Document and Entity Information |
12 Months Ended |
|---|---|
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Dec. 31, 2015
shares
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| Entity Registrant Name | WEIBO Corp |
| Entity Central Index Key | 0001595761 |
| Document Type | 20-F |
| Document Period End Date | Dec. 31, 2015 |
| Amendment Flag | false |
| Current Fiscal Year End Date | --12-31 |
| Entity Well-known Seasoned Issuer | No |
| Entity Voluntary Filers | No |
| Entity Current Reporting Status | Yes |
| Entity Filer Category | Accelerated Filer |
| Document Fiscal Year Focus | 2015 |
| Document Fiscal Period Focus | FY |
| Class A ordinary shares | |
| Entity Common Stock, Shares Outstanding | 96,168,168 |
| Class B ordinary shares | |
| Entity Common Stock, Shares Outstanding | 116,009,222 |
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- Definition End date of current fiscal year in the format --MM-DD. No definition available.
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- Definition This is focus fiscal period of the document report. For a first quarter 2006 quarterly report, which may also provide financial information from prior periods, the first fiscal quarter should be given as the fiscal period focus. Values: FY, Q1, Q2, Q3, Q4, H1, H2, M9, T1, T2, T3, M8, CY. No definition available.
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- Definition This is focus fiscal year of the document report in CCYY format. For a 2006 annual report, which may also provide financial information from prior periods, fiscal 2006 should be given as the fiscal year focus. Example: 2006. No definition available.
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- Definition The end date of the period reflected on the cover page if a periodic report. For all other reports and registration statements containing historical data, it is the date up through which that historical data is presented. If there is no historical data in the report, use the filing date. The format of the date is CCYY-MM-DD. No definition available.
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- Definition The type of document being provided (such as 10-K, 10-Q, 485BPOS, etc). The document type is limited to the same value as the supporting SEC submission type, or the word "Other". No definition available.
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- Definition A unique 10-digit SEC-issued value to identify entities that have filed disclosures with the SEC. It is commonly abbreviated as CIK. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Indicate number of shares or other units outstanding of each of registrant's classes of capital or common stock or other ownership interests, if and as stated on cover of related periodic report. Where multiple classes or units exist define each class/interest by adding class of stock items such as Common Class A [Member], Common Class B [Member] or Partnership Interest [Member] onto the Instrument [Domain] of the Entity Listings, Instrument. No definition available.
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- Definition Indicate "Yes" or "No" whether registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. This information should be based on the registrant's current or most recent filing containing the related disclosure. No definition available.
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- Definition Indicate whether the registrant is one of the following: (1) Large Accelerated Filer, (2) Accelerated Filer, (3) Non-accelerated Filer, (4) Smaller Reporting Company (Non-accelerated) or (5) Smaller Reporting Accelerated Filer. Definitions of these categories are stated in Rule 12b-2 of the Exchange Act. This information should be based on the registrant's current or most recent filing containing the related disclosure. No definition available.
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- Definition The exact name of the entity filing the report as specified in its charter, which is required by forms filed with the SEC. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Indicate "Yes" or "No" if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. No definition available.
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- Definition Indicate "Yes" or "No" if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Is used on Form Type: 10-K, 10-Q, 8-K, 20-F, 6-K, 10-K/A, 10-Q/A, 20-F/A, 6-K/A, N-CSR, N-Q, N-1A. No definition available.
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- Definition Carrying value as of the balance sheet date of liabilities incurred (and for which invoices have typically been received) and payable to vendors for goods and services received that are used in an entity's business. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Accumulated change in equity from transactions and other events and circumstances from non-owner sources, net of tax effect, at period end. Excludes Net Income (Loss), and accumulated changes in equity from transactions resulting from investments by owners and distributions to owners. Includes foreign currency translation items, certain pension adjustments, unrealized gains and losses on certain investments in debt and equity securities, other than temporary impairment (OTTI) losses related to factors other than credit losses on available-for-sale and held-to-maturity debt securities that an entity does not intend to sell and it is not more likely than not that the entity will be required to sell before recovery of the amortized cost basis, as well as changes in the fair value of derivatives related to the effective portion of a designated cash flow hedge. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Excess of issue price over par or stated value of the entity's capital stock and amounts received from other transactions involving the entity's stock or stockholders. Includes adjustments to additional paid in capital. Some examples of such adjustments include recording the issuance of debt with a beneficial conversion feature and certain tax consequences of equity instruments awarded to employees. Use this element for the aggregate amount of additional paid-in capital associated with common and preferred stock. For additional paid-in capital associated with only common stock, use the element additional paid in capital, common stock. For additional paid-in capital associated with only preferred stock, use the element additional paid in capital, preferred stock. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Sum of the carrying amounts as of the balance sheet date of all assets that are recognized. Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Sum of the carrying amounts as of the balance sheet date of all assets that are expected to be realized in cash, sold, or consumed within one year (or the normal operating cycle, if longer). Assets are probable future economic benefits obtained or controlled by an entity as a result of past transactions or events. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- References No definition available.
