WB(WB) - 2025 Q1 - Earnings Call Transcript

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]