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]

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]

Core Points - Weibo Corporation filed its annual report on Form 20-F for the fiscal year ended December 31, 2023, with the U.S. Securities and Exchange Commission on April 25, 2024 [1] - The annual report is available on Weibo's investor relations website and can be requested in hard copy by shareholders and ADS holders [1] Company Overview - Weibo is a leading social media platform in China that allows users to create, discover, and distribute content [2] - The platform supports real-time public self-expression and social interaction, enabling users to follow others, comment, and repost content [2] Advertising and Marketing - Weibo generates a substantial majority of its revenues from advertising and marketing services, including social display advertisements and promoted marketing offerings [3] - The company employs a "mobile first" philosophy, displaying content in a simple information feed format and offering native advertisements that align with this format [3] - Weibo 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 - Net income attributable to Weibo's shareholders for the year ended December 31, 2022, was $10,000, down from $214,709 in 2021[3] - The company reported a net income of $351,340 for the year ended December 31, 2023, compared to $198,267 in 2021[3] Costs and Expenses - Total costs and expenses for the year ended December 31, 2021, were reported at $1,587,290, an increase from $1,370,286 in 2022[2] - Interest expense for the year ended December 31, 2023, was $(122,498), compared to $(56,462) in 2021[3] - The cost of revenues for the year ended December 31, 2023, was $369,321, a decrease from $406,643 in 2021[3] - Sales and marketing expenses for the year ended December 31, 2023, were $456,648, down from $480,010 in 2022[3] - Product development costs for the year ended December 31, 2023, were $320,258, a decrease from $441,539 in 2021[3] - General and administrative expenses for the year ended December 31, 2023, were $100,913, a decrease from $142,090 in 2021[3] Investments and Fair Value - Fair value changes through earnings on investments for the year ended December 31, 2022, were reported at $(252,475), a significant decrease from $(266,472) in 2021[2] - The company reported a fair value change of $63,336 through earnings on investments for the year ended December 31, 2023[3] - Long-term investments increased to $1,320,386, reflecting a fair value adjustment of $55,921[4] - The fair value of investments measured at fair value through profit or loss was adjusted to reflect market conditions[4] Balance Sheet Highlights - Total assets as of December 31, 2023, reported under U.S. GAAP were $7,280,358, with total liabilities of $3,762,742[4] - Total shareholders' equity amounted to $3,448,888, with a decrease in accumulated other comprehensive loss to $(217,817)[4] - The redeemable non-controlling interest was recorded at $68,728, indicating a significant change in ownership structure[4] - The company reported a total of $317,625 in convertible senior notes, with a fair value adjustment of $38,920[4] - Retained earnings for Weibo shareholders reached $2,187,556, after accounting for various adjustments[4] - The total liabilities, redeemable non-controlling interests, and shareholders' equity combined were $7,280,358[4] - The company recognized a financial liability of $79,623 related to lease obligations[4] - The company’s additional paid-in capital was reported at $1,428,935, with adjustments for share-based compensation[4]

