q1 2024 to $296,494 thousand in Q1 2025, a decline of 6.3%[32] - Revenue from Alibaba increased from $22,551 thousand in Q1 2024 to $42,612 thousand in Q1 2025, representing a growth of 89.1%[32] - Non-GAAP operating margin improved from 32% in Q1 2024 to 33% in Q1 2025, indicating enhanced operational efficiency[28]

Core Viewpoint - Weibo Corporation will announce its unaudited financial results for Q1 2025 on May 21, 2025, before the U.S. market opens, followed by a conference call to discuss financial performance and business operations [1]. Company Overview - Weibo is a leading social media platform that allows users to create, share, and discover content online, combining real-time public self-expression with social interaction and content distribution [3]. - The platform enables users to post feeds with multimedia and long-form content, fostering a viral conversation stream through its asymmetric user relationships [3]. Advertising and Marketing - Weibo generates a substantial majority of its revenue from advertising and marketing services, including social display advertisements and promoted marketing offerings [4]. - The company employs a "mobile first" philosophy, displaying content in a simple information feed format and offering native advertisements that align with the platform's content [4]. - Weibo has developed a social interest graph recommendation engine to enhance marketing effectiveness by targeting audiences based on demographics, social relationships, interests, and behaviors [4].

Core Insights - Weibo Corporation has finalized its fiscal year 2024 with the release of its Form-20F on April 15, indicating the completion of a significant financial period for the company [1]. Company Summary - Weibo Corporation is a social media platform based in China, which has been actively engaging with its user base and expanding its services [1]. Financial Performance - The recently concluded fiscal year was marked by various developments, although specific financial metrics and performance indicators were not detailed in the provided text [1].

Core Viewpoint - Weibo Corporation has published its 2024 Environmental, Social and Governance (ESG) Report, highlighting its commitment to sustainable development and value creation across various domains, including social responsibility, technological innovation, and green operations [1][2]. Group 1: Social Responsibility and Community Engagement - Weibo has launched over 24,000 public welfare projects on its Charity Platform, attracting over 51 million individual donations, with total contributions exceeding RMB 760 million [3]. - The platform has initiated over 1,000 topics related to rural revitalization, generating over 20 billion views and over 5 million discussions, collaborating with various stakeholders to promote traditional Chinese culture [4]. Group 2: Technological Innovation and Content Ecosystem - Weibo has developed a comprehensive content ecosystem covering 39 verticals, including entertainment and sports, and launched an audio feature to support content creators [5][6]. - The company has registered its proprietary "Zhiwei" large language model and introduced AI-powered features to enhance user experience and content generation [7]. Group 3: Employee Development and Workplace Diversity - Female employees account for 53% of the total workforce, with women holding 47% of STEM-related positions and various leadership roles [8][9]. - Weibo has achieved a 100% employee training coverage rate, with an average training duration of approximately 28 hours per employee in 2024, resulting in an employee dedication rate of 84% [10]. Group 4: Environmental Sustainability - Weibo has reduced its Scope 3 greenhouse gas emissions by 39% compared to 2021, demonstrating its commitment to low-carbon development [11]. - The company’s data centers are designed with a Power Usage Effectiveness (PUE) of 1.2 and utilize 50% green power, with its headquarters receiving LEED Platinum certification [12]. Group 5: Corporate Governance and Industry Standards - Weibo has participated in the formulation of 11 industry standards and 17 group standards related to information security and privacy protection, contributing to the responsible development of the generative AI sector [14].

