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Weibo Reports Second Quarter 2019 Unaudited Financial Results

BEIJING, Aug. 19, 2019 /PRNewswire/ -- Weibo Corporation ("Weibo" or the "Company") (NASDAQ: WB), a leading social media in China, today announced its unaudited financial results for the second quarter ended June 30, 2019.

"Weibo delivered strong user performance this quarter," said Gaofei Wang, CEO of Weibo. "We are delighted to see a notable acceleration in user growth from prior quarter and robust user engagement trends, underpinned by our strengthened social network effect as well as the consistent efforts in user product upgrade and optimization. On monetization, we continued to showcase unique value proposition to advertisers, leveraging the ongoing ad product evolution to mobile, social and video," said Mr. Wang.

Second Quarter 2019 Highlights

  • Net revenues increased 1% year-over-year to $431.8 million, representing an increase of 7% on a constant currency basis [1].
  • Advertising and marketing revenues were $370.7 million, flattish year-over-year.
  • Value-added service ("VAS") revenues increased 8% year-over-year to $61.2 million.
  • Net income attributable to Weibo was $103.0 million, compared to $140.9 for the same period last year, and diluted net income per share was $0.46, compared to $0.62 for the same period last year.
  • Non-GAAP net income attributable to Weibo was $156.4 million, and non-GAAP diluted net income per share was $0.68, both flat year-over-year.
  • Monthly active users ("MAUs") were 486 million in June 2019, a net addition of approximately 55 million users year-over-year. Mobile MAUs represented approximately 94% of MAUs.
  • Average daily active users ("DAUs") were 211 million in June 2019, a net addition of approximately 21 million users year-over-year.

 

[1] On a constant currency (non-GAAP) basis, we assume that the exchange rate in the second quarter of 2019 had been the same as it was in the second quarter of 2018, or RMB6.40=US$1.00.

Second Quarter 2019 Financial Results

For the second quarter of 2019, Weibo's total net revenues were $431.8 million, an increase of 1% compared to $426.6 million for the same period last year.

Advertising and marketing revenues for the second quarter of 2019 were $370.7 million, compared to $369.9 million for the same period last year. Advertising and marketing revenues from small & medium-sized enterprises ("SMEs") and key accounts ("KAs") were $346.5 million, representing an increase of 2% compared to $338.7 million for same period last year.

VAS revenues for the second quarter of 2019 were $61.2 million, an increase of 8% year-over-year compared to $56.6 million for the same period last year. The increase was mainly attributable to the revenues derived from the live streaming business acquired in the fourth quarter of 2018, and was partially offset by the decrease in gaming revenues.

Costs and expenses for the second quarter of 2019 totaled $280.6 million, compared to $271.7 million for the same period last year. Non-GAAP costs and expenses were $265.6 million, compared to $259.3 million for the same period last year.

Income from operations for the second quarter of 2019 was $151.3 million, compared to $154.9 million for the same period last year. Non-GAAP income from operations was $166.2 million, compared to $167.3 million for the same period last year.

Non-operating loss for the second quarter of 2019 was $24.0 million, compared to an income of $10.9 million for the same period last year. Non-operating loss for the second quarter of 2019 included investment related impairment of $31.7 million, which is excluded under non-GAAP measures.

Income tax expenses for the second quarter were $26.1million, compared to $25.1 million for the same period last year.

Net income attributable to Weibo for the second quarter of 2019 was $103.0 million, compared to $140.9 million for the same period last year. Diluted net income per share attributable to Weibo for the second quarter of 2019 was $0.46, compared to $0.62 for the same period last year. Non-GAAP net income attributable to Weibo for the second quarter of 2019 was $156.4 million, compared to $156.1 million for the same period last year. Non-GAAP diluted net income per share attributable to Weibo for the second quarter of 2019 was $0.68, compared to $0.68 for the same period last year.

As of June 30, 2019, Weibo's cash, cash equivalents and short-term investments totaled $1.56 billion. For the second quarter of 2019, cash provided by operating activities was $132.8 million, capital expenditures totaled $3.2 million, and depreciation and amortization expenses amounted to $6.7 million.