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- Definition Amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Also includes short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Excludes cash and cash equivalents within disposal group and discontinued operation. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Represents the caption on the face of the balance sheet to indicate that the entity has entered into (1) purchase or supply arrangements that will require expending a portion of its resources to meet the terms thereof, and (2) is exposed to potential losses or, less frequently, gains, arising from (a) possible claims against a company's resources due to future performance under contract terms, and (b) possible losses or likely gains from uncertainties that will ultimately be resolved when one or more future events that are deemed likely to occur do occur or fail to occur. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Aggregate par or stated value of issued nonredeemable common stock (or common stock redeemable solely at the option of the issuer). This item includes treasury stock repurchased by the entity. Note: elements for number of nonredeemable common shares, par value and other disclosure concepts are in another section within stockholders' equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition The carrying amount of consideration received or receivable as of the balance sheet date on potential earnings that were not recognized as revenue in conformity with GAAP, and which are expected to be recognized as such within one year or the normal operating cycle, if longer, including sales, license fees, and royalties, but excluding interest income. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition The noncurrent portion of deferred revenue amount as of balance sheet date. Deferred revenue is a liability related to a revenue producing activity for which revenue has not yet been recognized, and is not expected to be recognized in the next twelve months. Generally, an entity records deferred revenue when it receives consideration from a customer before achieving certain criteria that must be met for revenue to be recognized in conformity with GAAP. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Sum of the carrying amounts as of the balance sheet date of all liabilities that are recognized. Liabilities are probable future sacrifices of economic benefits arising from present obligations of an entity to transfer assets or provide services to other entities in the future. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Amount of liabilities and equity items, including the portion of equity attributable to noncontrolling interests, if any. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Total obligations incurred as part of normal operations that are expected to be paid during the following twelve months or within one business cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- References No definition available.
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- Definition Amount of obligation due after one year or beyond the normal operating cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- References No definition available.
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- Definition The total amount of investments that are intended to be held for an extended period of time (longer than one operating cycle). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which is directly or indirectly attributable to that ownership interest in subsidiary equity which is not attributable to the parent (that is, noncontrolling interest, previously referred to as minority interest). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Aggregate carrying amount, as of the balance sheet date, of noncurrent assets not separately disclosed in the balance sheet. Noncurrent assets are expected to be realized or consumed after one year (or the normal operating cycle, if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Aggregate carrying amount, as of the balance sheet date, of noncurrent obligations not separately disclosed in the balance sheet. Noncurrent liabilities are expected to be paid after one year (or the normal operating cycle, if longer). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Amount of asset related to consideration paid in advance for costs that provide economic benefits in future periods, and amount of other assets that are expected to be realized or consumed within one year or the normal operating cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Amount after accumulated depreciation, depletion and amortization of physical assets used in the normal conduct of business to produce goods and services and not intended for resale. Examples include, but are not limited to, land, buildings, machinery and equipment, office equipment, and furniture and fixtures. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition The cumulative amount of the reporting entity's undistributed earnings or deficit. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Investments which are intended to be sold in the short term (usually less than one year or the normal operating cycle, whichever is longer) including trading securities, available-for-sale securities, held-to-maturity securities, and other short-term investments not otherwise listed in the existing taxonomy. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Total of all stockholders' equity (deficit) items, net of receivables from officers, directors, owners, and affiliates of the entity which are attributable to the parent. The amount of the economic entity's stockholders' equity attributable to the parent excludes the amount of stockholders' equity which is allocable to that ownership interest in subsidiary equity which is not attributable to the parent (noncontrolling interest, minority interest). This excludes temporary equity and is sometimes called permanent equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- References No definition available.
