Core Viewpoint - Weibo Corporation reported solid performance in the fourth quarter of 2024, focusing on high-quality user acquisition and engagement, optimizing its content ecosystem, and maintaining strong operating efficiency while announcing an annual dividend payout of US$200 million for fiscal year 2024 [2][22][23]. Fourth Quarter 2024 Highlights - Total net revenues for Q4 2024 were US$456.8 million, a decrease of 1% year-over-year [6][17]. - Advertising and marketing revenues were US$385.9 million, down 4% compared to the same period last year, primarily due to the underperformance in the online game sector [7][17]. - Value-added services (VAS) revenues increased by 18% year-over-year to US$71.0 million, driven by growth in membership services and game-related revenues [8][17]. - Operating margin for Q4 2024 was 26%, consistent with the previous year, while non-GAAP operating margin was 30%, down from 31% [9][17]. - Net income attributable to Weibo's shareholders was US$8.9 million, a significant decrease from US$83.2 million in the same quarter last year [12][17]. Fiscal Year 2024 Highlights - Total net revenues for fiscal year 2024 were US$1.75 billion, relatively flat compared to US$1.76 billion in 2023 [14][17]. - Advertising and marketing revenues for 2024 were US$1.50 billion, a decrease of 2% year-over-year [14][17]. - VAS revenues for 2024 increased by 13% to US$256.0 million [15][17]. - Income from operations for 2024 was US$494.3 million, with an operating margin of 28%, up from 27% in 2023 [16][17]. - Net income attributable to Weibo's shareholders for 2024 was US$300.8 million, down from US$342.6 million in 2023 [20][17]. Dividend Declaration - The board of directors adopted a cash dividend policy, declaring a cash dividend of US$0.82 per ordinary share for fiscal year 2024, amounting to approximately US$200 million [22][23]. Cash Flow and Financial Position - As of December 31, 2024, Weibo's cash, cash equivalents, and short-term investments totaled US$2.4 billion [13][17]. - Cash provided by operating activities for 2024 was US$639.9 million, compared to US$672.8 million in 2023 [21][17]. User Engagement Metrics - Monthly active users (MAUs) reached 590 million in December 2024, with average daily active users (DAUs) at 260 million [17].

