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Weibo Reports First Quarter 2017 Financial Results

May 16, 2017

BEIJING, May 16, 2017 /PRNewswire/ --

Weibo Corporation ("Weibo" or the "Company") (NASDAQ: WB), a leading social media in China, today announced its unaudited financial results for the first quarter ended March 31, 2017.

First Quarter 2017 Highlights

  • Net revenues totaled $199.2 million, an increase of 67% year-over-year, exceeding the Company's guidance between $185 million and $190 million.
  • Advertising and marketing revenues were $169.3 million, an increase of 71% year-over-year.
  • Other revenues were $29.9 million, an increase of 49% year-over-year.
  • Net income attributable to Weibo was $46.9 million, an increase of 561% year-over-year, and diluted net income per share was $0.21, compared to $0.03 for the same period last year.
  • Non-GAAP net income attributable to Weibo was $57.8 million, an increase of 254% year-over-year, and non-GAAP diluted net income per share was $0.26, compared to $0.07 for the same period last year.
  • Adjusted EBITDA was $70.5 million, an increase of 272% year-over-year, or 35% of net revenues, compared to 16% for the same period last year.
  • Monthly active users ("MAUs") in March 2017 was 340 million, an increase of 30% year-over-year, 91% of which were mobile users. Average daily active users in March 2017 was 154 million, an increase of 28% year-over-year.

"Our relentless focus to build the best social media experience in China is reflected in Weibo's strong performance in the first quarter of 2017, with revenues growing 67% year over year, or 76% on a constant currency basis, adjusted EBITDA margin reaching 35% and MAUs reaching 340 million," said Gaofei Wang, Weibo's CEO. "Looking ahead, we continue to see strong momentum, as we further optimize Weibo to share, discover and consume information, especially for the mobile, social and video environment."

First Quarter 2017 Financial Results

For the first quarter of 2017, Weibo reported net revenues of $199.2 million, compared to $119.3 million for the same period last year. Advertising and marketing revenues totaled $169.3 million, compared to $99.2 million for the same period last year; and advertising and marketing revenues from small & medium-sized enterprises ("SMEs") and key accounts were $161.5 million, compared to $88.1 million for the same period last year. Other revenues totaled $29.9 million, compared to $20.0 million for the same period last year.

Costs and expenses for the first quarter of 2017 totaled $143.4 million, compared to $112.1 million for the same period last year. Non-GAAP costs and expenses were $132.5 million, compared to $103.4 million for the same period last year. The increase in non-GAAP costs and expenses was primarily due to an increase in marketing expenses, as well as an increase in turnover taxes resulting from higher revenues.

Income from operations for the first quarter of 2017 was $55.9 million, compared to $7.2 million for the same period last year. Non-GAAP income from operations was $66.7 million, compared to $15.9 million for the same period last year. 

Non-operating income for the first quarter of 2017 was $2.1 million, compared to $0.6 million for the same period last year. Income tax expenses were $11.3 million, compared to $0.5 million for the same period last year, primarily due to higher profitability and the change in tax status of the Company's PRC subsidiary from being fully tax exempted to being subject to 50% of the enterprise income tax rate in 2017.

Net income attributable to Weibo for the first quarter of 2017 was $46.9 million, or diluted net income per share of $0.21, compared to $7.1 million for the same period last year, or diluted net income per share of $0.03. Non-GAAP net income attributable to Weibo for the first quarter of 2017 was $57.8 million, or diluted net income per share of $0.26, compared to $16.4 million for the same period last year, or diluted net income per share of $0.07.

As of March 31, 2017, Weibo's cash, cash equivalents and short-term investments totaled $444.2 million. For the first quarter of 2017, cash provided by operating activities was $72.5 million, capital expenditures totaled $4.5 million, and depreciation and amortization expenses amounted to $3.4 million.

Business Outlook

For the second quarter of 2017, Weibo estimates that its net revenues to be between $240 million and $250 million, which assumes a RMB to US dollar average exchange rate of 6.9. This forecast reflects Weibo's current and preliminary view, which is subject to change.