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- Definition Amount of stockholders' equity (deficit), net of receivables from officers, directors, owners, and affiliates of the entity, attributable to both the parent and noncontrolling interests. Amount excludes temporary equity. Alternate caption for the concept is permanent equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Amount due from customers or clients and related parties, within one year of the balance sheet date (or the normal operating cycle, whichever is longer), for goods or services (including trade receivables) that have been delivered or sold in the normal course of business, reduced to the estimated net realizable fair value by an allowance established by the entity of the amount it deems uncertain of collection. No definition available.
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- Definition Carrying value as of the balance sheet date of obligations incurred and payable to related parties, pertaining to costs that are statutory in nature, are incurred on contractual obligations, or accumulate over time and for which invoices have not yet been received or will not be rendered. Examples include taxes, interest, rent and utilities. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer). No definition available.
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- Definition Carrying value as of the balance sheet date of obligations incurred and payable to third parties and employees. Used to reflect the current portion of the liabilities (due within one year or within the normal operating cycle if longer). No definition available.
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- Definition Carrying amount as of the balance sheet date of obligations related to loans payable to parent. For classified balance sheets, represents the current portion of such liabilities (due within one year or within the normal operating cycle if longer). No definition available.
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CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands |
Dec. 31, 2015 |
Dec. 31, 2014 |
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|---|---|---|---|---|---|
| Allowance for doubtful accounts | $ 1,375,000 | $ 2,440,000 | |||
| Current liabilities | $ 208,775,000 | $ 135,251,000 | [1] | ||
| Ordinary shares, par value (in dollars per share) | $ 0.00025 | $ 0.00025 | |||
| Ordinary shares, shares authorized | 2,400,000 | 2,400,000 | |||
| Ordinary shares, shares issued | 212,177 | 203,658 | |||
| Ordinary shares, shares outstanding | 212,177 | 203,658 | |||
| Class A ordinary shares | |||||
| Ordinary shares, shares authorized | 1,800,000 | 1,800,000 | |||
| Ordinary shares, shares issued | 96,168 | ||||
| Ordinary shares, shares outstanding | 96,168 | ||||
| Class B ordinary shares | |||||
| Ordinary shares, shares authorized | 200,000 | 200,000 | |||
| Ordinary shares, shares issued | 116,009 | ||||
| Ordinary shares, shares outstanding | 116,009 | ||||
| Ordinary shares to be designated | |||||
| Ordinary shares, shares authorized | 400,000 | 400,000 | |||
| Consolidated VIEs without recourse to the primary beneficiaries | |||||
| Current liabilities | $ 107,389,000 | $ 72,935,000 | |||
| SINA and other related parties | |||||
| Allowance for doubtful accounts | 0 | 139,000 | |||
| Third parties | |||||
| Allowance for doubtful accounts | $ 1,375,000 | $ 2,301,000 | |||
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- Definition A valuation allowance for trade and other receivables due to an Entity within one year (or the normal operating cycle, whichever is longer) that are expected to be uncollectible. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Face amount or stated value per share of common stock. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition The maximum number of common shares permitted to be issued by an entity's charter and bylaws. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Total number of common shares of an entity that have been sold or granted to shareholders (includes common shares that were issued, repurchased and remain in the treasury). These shares represent capital invested by the firm's shareholders and owners, and may be all or only a portion of the number of shares authorized. Shares issued include shares outstanding and shares held in the treasury. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Number of shares of common stock outstanding. Common stock represent the ownership interest in a corporation. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Total obligations incurred as part of normal operations that are expected to be paid during the following twelve months or within one business cycle, if longer. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands |
12 Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
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| Advertising and marketing revenues | ||||||||||
| Third parties | $ 207,657 | $ 129,644 | [1] | $ 96,976 | [1] | |||||