Financial Performance - In Q4 2024, Weibo's net revenue was $456.8 million, a decrease of 1% year-over-year[5]. - Advertising and marketing revenue for Q4 2024 was $385.9 million, down 4% year-over-year, primarily due to a high comparison base from the previous year[7]. - Value-added services revenue increased by 18% year-over-year to $71.0 million in Q4 2024, driven by growth in membership services and gaming-related income[5]. - Operating profit for Q4 2024 was $117.9 million, with an operating margin of 26%[8]. - Net profit attributable to Weibo shareholders in Q4 2024 was $8.9 million, with diluted earnings per share of $0.04[9]. - For the fiscal year 2024, Weibo's total net revenue was $1.75 billion, remaining stable compared to $1.76 billion in 2023[11]. - The fiscal year 2024 advertising and marketing revenue was $1.50 billion, a decrease of 2% from $1.53 billion in 2023[11]. - Value-added services revenue for the fiscal year 2024 reached $256.0 million, an increase of 13% from $225.8 million in 2023[12]. - Operating profit for 2024 is $494.3 million, up from $472.9 million in 2023, with an operating margin of 28% compared to 27% last year[14]. - Net profit attributable to Weibo shareholders for 2024 is $300.8 million, down from $342.6 million in 2023, with diluted earnings per share of $1.16 compared to $1.43 in 2023[15]. - Non-GAAP net profit attributable to Weibo shareholders for 2024 is $478.6 million, an increase from $450.6 million in 2023, with diluted earnings per share of $1.82 compared to $1.88 in 2023[15]. - Cash generated from operating activities for 2024 is $639.9 million, down from $672.8 million in 2023[15]. - The net profit attributable to Weibo shareholders for the twelve months ending December 31, 2024, was $478,637 thousand, a 5.9% increase compared to $450,566 thousand for the previous year[33]. - The adjusted EBITDA for the twelve months ending December 31, 2024, was $606,164 thousand, reflecting a slight decrease from $630,607 thousand in the previous year[35]. Cash and Dividends - As of December 31, 2024, Weibo had cash, cash equivalents, and short-term investments totaling $2.4 billion[10]. - The board approved a dividend of $200 million for the fiscal year 2024, reflecting the company's commitment to enhancing shareholder returns[4]. - The board has adopted a cash dividend policy and declared a cash dividend of $0.82 per share for the 2024 fiscal year, totaling approximately $200 million[17]. - The board will determine the dividend amount based on the company's operating performance, profitability, cash flow, and financial condition[16]. Costs and Expenses - Total costs and expenses for 2024 are $1.26 billion, a decrease of 2% from $1.29 billion in 2023[13]. Comparison with Previous Periods - Total net revenue for Q4 2023 was $463.7 million, a slight increase from $456.8 million in Q3 2023, and $1.76 billion for the full year 2023[27]. - Advertising and marketing revenue for Q4 2023 was $403.7 million, compared to $385.9 million in Q4 2022, while full-year revenue was $1.53 billion, down from $1.50 billion in 2022[27]. - Value-added services revenue increased to $59.9 million in Q4 2023, up from $55.5 million in Q4 2022, with full-year revenue rising to $225.8 million from $226.0 million[27]. - Operating profit for Q4 2023 was $119.0 million, compared to $117.9 million in Q3 2023, and $472.9 million for the full year 2023, up from $494.3 million in 2022[27]. - Net profit attributable to Weibo shareholders for Q4 2023 was $83.2 million, significantly higher than $8.9 million in Q3 2023, with full-year net profit at $342.6 million, compared to $300.8 million in 2022[27]. - Basic earnings per share for Q4 2023 was $0.35, up from $0.04 in Q3 2023, while full-year basic earnings per share increased to $1.45 from $1.27 in 2022[28]. Assets and Liabilities - Cash and cash equivalents decreased to $2.58 billion as of December 31, 2023, from $1.89 billion in 2024[30]. - Total assets decreased to $7.28 billion as of December 31, 2023, compared to $6.50 billion in 2024[30]. - Total liabilities decreased to $3.76 billion as of December 31, 2023, from $2.93 billion in 2024[31]. - Shareholders' equity attributable to Weibo shareholders increased to $3.40 billion as of December 31, 2023, compared to $3.48 billion in 2024[31]. Non-GAAP Metrics - Non-GAAP financial metrics are used to reflect the company's ongoing performance and provide meaningful comparisons across periods[20]. - The company emphasizes that non-GAAP financial metrics should be viewed as a supplement to GAAP metrics and may not be comparable to those used by other companies[22]. - For the three months ending December 31, 2023, the non-GAAP operating profit was $145,856 thousand, representing a 10.7% increase from $131,700 thousand in the previous quarter[33]. - The non-GAAP operating profit margin for the three months ending December 31, 2023, was 31%, compared to 34% for the same period last year[35]. Conference Call - The company will hold a conference call on March 13, 2025, to discuss its financial performance and business operations[18]. Advertising Revenue - Advertising revenue from non-Alibaba advertisers for the three months ending December 31, 2023, was $358,848 thousand, showing a 5.5% increase from $345,528 thousand in the previous quarter[37]. Other Financial Information - The total net income for the three months ending December 31, 2023, was $463,667 thousand, a slight decrease from $464,480 thousand in the previous quarter[37]. - The diluted earnings per share attributable to Weibo shareholders for the three months ending December 31, 2023, was $0.31, compared to $0.53 in the previous quarter[33]. - The company reported a total of 246,382 thousand shares used for calculating diluted earnings per share for the three months ending December 31, 2023[35]. - The revenue from value-added services for the three months ending December 31, 2023, was $59,928 thousand, an increase from $55,000 thousand in the previous quarter[37]. - The company experienced a net investment loss of $(25,544) thousand for the three months ending December 31, 2023, compared to a loss of $(16,905) thousand in the previous quarter[33].