Other Development

On July 5, 2019, the Company completed the offering of US$800 million in aggregate principal amount of senior notes due 2024 (the "Notes"). The Notes were issued at par value and bear annual interest at a rate of 3.500% per year, payable semiannually in arrears on January 5 and July 5 of each year, beginning on January 5, 2020. The Notes will mature on July 5, 2024, unless previously repurchased or redeemed in accordance with their terms prior to maturity.

Business Outlook

For the third quarter of 2019, Weibo estimates its net revenues to increase 6% year-over-year to 9% year over year on a constant currency basis. 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 7AM8AM Eastern Time on August 19, 2019 (or 7PM8PM Beijing Time on August 19, 2019) 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: 

400-620-8038

International: 

+65 6713-5090

Passcode for all regions:

7349347

A replay of the conference call will be available from 22:00 China Standard Time on August 19, 2019 to 21:59 China Standard Time on August 27, 2019. The dial-in number is +61 2-8199-0299. The passcode for the replay is 7349347.

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 results of impairment on, gain/loss on sale of and fair value change of investments, non-GAAP to GAAP reconciling items on the share of equity method investments, non-GAAP to GAAP reconciling items for the income/loss attributable to non-controlling interests, provision for income tax related to the amortization of intangible assets (other non-GAAP to GAAP reconciling items have no tax effect), and amortization of convertible debt issuance cost. Adjusted EBITDA excludes interest income, net, 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 content online. Weibo combines the means of public self-expression in real time with a powerful platform for social interaction, content aggregation and content distribution. Any user can create and post a feed and attach multi-media and 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 companies of all sizes. The Company generates a substantial majority of its revenues from the sale of advertising and marketing services, including the sale of social display advertisement and promoted marketing offerings. Designed with a "mobile first" philosophy, Weibo displays content in a simple information feed format and offers native advertisement that conform to the information feed on our platform. To support the mobile format, we have developed and continuously refining our social interest graph recommendation engine, which enables our 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-Fs 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 5898-3336
Email: ir@staff.weibo.com

 

 

WEIBO CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)




























Three months ended


Six months ended




June 30,


March 31,


June 30,




2019


2018


2019


2019


2018













Net revenues:











     Advertising and marketing


$             370,660


$             369,942


$             341,141


$             711,801


$             672,891

     Value-added service


61,176


56,647


58,036


119,212


103,581


Net revenues


431,836


426,589


399,177


831,013


776,472













Costs and expenses:











     Cost of revenues (1)


81,972


61,790


82,817


164,789


124,692

     Sales and marketing (1)


106,405


139,977


106,151


212,556


245,840

     Product development(1)


70,368


60,613


69,853


140,221


121,136

     General and administrative(1)


21,825


9,313


17,287


39,112


20,529


Total costs and expenses


280,570


271,693


276,108


556,678


512,197

Income from operations


151,266


154,896


123,069


274,335


264,275













Non-operating income (loss):























    Impairment on, gain/loss on sale of and
        fair value change of investments, net 


(41,954)


(1,535)


37,797


(4,157)


(3,034)

    Interest and other income , net


17,999


12,481


10,781


28,780


21,609




(23,955)


10,946


48,578


24,623


18,575













Income before income tax expenses


127,311


165,842


171,647


298,958


282,850

     Income tax expenses


(26,073)


(25,148)


(21,073)


(47,146)


(43,445)













Net income


101,238


140,694


150,574


251,812


239,405













    Less: Net income (loss) attributable to
    non-controlling interests

(1,758)


(220)


132


(1,626)


(594)













Net income attributable to Weibo

$             102,996


$             140,914


$             150,442


$             253,438


$             239,999

























Basic net income per share attributable to Weibo

$                    0.46


$                    0.63


$                    0.67


$                    1.13


$                    1.08

Diluted net income per share attributable to Weibo

$                    0.46


$                    0.62


$                    0.66


$                    1.12


$                    1.06













Shares used in computing basic











   net income per share attributable to Weibo

225,262


223,542


224,924


225,094


223,224

Shares used in computing diluted











   net income per share attributable to Weibo

226,277


232,768


232,894


226,210


225,995

























(1) Stock-based compensation in each category:












Cost of revenues


$                 1,118


$                 1,445


$                 1,112


$                 2,230


$                 2,456


Sales and marketing


2,129


2,831


2,039


4,168


4,799


Product development


6,618


6,064


6,058


12,676


11,115


General and administrative


4,269


1,908


3,686


7,955


4,892

 

 

WEIBO CORPORATION


UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS


(In thousands)
















June 30,


December 31,







2019


2018











Assets



Current assets:









Cash and cash equivalents


$                        961,340


$                     1,234,596





Short-term investments


598,466


591,269





Accounts receivable, net


465,635


369,093





Prepaid expenses and other current assets


285,937


168,821





Amount due from SINA(1)


328,692


105,319





      Current assets subtotal


2,640,070


2,469,098












Property and equipment, net


43,672


45,623



Goodwill and intangible assets, net


48,851


50,449



Long-term investments


907,181


694,586



Other assets(2)


28,362


14,926



Total assets


$                     3,668,136


$                     3,274,682











Liabilities and Shareholders' Equity 



Liabilities:









Current liabilities:









Accounts payable


$                        133,251


$                        123,730





Accrued expenses and other current liabilities(2)


412,979


317,437





Deferred revenues


121,438


99,994





Income tax payable


69,418


88,683





     Current liabilities subtotal


737,086


629,844













Long-term liabilities:









Convertible debt


886,195


884,123





Other long-term liabilities(2)


20,672


12,577





     Total liabilities


1,643,953


1,526,544












Shareholders' equity :








Weibo shareholders' equity 


2,025,404


1,745,459




Non-controlling interests


(1,221)


2,679





Total shareholders' equity 


2,024,183


1,748,138












Total liabilities and shareholders' equity 


$                     3,668,136


$                     3,274,682












(1) Included short-term loans to SINA of $235.0 million as of June 30, 2019 and $43.6 million as of December 31, 2018.











(2) The Company adopted the new leasing guidance (ASU 2016-2) started from January 1, 2019, which requires that a lessee
recognize the assets and liabilities that arise from operating leases. The Company recognized a right-of-use asset and a liability
relating to lease payments (the Lease Liability) in the statements of financial position for lease contracts having terms beyond 12
months period. The adoption of new leasing guidance resulted in recognition of $13.0 million of right-of-use asset and a total of
$13.7 million of leasing liability as of June 30, 2019.





 

 

WEIBO CORPORATION

UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS

(In thousands, except per share data)



























Three months ended






June 30, 2019


June 30, 2018


March 31, 2019
























Non-GAAP






Non-GAAP






Non-GAAP






Actual


Adjustments


Results


Actual


Adjustments


Results


Actual


Adjustments


Results
























Advertising and marketing


$          370,660




$          370,660


$       369,942




$       369,942


$       341,141




$       341,141


Value-added service


61,176




61,176


56,647




56,647


58,036




58,036



Net revenues


$          431,836




$          431,836


$       426,589




$       426,589


$       399,177




$       399,177




















































(14,134)

 (a) 





(12,248)

 (a) 





(12,895)

 (a) 









(849)

 (b) 





(164)

 (b) 





(860)

 (b) 



Total costs and expenses


$          280,570


$        (14,983)


$          265,587


$       271,693


$        (12,412)


$       259,281


$       276,108


$        (13,755)


$       262,353




















































14,134

 (a) 





12,248

 (a) 





12,895

 (a) 









849

 (b) 





164

 (b) 





860

 (b) 



Income from operations


$          151,266


$          14,983


$          166,249


$       154,896


$          12,412


$       167,308


$       123,069


$          13,755


$       136,824




















































14,134

 (a) 











12,895

 (a) 









849

 (b) 





12,248

 (a) 





860

 (b) 









41,954

 (c) 





164

 (b) 





(37,797)

 (c) 









(2,820)

 (d) 





1,535

 (c) 





1,249

 (d) 









(1,588)

 (e) 





277

 (e) 





(45)

 (e) 









(127)

 (f) 





(41)

 (f) 





(126)

 (f) 









1,037

 (g) 





1,035

 (g) 





1,035

 (g) 



Net income attributable to Weibo

$          102,996


$          53,439


$          156,435


$       140,914


$          15,218


$       156,132


$       150,442


$        (21,929)