User Engagement and Growth - Weibo's MAUs increased from 573 million in December 2021 to 598 million in December 2023, while average DAUs rose from 249 million to 257 million during the same period, maintaining a DAU to MAU ratio of 43%[700]. - The company plans to enhance user experience and engagement by improving product features and refining its SIG recommendation engine[707]. - Weibo aims to increase monetization through user base growth, improved user engagement, and effective management of advertisement inventory[710]. - Weibo's brand recognition strategy focuses on user scale and engagement, optimizing channel investments to enhance user acquisition efficiency[713]. Financial Performance - Revenues for Weibo were reported at US$2,257.1 million in 2021, US$1,836.3 million in 2022, and US$1,759.8 million in 2023, with net income attributable to shareholders of US$428.3 million, US$85.6 million, and US$342.6 million respectively[703]. - Total net revenues decreased by 4% from US$1,836.3 million in 2022 to US$1,759.8 million in 2023, primarily due to the depreciation of RMB against the U.S. dollar[730]. - Advertising and marketing revenues decreased by 4% from US$1,596.7 million in 2022 to US$1,534.0 million in 2023, with the total number of advertisers dropping from 1.0 million to 0.7 million[731]. - Value-added services revenues decreased by 6% from US$239.7 million in 2022 to US$225.8 million in 2023, mainly due to RMB depreciation[733]. Cost Management - Total costs and expenses decreased by 5% from US$1,355.9 million in 2022 to US$1,286.9 million in 2023[739]. - Cost of revenues decreased by 7% from US$400.6 million in 2022 to US$374.3 million in 2023, attributed to lower labor and bandwidth costs[740]. - Sales and marketing expenses decreased by 3% from US$477.1 million in 2022 to US$461.4 million in 2023[741]. - Product development expenses decreased by 20% from US$415.2 million in 2022 to US$333.6 million in 2023, mainly due to reduced personnel-related expenses[742]. - General and administrative expenses increased by 123% from US$52.8 million in 2022 to US$117.6 million in 2023, largely due to the reversal of compensation costs[743]. Tax and Regulatory Environment - The company is entitled to a preferential tax rate of 15% due to its qualification as a "High and New Technology Enterprise," which will expire in 2025 unless renewed[719]. - Research and development expenses can be claimed at a rate of 200% for tax deductions since January 1, 2023, enhancing the company's investment in innovation[720]. - Weibo's advertising revenues are subject to a cultural business construction fee reduced to 1.5% until December 31, 2024, following a temporary exemption during the COVID-19 pandemic[721]. Cash Flow and Investments - Net cash provided by operating activities was US$672.8 million in 2023, compared to US$564.1 million in 2022[758][765]. - Cash and cash equivalents at the end of 2023 were US$2,584.6 million, down from US$2,690.8 million at the end of 2022[758]. - Net cash used in investing activities in 2023 was US$736.8 million, mainly due to cash paid on long-term investments of US$602.7 million and purchases of bank time deposits and wealth management products totaling US$755.3 million[768]. - Capital expenditures were US$35.1 million in 2021, US$43.1 million in 2022, and US$36.8 million in 2023, indicating ongoing investment to support business growth[776]. Shareholder Returns - A special cash dividend of US$0.85 per ordinary share and ADS was approved in May 2023, totaling US$200.1 million for the year[897]. - A subsequent special cash dividend of US$0.82 per ordinary share and ADS was approved in March 2024, expected to total approximately US$200 million[898]. - For the years ended December 31, 2021 and 2022, dividends to shareholders were nil, indicating a significant increase in 2023[897]. Corporate Governance and Management - The company has the right to seek damages if a duty owed by its directors is breached, reflecting its commitment to corporate governance[833]. - The board of directors consists of seven members, with one female director and six male directors as of March 31, 2024[835]. - The audit committee is composed of two independent directors, Mr. Pochin Christopher Lu and Mr. Pehong Chen, with Mr. Lu serving as the chair[831]. - The compensation committee, chaired by Mr. Pehong Chen, is responsible for reviewing and approving the total compensation packages for executive officers and non-employee directors[832]. Employment and Compensation - The company had 5,268 employees as of December 31, 2023, with the largest function being product development, which accounted for 2,284 employees[836]. - The company paid an aggregate of approximately US$3.9 million in cash and benefits to its executive officers for the year ended December 31, 2023[817]. - The company has not set aside or accrued any amount to provide pension, retirement, or other similar benefits to its executive officers and directors[817]. - The company has entered into employment agreements with its senior executive officers, allowing termination for cause without remuneration[818].

Group 1 - Weibo is currently deeply undervalued, trading at only 5x its earnings, the lowest among China's social media operators, indicating potential for a reversal [2] - The company issued a special dividend with an 8.7% yield, which may act as a catalyst for market interest [5] - Analysts have lowered their price targets significantly, with the consensus figure down more than 50% in the last 12 months, yet the market is trading below the low end of the analyst range [6] Group 2 - Weibo's Q4 results showed a 3% growth in ad sales and a 5% increase in Value-added Services, with daily active users (DAUs) advancing by 2% [4] - The company's earnings were weaker than consensus expectations, down about $0.19, but it maintains a solid balance sheet with a cash position of $3.2 billion [5] - Institutional activity has been positive, with institutions buying Weibo stock for five consecutive quarters, and Goldman Sachs increasing its position by 200% [7] Group 3 - The technical outlook suggests Weibo is bottoming after a 95% contraction in share price over six years, with a potential reversal pattern forming [8] - The stock is poised to move towards the $10.50 region, with a critical resistance target near $11.25 if another catalyst emerges [8] - Despite the current "Hold" rating among analysts, there are indications that the market may see upward movement if conditions improve [6][9]

Investment Rating - The report maintains a BUY rating for Weibo, indicating a potential return of over 15% over the next 12 months [2][13]. Core Insights - Weibo's total revenue for 4Q23 grew by 3% YoY to US$464 million, slightly above estimates, while FY23 revenue declined by 4% YoY to US$1.76 billion [2]. - Non-GAAP operating income for 4Q23 decreased by 4% YoY to US$146 million, but was 7% ahead of consensus due to stringent control over product development expenses [2]. - The company plans to increase investment in content and user acquisition to drive top-line growth in 2024, with expected revenue flat YoY at US$1.77 billion [2]. - The target price has been lowered to US$18.80 from US$23.50, reflecting a discount to peers' average valuation [2]. Revenue and Profitability - For FY24, total revenue is projected at US$1.77 billion, with adjusted net profit forecasted at US$451 million, down 16-19% from previous estimates [2][7]. - The adjusted net profit margin is expected to decline to 25.5% in FY24E, reflecting increased investments [2][11]. - Advertising revenue in 4Q23 grew by 3% YoY to US$404 million, with specific verticals like automobiles and online games showing strong performance [2]. User Engagement and Community Development - Monthly Active Users (MAUs) increased by 2% YoY to 598 million as of December 2023 [2]. - Weibo is focusing on enhancing user stickiness through investments in key content verticals and optimizing social products [2]. Shareholder Returns - Weibo announced a special cash dividend of US$0.82 per share, translating to an approximate 8% dividend yield, aimed at supporting valuation recovery [2].