Core Viewpoint - The article discusses the rise of AI-generated misinformation and the measures being taken by social media platforms in China to combat this issue, including the implementation of AI content labeling and stricter content moderation policies [1][5]. Group 1: AI Misinformation and Regulation - On March 11, Weibo announced a governance initiative targeting unmarked AI-generated content, focusing on areas such as social welfare, emergencies, medical science, and personal rights [1]. - Weibo will label content suspected to be AI-generated and may restrict account visibility or even ban accounts that repeatedly post unmarked AI content causing significant harm [1]. - Today's headlines reveal that platforms like Toutiao have also faced challenges with low-quality AI content, having removed over 930,000 such posts and penalized nearly 30,000 accounts for spreading false information [3]. Group 2: AI Content Production and Challenges - The emergence of "AI content farms" has been noted, with reports of individuals generating up to 19,000 AI-written articles daily, distributing them across thousands of accounts for profit [4]. - The cost of generating AI content is extremely low, with estimates showing that one article can be produced for as little as 0.000138 RMB, making it economically viable to flood the internet with AI-generated material [4]. - The challenge now lies in distinguishing between low-quality AI content and genuine articles, as the volume of AI-generated content increases [3][4]. Group 3: Implementation of AI Content Labeling - The requirement for AI content labeling is part of broader regulatory efforts, with new guidelines mandating that both AI service providers and social media platforms must clearly indicate AI-generated content [5]. - Major platforms like Douyin, Kuaishou, WeChat, Xiaohongshu, and Bilibili have begun requiring users to declare whether their content is AI-generated, although compliance has been inconsistent [5]. - The Cyberspace Administration of China has announced plans for a series of actions in 2025 aimed at addressing the misuse of AI technology and enhancing the identification of AI-generated content [5].

Core Viewpoint - Weibo Corporation will announce its unaudited financial results for Q4 and fiscal year 2024 on March 13, 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 create and post feeds with multimedia and long-form content, allowing for asymmetric user relationships where any user can follow others and engage with their content [3]. Advertising and Marketing Solutions - 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].

Financial Data and Key Metrics Changes - Weibo's total revenue for Q3 2024 reached $464.5 million, up 5% year-over-year, with ad revenue at $398.6 million, up 2% year-over-year, and VAS revenue at $65.9 million, up 25% year-over-year [13][49][56] - Non-GAAP operating income was $164.5 million, representing a non-GAAP operating margin of 35% [13][49] - Net income attributable to Weibo was $139.2 million, with a net margin of 30% [58] Business Line Data and Key Metrics Changes - Advertising and marketing revenues were $398.6 million, with mobile ad revenues contributing approximately 94% of total ad revenue [50] - VAS revenue growth was primarily driven by membership and games-related services, with a 25% increase [56] - The FMCG sector showed strong momentum in food and beverage and apparel, while the automotive sector continued to grow due to the shift towards electric vehicles [51][52] Market Data and Key Metrics Changes - In September 2024, Weibo's MAUs reached 587 million and average DAUs reached 257 million, reflecting a pullback from the Olympics peak [12][47] - The ad revenue from the food and beverage sector showed strong year-over-year growth, driven by the Olympics [33] - The automotive sector's ad revenue was bolstered by the transition to electric vehicles and effective content ecosystem cultivation [52][35] Company Strategy and Development Direction - Weibo is focusing on enhancing its hot trend marketing capabilities and content marketing to sustain high operating efficiency [43][44] - The company aims to optimize brand and performance-ad offerings to improve competitiveness and expand market share [44] - Weibo's strategy includes leveraging event-driven marketing models, particularly around major events like the Olympics, to attract advertisers [31][32] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the advertising market, anticipating a gradual recovery due to government stimulus measures [54][66] - There are expectations for double-digit growth in certain sectors due to national subsidy policies targeting consumer electronics [66] - Despite challenges in the luxury products and real estate sectors, management sees potential for growth in the food and beverage and automotive sectors [66][70] Other Important Information - The Paris Olympic Games significantly boosted Weibo's ad revenue, surpassing that of the Tokyo Olympics [20][33] - Weibo's cash, cash equivalents, and short-term investments totaled $2.2 billion as of September 30, 2024 [59] Q&A Session Summary Question: Fourth quarter advertisement outlook in light of macro stimulus - Management noted a slight decrease in consumer demand but remains optimistic about Q4 due to government policies aimed at boosting demand, particularly in the 3C and consumer electronics sectors [62][66] Question: Drivers behind VAS services growth and future expectations - Management highlighted the continuous growth of membership services and the focus on high-quality user acquisition as key drivers for VAS revenue growth [73][75] Question: Updates on AI progress in content production and operational efficiencies - Management reported significant improvements in operational efficiency through AI applications, including intelligent search functions and AI-assisted content generation for key accounts [80][82]