Conference Call

Weibo's management team will host a conference call from 7 AM -- 8 AM Eastern Time on May 16, 2017 (or 7 PM -- 8 PM Beijing Time on May 16, 2017) to present an overview of the Company's financial performance and business operations. A live webcast of the call will be available through the Company's corporate website at http://ir.weibo.com. The conference call can be accessed as follows:

US Toll Free:  +1 866-519-4004
Hong Kong Toll Free:  800-906-601
China Toll Free:  400-620-8038
International:  +65 6713-5090
Passcode for all regions:  18358362

A replay of the conference call will be available through midnight, Eastern Time on May 23, 2017. The dial-in number is +61 2-8199-0299. The passcode for the replay is 18358362.

Non-GAAP Financial Measures

This release contains the following non-GAAP financial measures: non-GAAP costs and expenses, non-GAAP income from operations, non-GAAP net income attributable to Weibo, non-GAAP diluted net income per share attributable to Weibo and adjusted EBITDA. These non-GAAP financial measures should be considered in addition to, not as a substitute for, measures of the Company's financial performance prepared in accordance with U.S. GAAP.

The Company's non-GAAP financial measures exclude stock-based compensation, amortization of intangible assets, net gain on the sale of investments and impairment on investments, non-GAAP to GAAP reconciling items for the loss attributable to non-controlling interest, and provision for income tax related to the amortization of intangible assets (other non-GAAP to GAAP reconciling items have no tax effect). Adjusted EBITDA excludes interest income, income tax expenses, and depreciation expenses. The Company's management uses these non-GAAP financial measures in their financial and operating decision-making, because management believes these measures reflect the Company's ongoing operating performance in a manner that allows more meaningful period-to-period comparisons. The Company believes that these non-GAAP financial measures provide useful information to investors and others in the following ways: (i) in comparing the Company's current financial results with the Company's past financial results in a consistent manner, and (ii) in understanding and evaluating the Company's current operating performance and future prospects in the same manner as management does, if they so choose. The Company also believes that the non-GAAP financial measures provide useful information to both management and investors by excluding certain expenses, gains (losses) and other items (i) that are not expected to result in future cash payments or (ii) that are non-recurring in nature or may not be indicative of the Company's core operating results and business outlook.

Use of non-GAAP financial measures has limitations. The Company's non-GAAP financial measures do not include all income and expense items that affect the Company's operations.  They may not be comparable to non-GAAP financial measures used by other companies.  Accordingly, care should be exercised in understanding how the Company defines its non-GAAP financial measures. Reconciliations of the Company's non-GAAP financial measures to the nearest comparable GAAP measures are set forth in the section below titled "Unaudited Reconciliation of Non-GAAP to GAAP Results."

About Weibo

Weibo is a leading social media for people to create, share and discover Chinese-language content. It provides an unprecedented and simple way for people and organizations to publicly express themselves in real time, interact with others and stay connected with the world. Any user can post a feed and attach multi-media or long-form content. User relationships on Weibo may be asymmetric; any user can follow any other user and add comments to a feed while reposting. This simple, asymmetric and distributed nature of Weibo allows an original feed to become a live viral conversation stream.

Weibo enables its advertising and marketing customers to promote their brands, products and services to users. Weibo offers a wide range of advertising and marketing solutions to its customers, ranging from large companies to small and medium-sized enterprises to individuals. The Company generates a substantial majority of revenues from the sale of advertising and marketing services, including the sale of social display ads and promoted feeds. Weibo has developed and is continuously refining its social interest graph recommendation engine, which enables its customers to perform people marketing and target audiences based on user demographics, social relationships, interests and behaviors, to achieve greater relevance, engagement and marketing effectiveness.