| Total advertising and marketing revenues | 402,415 | 264,782 | [1] | 148,426 | [1] | |||||
| Other revenues | 75,476 | 69,390 | [1] | 39,887 | [1] | |||||
| Total revenues | 477,891 | 334,172 | [1] | 188,313 | [1] | |||||
| Costs and Expenses | ||||||||||
| Cost of revenues | 141,960 | 83,599 | [1] | 59,891 | [1] | |||||
| Sales and marketing | 126,059 | 120,361 | [1] | 63,076 | [1] | |||||
| Product development | 143,444 | 125,832 | [1] | 100,740 | [1] | |||||
| General and administrative | 28,925 | 26,483 | [1] | 23,214 | [1] | |||||
| Total costs and expenses | 440,388 | 356,275 | [1] | 246,921 | [1] | |||||
| Income (loss) from operations | 37,503 | (22,103) | [1] | (58,608) | [1] | |||||
| Loss from equity method investments | (6) | (5) | [1],[2] | (1,236) | [1],[2] | |||||
| Realized gain from investments | 944 | 481 | [1] | 397 | [1] | |||||
| Investment related impairment | (8,005) | (2,521) | [1],[2] | (2,526) | [1],[2] | |||||
| Remeasurement gain upon obtaining control (Note 6) | [1],[2] | 3,116 | ||||||||
| Interest and other income (expenses), net (including interest expense on amount due to SINA of $6,709, $2,838, and nil for the years ended December 31, 2013, 2014 and 2015, respectively) | 6,344 | 6,780 | [1] | (2,871) | [1] | |||||
| Change in fair value of investor option liability (Note 15) | [1],[2] | (46,972) | 21,064 | |||||||
| Income (loss) before income tax expenses | 36,780 | (64,340) | [1] | (40,664) | [1] | |||||
| Less: Income tax expenses | 2,591 | 1,128 | [1] | 271 | [1] | |||||
| Net income (loss) | 34,189 | (65,468) | [1],[2] | (40,935) | [1],[2] | |||||
| Less: Net loss attributable to the non-controlling interests | (556) | (143) | [1] | (1,145) | [1] | |||||
| Net income (loss) attributable to Weibo | 34,745 | (65,325) | [1] | (39,790) | [1] | |||||
| Other comprehensive loss | ||||||||||
| Currency translation adjustments | (7,874) | (1,450) | [1] | (174) | [1] | |||||
| Unrealized loss on available-for-sale securities | (198) | (2,067) | [1] | |||||||
| Total comprehensive income (loss) | 26,117 | (68,985) | [1] | (41,109) | [1] | |||||
| Less: Comprehensive loss attributable to non-controlling interests | (829) | (366) | [1] | (888) | [1] | |||||
| Comprehensive income (loss) attributable to Weibo's ordinary shareholders | $ 26,946 | $ (68,619) | [1] | $ (40,221) | [1] | |||||
| Basic net income (loss) per share attributable to Weibo's ordinary shareholders (in dollars per share) | $ 0.17 | $ (0.35) | [1] | $ (0.27) | [1] | |||||
| Shares used in computing basic net income (loss) per share attributable to Weibo's ordinary shareholders (in shares) | 208,163 | 186,878 | [1] | 146,820 | [1] | |||||
| Diluted net income (loss) per share attributable to Weibo's ordinary shareholders (in dollars per share) | $ 0.16 | $ (0.35) | [1] | $ (0.27) | [1] | |||||
| Shares used in computing diluted net income (loss) per share attributable to Weibo's ordinary shareholders (in shares) | 217,918 | 186,878 | [1] | 146,820 | [1] | |||||
| Alibaba | ||||||||||
| Advertising and marketing revenues | ||||||||||
| Related party | $ 143,650 | $ 107,587 | [1] | $ 49,135 | [1] | |||||
| SINA and other related parties | ||||||||||
| Advertising and marketing revenues | ||||||||||
| Related party | $ 51,108 | $ 27,551 | [1] | $ 2,315 | [1] | |||||
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- Definition Revenue from the sale of advertising time (such as television and radio) or space (newspaper or magazine pages). May also include advertising, marketing and promotional services rendered during the reporting period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition In a business combination achieved in stages, this element represents the amount of gain recognized by the entity as a result of remeasuring to fair value the equity interest in the acquiree it held before the business combination. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income, attributable to parent entity. Excludes changes in equity resulting from investments by owners and distributions to owners. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income (loss) and other comprehensive income (loss), attributable to noncontrolling interests. Excludes changes in equity resulting from investments by owners and distributions to owners. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Amount after tax of increase (decrease) in equity from transactions and other events and circumstances from net income and other comprehensive income. Excludes changes in equity resulting from investments by owners and distributions to owners. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition The aggregate costs related to goods produced and sold and services rendered by an entity during the reporting period. This excludes costs incurred during the reporting period related to financial services rendered and other revenue generating activities. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- References No definition available.