$       128,513
























Diluted net income per share attributable to Weibo

$                 0.46




$                 0.68

*

$              0.62

*



$              0.68

*

$              0.66

*



$              0.56

*























Shares used in computing  diluted




















    net income per share attributable to Weibo

226,277


6,754

 (h) 

233,031


232,768




232,768


232,894




232,894
























Adjusted EBITDA:











































Non-GAAP net income attributable to Weibo





$          156,435






$       156,132






$       128,513




Interest income,net






(15,648)






(12,604)






(14,208)




Income tax expenses






26,200






25,189






21,199




Depreciation expenses






5,891






4,626






5,305



Adjusted EBITDA






$          172,878






$       173,343






$       140,809


 

 

WEIBO CORPORATION

UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS

(In thousands, except per share data)



























Six months ended












June 30, 2019


June 30, 2018
















Non-GAAP






Non-GAAP












Actual


Adjustments


Results


Actual


Adjustments


Results






























Advertising and marketing


$          711,801




$          711,801


$       672,891




$       672,891








Value-added service


119,212




119,212


103,581




103,581









Net revenues


$          831,013




$          831,013


$       776,472




$       776,472


























































(27,029)

 (a) 





(23,262)

 (a) 















(1,709)

 (b) 





(333)

 (b) 









Total costs and expenses


$          556,678


$        (28,738)


$          527,940


$       512,197


$        (23,595)


$       488,602
















































































27,029

 (a) 





23,262

 (a) 















1,709

 (b) 





333

 (b) 









Income from operations


$          274,335


$          28,738


$          303,073


$       264,275


$          23,595


$       287,870






































































































27,029

 (a) 





















1,709

 (b) 





23,262

 (a) 















4,157

 (c) 





333

 (b) 















(1,571)

 (d) 





3,034

 (c) 















(1,633)

 (e) 





159

 (e) 















(253)

 (f) 





(83)

 (f) 















2,072

 (g) 





2,070

 (g) 









Net income attributable to Weibo

$          253,438


$          31,510


$          284,948


$       239,999


$          28,775


$       268,774






























Diluted net income per share attributable to Weibo

$                 1.12




$                 1.25

*

$              1.06




$              1.18

*





























Shares used in computing  diluted




















    net income per share attributable to Weibo

226,210


6,753

 (h) 

232,963


225,995


6,753

 (h) 

232,748






























Adjusted EBITDA:











































Non-GAAP net income attributable to Weibo





$          284,948






$       268,774










Interest income, net






(29,856)






(23,513)










Income tax expenses






47,399






43,528










Depreciation expenses






11,196






9,147









Adjusted EBITDA






$          313,687






$       297,936




















































(a)  To exclude stock-based compensation.




















(b)  To exclude amortization of intangible assets.



















(c)  To exclude net results of impairment on, gain/loss on sale of and fair value change of investments.















(d)  To exclude the non-GAAP to GAAP reconciling items on the share of equity method investments.















(e)  To exclude non-GAAP to GAAP reconciling items for the income/loss attributable to non-controlling interests.














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












    The Company considered the tax implication arising from the reconciliation items and part of these items recorded in entities in tax free jurisdictions were without relevant tax implications.

     For impairment on investments, valuation allowances were made for those differences the Company does not expect they can be realized in the foreseeable future.

(g)  To exclude the amortization of convertible debt issuance cost. 


















(h)  To adjust the number of shares for dilution resulted from convertible debt which were anti-dilutive under GAAP measures.













*  Net income attributable to Weibo is adjusted for interest expense of convertible debt for calculating diluted EPS.














 

 

WEIBO CORPORATION

UNAUDITED ADDITIONAL INFORMATION

(In thousands)















Three months ended


Six months ended




June 30,


March 31,


June 30,




2019


2018


2019


2019


2018














Net revenues












Advertising and marketing












     Small & medium-sized enterprises and key accounts

$          346,541


$        338,662


$            324,506


$          671,047


$        615,275



     Alibaba

24,119


31,280


16,635


40,754


57,616



         Subtotal

370,660


369,942


341,141


711,801


672,891















Value-added service

61,176


56,647


58,036


119,212


103,581




$          431,836


$        426,589


$            399,177


$          831,013


$        776,472


 

 

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SOURCE Weibo Corporation

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