Safe Harbor Statement

This press release contains forward-looking statements that relate to, among other things, Weibo's expected financial performance and strategic and operational plans (as described, without limitation, in the "Business Outlook" section and in quotations from management in this press release. Weibo may also make forward-looking statements in the Company's periodic reports to the U.S. Securities and Exchange Commission ("SEC"), in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. These forward-looking statements can be identified by terminology, such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "confidence," "estimates" and similar statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, Weibo's limited operating history in certain new businesses; failure to grow active user base and the level of user engagement; the uncertain regulatory landscape in China; fluctuations in the Company's quarterly operating results; the Company's reliance on advertising and marketing sales for a majority of its revenues; failure to successfully develop, introduce, drive adoption of or monetize new features and products; failure to compete effectively for advertising and marketing spending; failure to successfully integrate acquired businesses; risks associated with the Company's investments, including equity pick-up and impairment; failure to compete successfully against new entrants and established industry competitors; changes in the macro-economic environment, including the depreciation of the Renminbi; and adverse changes in economic and political policies of the PRC government and its impact on the Chinese economy. Further information regarding these and other risks is included in Weibo's annual report on Form 20-F for the fiscal year ended December 31, 2016 filed with the SEC on April 27, 2017 and other filings with the SEC. All information provided in this press release is current as of the date hereof, and Weibo assumes no obligation to update such information, except as required under applicable law.

Contact:
Investor Relations
Weibo Corporation
Phone: +86 10 5898-3017
Email: ir@staff.weibo.com

WEIBO CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)






















Three months ended





March 31,


December 31,





2017


2016


2016











Net revenues:








     Advertising and marketing revenues


$        169,297


$         99,246


$       187,870


     Other revenues


29,904


20,044


24,878



Total net revenues


199,201


119,290


212,748











Costs and expenses:








     Cost of revenues (a)


46,450


36,626


49,454


     Sales and marketing (a)


47,163


30,041


48,006


     Product development (a)


39,191


36,934


39,869


     General and administrative (a)


10,546


8,538


11,762



Total costs and expenses


143,350


112,139


149,091


Income from operations


55,851


7,151


63,657











Non-operating income (loss):








    Gain on sale of and impairment on investments, net


(122)


(868)


(24,232)


    Interest and other income , net


2,222


1,420


2,885





2,100


552


(21,347)











Income before income tax expenses


57,951


7,703


42,310


     Income tax expenses


(11,316)


(548)


(55)


Net income


46,635


7,155


42,255











    Less: Net income (loss) attributable to
    noncontrolling interest

(296)


57


(715)











Net income attributable to Weibo

$          46,931


$           7,098


$         42,970




















Basic net income per share attributable to Weibo

$             0.21


$             0.03


$            0.20


Diluted net income per share attributable to Weibo

$             0.21


$             0.03


$            0.19











Shares used in computing basic








   net income per share attributable to Weibo

218,296


212,269


217,464


Shares used in computing diluted








   net income per share attributable to Weibo

224,632


219,626


224,359











(a) Stock-based compensation in each category:









Cost of revenues


$              695


$              508


$              801



Sales and marketing


1,604


1,018


1,655



Product development


4,994


3,555


3,716



General and administrative


3,400


3,406


3,547


 

WEIBO CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)















March 31,


December 31,







2017


2016












Assets


Current assets:









Cash and cash equivalents


$             225,734


$             364,766





Short-term investments


218,469


31,188





Accounts receivable, net


129,914


116,054





Prepaid expenses and other current assets


127,813


66,664





Amount due from SINA


4,962


18,565





      Current assets subtotal


706,892


597,237












Property and equipment, net


23,935


22,816



Goodwill and intangible assets, net


11,453


11,366



Investments


420,674


399,933



Other assets


7,588


5,592



Total assets


$          1,170,542


$          1,036,944












Liabilities and Shareholders' Equity 


Liabilities:








Current liabilities:









Accounts payable


$               60,323


$               48,997





Accrued and other liabilities


232,993


180,142





Deferred revenues


57,056


48,964





     Current liabilities subtotal


350,372


278,103













Long-term liability


1,356


1,483





Total liabilities


351,728


279,586












Shareholders' equity :