Financial Performance - For the year ended December 31, 2022, total costs and expenses reported under U.S. GAAP were $1,355,864, while under IFRS they adjusted to $1,370,286, reflecting an increase of $14,422[1] - Net income attributable to Weibo's shareholders for the year ended December 31, 2022, was $85,555 under U.S. GAAP, which adjusted to $10,000 under IFRS, indicating a significant decrease of 88.3%[1] - For the year ended December 31, 2023, total costs and expenses reported under U.S. GAAP were $1,286,902, which adjusted to $1,247,140 under IFRS, showing a reduction of $39,762[2] - Net income for the year ended December 31, 2023, was $357,495 under U.S. GAAP, adjusting to $351,340 under IFRS, a slight decrease of 1.7%[2] - For the year ended December 31, 2024, total costs and expenses reported under U.S. GAAP were $1,260,353, which adjusted to $1,222,774 under IFRS, indicating a decrease of $37,579[5] - Net income attributable to Weibo's shareholders for the year ended December 31, 2024, was $300,801 under U.S. GAAP, adjusting to $329,378 under IFRS, reflecting an increase of 9.5%[6] Revenue and Expenses - The cost of revenues for the year ended December 31, 2022, was $400,585 under U.S. GAAP, which adjusted to $403,102 under IFRS, an increase of $2,517[1] - Sales and marketing expenses for the year ended December 31, 2022, were $477,107 under U.S. GAAP, adjusting to $480,010 under IFRS, an increase of $2,903[1] - The fair value changes through earnings on investments for the year ended December 31, 2023, were $43,002 under U.S. GAAP, adjusting to $63,336 under IFRS, an increase of $20,334[2] - Interest expense for the year ended December 31, 2023, was $(120,070) under U.S. GAAP, adjusting to $(122,498) under IFRS, indicating an increase of $2,428[2] Assets and Liabilities - Total assets as of December 31, 2023, reported at $7,280,358, with IFRS adjustments resulting in a total of $7,322,919[7] - Long-term investments measured at fair value increased to $1,376,307 as of December 31, 2023, reflecting a fair value adjustment of $55,921[7] - Total liabilities amounted to $3,892,810, with convertible senior notes at $356,545 and accrued liabilities at $656,109[7] - Shareholders' equity as reported under IFRS was $3,338,694, after adjustments for redeemable non-controlling interest[7] - The company reported a decrease in goodwill from $166,436 to $155,332 after IFRS adjustments[7] - Total liabilities, redeemable non-controlling interests, and shareholders' equity combined were reported at $7,322,919[7] - As of December 31, 2024, total assets were reported at $6,504,499, with adjustments leading to a total of $6,548,499[8] - The company’s convertible senior notes under U.S. GAAP were reported at $320,803, with fair value adjustments leading to a total of $362,759[9] - Non-controlling interests increased to $91,415, reflecting a fair value adjustment of $41,262[9] - The total shareholders' equity reported was $3,517,583, after accounting for various adjustments[9]

Financial Performance - Revenues from VIEs accounted for 83.9%, 87.0%, and 86.2% of total revenues for the years 2022, 2023, and 2024, respectively[30]. - The consolidated total revenues for the year ended December 31, 2024, amounted to US$1,754.7 million, with third-party revenues contributing US$1,512.3 million[61]. - Total revenues for the year ended December 31, 2023, were $1,759,836 thousand, a decrease from $1,836,332 thousand in 2022, representing a decline of approximately 4.2%[62]. - Net income attributable to Weibo's shareholders for 2023 was $342,598 thousand, compared to $85,555 thousand in 2022, indicating a significant increase of 300.5%[62]. - The net income attributable to Weibo's shareholders for the year ended December 31, 2024, was US$300.8 million[61]. - The total amount of service fees paid by VIEs to the relevant WFOE for the years ended December 31, 2022, 2023, and 2024 was US$1,076.4 million, US$757.8 million, and US$769.0 million, respectively[55]. - The share of income from subsidiaries for 2023 was $529,304 thousand, compared to $305,672 thousand in 2022, reflecting an increase of 73.5%[62]. - The company had total shareholders' equity of $3,448,888 thousand as of December 31, 2023, compared to $3,533,783 thousand in 2022, indicating a decrease of 2.4%[65]. Regulatory Environment - The PRC regulatory environment regarding data security and privacy is rapidly evolving, posing compliance challenges[38]. - New anti-monopoly regulations in China may impact the company's operations and compliance requirements[39]. - The company may face penalties if it fails to comply with PRC laws and regulations, which could adversely affect its business[42]. - The company is subject to risks associated with the interpretation and enforcement of PRC laws, which