Investment Rating - The report maintains a "BUY" rating for Weibo, with a target price of US$15.00, reflecting a potential upside of 76.3% from the current price of US$8.51 [2][16]. Core Insights - Weibo's 3Q24 results exceeded expectations, with net revenue increasing by 5% YoY to US$465 million, driven by stabilization in advertising revenue and strong growth in VAS revenue [1][2]. - The company is cautiously optimistic about macroeconomic policy stimulus but anticipates a delayed impact on consumption and advertising demand [1][2]. - Advertising revenue in 3Q24 rose by 2% YoY to US$399 million, primarily due to growth in the food & beverage and automobile sectors, while some sectors like cosmetics and handsets faced challenges [1][2]. - VAS revenue grew significantly by 25% YoY in 3Q24, supported by enhanced membership services [1][2]. - The forecast for 4Q24 indicates a potential decline in advertising revenue by 4% YoY, attributed to a high-base effect and soft demand in certain verticals [1][2]. Financial Performance Summary - For FY24E, total revenue is projected at US$1,755 million, with adjusted net profit expected to be US$466.9 million [5][9]. - The non-GAAP operating profit margin (OPM) for 3Q24 was 35.4%, a decrease of 1.6 percentage points YoY, mainly due to increased sales and marketing expenses [1][2]. - The adjusted EPS for FY24E is estimated at US$1.97, with a gradual increase expected in subsequent years [5][9]. User Engagement Metrics - Monthly Active Users (MAUs) decreased by 3% YoY to 587 million as of September 2024, but the Daily Active Users (DAU) to MAU ratio improved to 43.8% [1][2]. - Total interactions on Weibo's front page increased significantly on a quarter-over-quarter basis, indicating improved user engagement [1][2].

Investment Rating - The report maintains a "BUY" rating for the company with a target price of US$15.00, down from the previous target of US$15.50, indicating a potential upside of 76.3% from the current price of US$8.51 [9]. Core Insights - The company reported a 5% year-over-year increase in net revenue for Q3 2024, reaching US$465 million, which exceeded Bloomberg consensus estimates by 7% [6]. - Advertising revenue grew by 2% year-over-year to US$399 million, primarily driven by strong performance in the food and beverage sector due to the Paris Olympics [7]. - The management remains cautiously optimistic about macroeconomic policy stimulus, although they believe the effects will take time to materialize [8]. Financial Performance Summary - For FY24E, the company expects revenue of US$1,755 million, with adjusted net profit projected at US$467 million and adjusted EPS at US$1.97 [12]. - The non-GAAP operating profit margin for Q3 2024 was 35.4%, a decline of 1.6 percentage points year-over-year, attributed to increased sales and marketing investments [8]. - The company anticipates a 4% decline in advertising revenue for Q4 2024 due to high base effects and weak demand in certain consumer-related verticals [8]. Revenue Breakdown - The company’s revenue for Q3 2024 was supported by a 25% increase in value-added services (VAS) revenue, which reached US$66 million [7]. - Monthly active users (MAUs) decreased by 3% year-over-year to 587 million, but the daily active users to monthly active users ratio improved to 43.8% [7]. Future Outlook - The management expects that the advertising business recovery will require more time, particularly in sectors like cosmetics and luxury goods, where demand has not shown significant improvement [8]. - The company is projected to benefit from policy stimulus and a gradual recovery in consumer spending, with a non-GAAP P/E ratio of 5x for FY25, indicating a favorable margin of safety [8].

Core Insights - Weibo Corporation reported revenue of $464.48 million for the quarter ended September 2024, reflecting a year-over-year increase of 5.1% and a positive surprise of 6.68% over the Zacks Consensus Estimate of $435.42 million [1] - The earnings per share (EPS) for the quarter was $0.53, down from $0.57 in the same quarter last year, but exceeded the consensus estimate of $0.46 by 15.22% [1] Financial Performance Metrics - Average daily active users (DAUs) were reported at 257 million, slightly below the estimated 257.95 million [3] - Monthly active users (MAUs) totaled 587 million, compared to the average estimate of 593.9 million [3] - Net revenues from value-added services reached $65.87 million, surpassing the average estimate of $57.82 million, marking a year-over-year increase of 24.6% [3] - Net revenues from advertising and marketing amounted to $398.62 million, exceeding the average estimate of $377.60 million, with a year-over-year growth of 2.4% [3] Stock Performance - Over the past month, Weibo's shares have declined by 5.6%, while the Zacks S&P 500 composite has increased by 0.6% [4] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [4]