Weibo shareholders' equity 


814,949


753,225




Non-controlling interest


3,865


4,133





Total shareholders' equity 


818,814


757,358












Total liabilities and shareholders' equity 


$          1,170,542


$          1,036,944











 

 

WEIBO CORPORATION

UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS

(In thousands, except per share data)



























Three months ended






March 31, 2017


March 31, 2016


December 31, 2016




























Non-GAAP






Non-GAAP






Non-GAAP






Actual


Adjustments


Results


Actual


Adjustments


Results


Actual


Adjustments


Results
























Advertising and marketing revenues


$    169,297




$    169,297


$      99,246




$      99,246


$    187,870




$    187,870


Other revenues


29,904




29,904


20,044




20,044


24,878




24,878



Net revenues


$    199,201




$    199,201


$    119,290




$    119,290


$    212,748




$    212,748






























(10,693)

 (a) 





(8,487)

 (a) 





(9,719)

 (a) 









(155)

 (b) 





(241)

 (b) 





(154)

 (b) 



Total costs and expenses


$    143,350


$    (10,848)


$    132,502


$    112,139


$       (8,728)


$    103,411


$    149,091


$       (9,873)


$    139,218






























10,693

 (a) 





8,487

 (a) 





9,719

 (a) 









155

 (b) 





241

 (b) 





154

 (b) 



Income from operations


$      55,851


$      10,848


$      66,699


$        7,151


$        8,728


$      15,879


$      63,657


$        9,873


$      73,530






























10,693

 (a) 





8,487

 (a) 





9,719

 (a) 









155

 (b) 





241

 (b) 





154

 (b) 









122

 (c) 





868

 (c) 





24,232

 (c) 









(29)

 (d) 





(280)

 (d) 





(72)

 (d) 









(39)

 (e) 





(60)

 (e) 





(39)

 (e) 



Net income attributable to Weibo

$      46,931


$      10,902


$      57,833


$        7,098


$        9,256


$      16,354


$      42,970


$      33,994


$      76,964
























Diluted net income per share attributable to Weibo

$           0.21




$           0.26


$           0.03




$           0.07


$           0.19




$           0.34
























Shares used in computing  diluted




















    net income per share attributable to Weibo

224,632




224,632


219,626




219,626


224,359




224,359
























Adjusted EBITDA:











































Non-GAAP net income attributable to Weibo





$      57,833






$      16,354






$      76,964




Interest income






(1,911)






(1,300)






(2,158)




Income tax expenses






11,355






608






94




Depreciation expenses






3,245






3,300






3,338



Adjusted EBITDA






$      70,522






$      18,962






$      78,238
























(a)  To exclude stock-based compensation.


















(b)  To exclude amortization of intangible assets.


















(c)  To exclude net gain on the sale of investments and impairment on investments.














(d)  To exclude Non-GAAP to GAAP reconciling items for the loss attributable to non-controlling interests.












(e)  To exclude the provision for income tax related to item (b). Other non-GAAP to GAAP reconciling items have no income tax effect.










      Most of the reconciliation items were recorded in entities in tax free jurisdictions hence no income tax implications. 

      For impairment on investments, valuation allowances were made for those differences the Company does not expect to realize the benefit in the foreseeable future.













































 

 

WEIBO CORPORATION

UNAUDITED ADDITIONAL INFORMATION

(In thousands)













Three months ended





March 31,


December 31,





2017


2016


2016











Net revenues









Advertising and marketing revenues









     Small & medium-sized enterprises and key accounts


$      161,506


$        88,126


$        163,187



     Alibaba


7,791


11,120


24,683



         Subtotal


169,297


99,246


187,870












Other revenues


29,904


20,044


24,878





$      199,201


$      119,290


$        212,748


To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/weibo-reports-first-quarter-2017-financial-results-300458256.html

SOURCE Weibo