could affect its operations[42]. - The company must file with the CSRC for future overseas offerings and listings, which may impact capital raising activities[44]. - The PCAOB has not issued any new determination regarding the inspection of accounting firms in mainland China and Hong Kong, which may affect the company's status under the HFCAA[47]. - The company does not expect to be identified as a Commission-Identified Issuer under the HFCAA after filing the annual report on Form 20-F[46]. - The Chinese government has implemented new advertising regulations effective May 1, 2023, requiring internet platform operators to prevent illegal advertisements and establish compliance mechanisms[101]. - The company is obligated to monitor advertising content for compliance with PRC laws, which could expose it to penalties if not adhered to[100]. - The company is subject to numerous cybersecurity regulations, which may lead to significant operational disruptions if compliance is not met[228]. Corporate Structure and VIEs - The company relies on contractual arrangements with VIEs for operations, which may not provide the same control as direct ownership[36]. - The company is classified as a "controlled company" under Nasdaq rules, allowing it to rely on exemptions from certain corporate governance requirements[201]. - Current PRC laws restrict foreign ownership in internet-related businesses to a maximum of 50%, impacting the company's corporate structure[207]. - The company consolidates the operating results of its VIEs under U.S. GAAP, despite investors purchasing equity in a Cayman Islands holding company[207]. - The VIEs hold critical assets such as the Internet Content Provision License and Online Culture Operating Permit, which are essential for business operations[215]. - There are uncertainties regarding the interpretation and enforcement of PRC laws that could impact the viability of the company's corporate structure[209]. - The company may face adverse tax consequences if PRC tax authorities challenge the arm's length nature of its contractual arrangements[216]. - Shareholders of the VIEs may have conflicts of interest that could adversely affect the performance of contractual arrangements[214]. - The legal system in China presents uncertainties regarding the enforcement of contractual arrangements, which could disrupt business operations[211]. - The company may lose access to important assets if any VIE declares bankruptcy or undergoes liquidation proceedings[215]. User Engagement and Advertising - The company relies heavily on online advertising and marketing services for revenue generation, which poses risks if user engagement declines[78]. - Advertising and marketing services accounted for 87%, 87%, and 85% of total revenues in 2022, 2023, and 2024, respectively, highlighting the company's reliance on this revenue stream[95]. - The effectiveness of the company's advertising services depends on user engagement and the size of its user base compared to competitors[105]. - The company emphasizes the importance of user-generated content and influencer contributions for maintaining user engagement and platform attractiveness[84]. - The company has introduced new functionalities and content formats, including Trends, Search, and live streaming, to enhance user engagement, but the effectiveness of these strategies remains uncertain[83]. - The company must adapt its advertising services to evolving user preferences, particularly the increasing demand for video content, to maintain revenue growth[98]. - The company is focused on developing new features and services to attract users and generate revenue, but new initiatives may not always succeed[117]. - The company has experienced revenue fluctuations due to external factors such as COVID-19, economic conditions, and competition, leading to a slowdown in revenue growth[94]. - The company continues to combat spam on its platform, which could negatively impact user engagement and operational costs[124]. - The company reported 590 million monthly active users (MAUs) and 260 million daily active users (DAUs) as of December 2024, indicating a potential decline in user growth rate due to market saturation[82]. Financial Obligations and Capital Needs - The company relies on dividends from PRC subsidiaries for cash needs, which are subject to restrictions under PRC laws, potentially impacting financial obligations[161]. - The company may need additional capital and financing, which may not be available on acceptable terms, potentially leading to increased debt obligations and operational restrictions[162]. - As of December 31, 2024, the company was in compliance with financial covenants related to its 2027 Loans, but failure to comply could lead to technical default[163]. - The company reported