Financial Performance - For Q3 2024, Weibo reported net revenue of $464.5 million, a 5% increase year-over-year from $442.2 million[10]. - Advertising and marketing revenue reached $398.6 million, up 2% from $389.3 million in the same quarter last year[10]. - Value-added services revenue grew by 25% year-over-year to $65.9 million, driven by upgrades in membership services[10]. - Operating profit for Q3 2024 was $141.3 million, maintaining an operating margin of 30%[4]. - Net profit attributable to Weibo shareholders was $130.6 million, with diluted earnings per share of $0.50, compared to $77.5 million and $0.32 in the same quarter last year[5]. - Non-GAAP operating profit was $164.5 million, with a non-GAAP operating margin of 35%[5]. - The company experienced a non-operating profit of $23.6 million in Q3 2024, compared to a non-operating loss of $28.4 million in the same period last year[11]. - Total costs and expenses for Q3 2024 were $323.2 million, a 5% increase from $308.2 million in the previous year[10]. - Total net revenue for the three months ended September 30, 2023, was $442.151 million, a slight increase from $437.873 million in the previous quarter[22]. - Advertising and marketing revenue for the same period was $389.301 million, compared to $375.277 million in the previous quarter, reflecting a growth of approximately 3%[22]. - Net profit attributable to Weibo shareholders for the three months ended September 30, 2023, was $77.489 million, down from $111.931 million in the previous quarter, indicating a decrease of about 31%[22]. - Operating profit for the three months ended September 30, 2023, was $133.986 million, compared to $135.385 million in the previous quarter, showing a marginal decline[22]. - The total cost and expenses for the three months ended September 30, 2023, amounted to $308.165 million, an increase from $302.488 million in the previous quarter[22]. - The company reported a decrease in value-added services revenue to $52.850 million for the three months ended September 30, 2023, down from $62.596 million in the previous quarter[22]. User Engagement - Monthly active users reached 587 million in September 2024, while daily active users averaged 257 million[6][7]. - The company anticipates continued focus on enhancing its advertising and marketing solutions to improve user engagement and revenue generation[20]. - Weibo is actively working on refining its social interest graph recommendation engine to better target audiences based on demographics and interests[18]. - The company faces risks related to user engagement and competition in the advertising market, which may impact future financial performance[20]. Cash and Investments - Total cash, cash equivalents, and short-term investments amounted to $2.2 billion as of September 30, 2024[12]. - Cash and cash equivalents decreased from $2,584,635 thousand at the end of 2023 to $1,203,977 thousand by September 30, 2024[26]. - Total assets decreased from $7,280,358 thousand at the end of 2023 to $6,625,116 thousand by September 30, 2024[29]. - The total liabilities decreased from $3,762,742 thousand at the end of 2023 to $2,947,175 thousand by September 30, 2024[29]. - Long-term investments increased from $1,320,386 thousand at the end of 2023 to $1,445,467 thousand by September 30, 2024[26]. - The company’s total equity attributable to Weibo shareholders increased from $3,398,735 thousand at the end of 2023 to $3,583,469 thousand by September 30, 2024[29]. Future Outlook - The company expects future revenue growth driven by increased advertising and value-added services[38]. - The revenue from value-added services is projected to reach $185,007 thousand for the nine months ending September 30, 2024, indicating a positive growth trend[38]. - The company is focusing on expanding its advertising client base beyond Alibaba to enhance revenue streams[38]. - New product and technology developments are expected to support market expansion and improve service offerings in the upcoming quarters[38].

Group 1 - Analysts project Weibo Corporation (WB) will announce quarterly earnings of $0.46 per share, a decline of 19.3% year over year [1] - Revenues are expected to reach $435.42 million, declining 1.5% from the same quarter last year [1] - There has been no revision in the consensus EPS estimate over the last 30 days, indicating analysts' reconsideration of their initial forecasts [1] Group 2 - The estimate for 'Net revenues- Value-added service' is projected at $57.82 million, reflecting a year-over-year change of -3.9% [4] - 'Net revenues- Advertising and marketing' are expected to be $377.60 million, indicating a change of -4% from the prior-year quarter [4] Group 3 - The average prediction for 'Average daily active users (DAUs)' is 257.95 million, down from 260 million in the same quarter last year [5] - 'Monthly active users (MAUs)' are expected to be 593.90 million, compared to 605 million a year ago [5] - Weibo shares have returned -11.8% over the past month, contrasting with the Zacks S&P 500 composite's +3.1% change [5]