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].

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 ...

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 - 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]

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 ...

Spencer Platt Chinese social media stock Weibo (NASDAQ:WB) has underperformed even its PRC peers this week on the back of a Bank of America Securities downgrade, dipping below $9 per share, which represents not only the 52-week low, but a low for the entire trading history of the stock. With a strong record of profitability, single digit price-to-earnings ratio, a third of its market cap in net cash, half its market cap in long term investments, and a powerhouse competitive position as China's equivalen ...