a net cash used in financing activities of $(1,029,439) thousand for the year ended December 31, 2024[67]. - The company experienced a decline in cash provided by operating activities from $(35,216) thousand in 2022 to $(84,940) thousand in 2023[68]. Legal and Compliance Risks - The company faces significant legal and regulatory risks related to data security and privacy, including potential penalties for non-compliance with various laws[131]. - The company may face liability for copyright or trademark infringement due to user-generated content on its platform, which could harm its reputation and financial condition[167]. - The company is required to verify the identities of all users who post on its platform, but has not been able to do so, exposing it to potential severe penalties[236]. - The company must conduct personal information protection compliance audits at least once every two years if processing data of over 10 million individuals[233]. - Regulatory investigations could lead to additional expenses and changes in business practices that may adversely affect the company's operations[239]. Operational Challenges - The company faces risks related to user misconduct on its platform, which could negatively impact brand image and financial performance[141]. - The company may face significant operational challenges if telecommunications and internet service costs rise, potentially affecting user growth and engagement[173]. - Service disruptions and infrastructure failures could hinder the company's ability to retain and attract users, impacting overall business performance[174]. - The company prioritizes product innovation and user experience over short-term results, which may adversely affect revenues and operating results[176]. - A prolonged economic downturn could materially affect the company's business and financial condition, particularly in advertising revenues[185]. Strategic Relationships - The relationship with SINA is crucial for the company's operations, and any reduction in support from SINA could lead to operational challenges[190]. - SINA has pledged 50% of its Class B ordinary shares in the company to secure a loan of up to $150 million, with a maturity date of March 13, 2028[196]. - If SINA defaults on the loan, it may lead to a change in control of the company, as the security agent could sell or foreclose on the pledged shares[198]. - Conflicts of interest may arise due to SINA's controlling ownership, potentially leading to decisions that favor SINA over the company's interests[203]. - The company has agreed to indemnify SINA for liabilities related to its business, which could create adverse interests between the two entities[204].

Investment Rating - The report maintains an "Overweight" rating for the company with a target price of $12.92 [7][18]. Core Insights - The company's 4Q revenue decreased by 1.5% year-over-year to $457 million, slightly below the consensus estimate by 0.5%. However, adjusted net profit increased by 39.6% to $107 million, exceeding expectations by 5.3% [1]. - Management anticipates an increase in advertising spending in the 3C, automotive, and e-commerce sectors in 2025, while the fast-moving consumer goods sector remains stable. The gaming and beauty sectors continue to face pressure [1][2]. - The company is focusing on building a content ecosystem and enhancing user engagement and quality, with daily active users (DAU) and monthly active users (MAU) at 260 million and 590 million, respectively [1][3]. Summary by Sections 4Q Performance - 4Q advertising revenue fell by 4.4% year-over-year to $386 million, primarily due to a high base effect from 2023. Value-added services (VAS) revenue grew by 18.4% to $71 million [2]. - The automotive and mobile sectors showed steady growth, while the beauty sector continued to struggle. The impact of consumer stimulus policies is expected to gradually manifest in 1Q25 [2]. AI and Content Strategy - The company is deepening its AI initiatives, enhancing content distribution efficiency and user engagement through features like "Smart Search" and AI-generated comments [3]. - The integration of AI is expected to empower the company's search and advertising business, leveraging its strong content moat [3]. Financial Forecast and Valuation - The adjusted net profit forecast for 2025 and 2026 has been lowered by 4.1% and 3.7% to $484 million and $495 million, respectively, mainly due to tax rate adjustments. The 2027 forecast is introduced with expected revenue and adjusted net profit of $1.87 billion and $509 million [4][13]. - The target price of $12.92 corresponds to a 6.5x PE ratio based on the 2025 adjusted net profit, which is at a discount compared to the global peer average of 21.3x due to liquidity factors and slower revenue growth [4][18].