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- Definition Total costs of sales and operating expenses for the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Amount of gain (loss) recognized on the income statement for financial instrument classified as a liability measured using unobservable inputs that reflect the entity's own assumption about the assumptions market participants would use in pricing. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition The aggregate total of expenses of managing and administering the affairs of an entity, including affiliates of the reporting entity, which are not directly or indirectly associated with the manufacture, sale or creation of a product or product line. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition This element represents the income or loss from continuing operations attributable to the economic entity which may also be defined as revenue less expenses from ongoing operations, after income or loss from equity method investments, but before income taxes, extraordinary items, and noncontrolling interest. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition This item represents the entity's proportionate share for the period of the net income (loss) of its investee (such as unconsolidated subsidiaries and joint ventures) to which the equity method of accounting is applied. This item includes income or expense related to stock-based compensation based on the investor's grant of stock to employees of an equity method investee. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition The portion of profit or loss for the period, net of income taxes, which is attributable to the parent. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Amount of Net Income (Loss) attributable to noncontrolling interest. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition The aggregate amount of income or expense from ancillary business-related activities (that is to say, excluding major activities considered part of the normal operations of the business). Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition The net result for the period of deducting operating expenses from operating revenues. No definition available.
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- Definition Amount after tax and reclassification adjustments of gain (loss) on foreign currency translation adjustments, foreign currency transactions designated and effective as economic hedges of a net investment in a foreign entity and intra-entity foreign currency transactions that are of a long-term-investment nature. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- References No definition available.
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| X | ||||||||||
- Definition Amount after tax, before reclassification adjustments, of unrealized holding gain (loss) on available-for-sale securities. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition Revenues from the sale of other goods or rendering of other services, not elsewhere specified in the taxonomy; net of (reduced by) sales adjustments, returns, allowances, and discounts. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition The amount of other than temporary impairment (OTTI) losses on equity securities, OTTI related to credit losses on debt securities, and OTTI losses on debt securities when the entity intends to sell the securities or it is more likely than not that the entity will be required to sell the securities before recovery of its amortized cost basis. Additionally, this item includes OTTI losses recognized during the period on investments accounted for under the cost method of accounting. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition The net realized gains or losses on investments during the period, not including gains or losses on securities separately or otherwise categorized as trading, available-for-sale, or held-to-maturity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition The aggregate costs incurred (1) in a planned search or critical investigation aimed at discovery of new knowledge with the hope that such knowledge will be useful in developing a new product or service, a new process or technique, or in bringing about a significant improvement to an existing product or process; or (2) to translate research findings or other knowledge into a plan or design for a new product or process or for a significant improvement to an existing product or process whether intended for sale or the entity's use, during the reporting period charged to research and development projects, including the costs of developing computer software up to the point in time of achieving technological feasibility, and costs allocated in accounting for a business combination to in-process projects deemed to have no alternative future use. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition Amount of revenue, fees and commissions earned from transactions between (a) a parent company and its subsidiaries; (b) subsidiaries of a common parent; (c) an entity and trusts for the benefit of employees, for example, but not limited to, pension and profit-sharing trusts that are managed by or under the trusteeship of the entity's management; (d) an entity and its principal, owners, management, or members of their immediate families; and (e) affiliates. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition Total revenue from sale of goods and services rendered during the reporting period, in the normal course of business, reduced by sales returns and allowances, and sales discounts. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition The aggregate total amount of expenses directly related to the marketing or selling of products or services. No definition available.
|
| X | ||||||||||
- Definition The average number of shares or units issued and outstanding that are used in calculating diluted EPS or earnings per unit (EPU), determined based on the timing of issuance of shares or units in the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition Number of [basic] shares or units, after adjustment for contingently issuable shares or units and other shares or units not deemed outstanding, determined by relating the portion of time within a reporting period that common shares or units have been outstanding to the total time in that period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- References No definition available.
|
| X | ||||||||||
- Definition Represents the amount of advertising revenue received from third parties during the reporting period. No definition available.
|
| X | ||||||||||
- Details
|
| X | ||||||||||
- Details
|
CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|
| COMBINED AND CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS | |||
| Interest expense on amount due to SINA | $ 0 | $ 2,838,000 | $ 6,709,000 |
| X | ||||||||||
- References No definition available.
|
| X | ||||||||||
- Definition Amount of interest expense incurred on a debt or other obligation to related party. No definition available.
|
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) - USD ($) shares in Thousands, $ in Thousands |
Ordinary Shares
SINA
|
Ordinary Shares
Alibaba
|
Ordinary Shares
IPO
|
Ordinary Shares |
Additional Paid-In Capital
SINA
|
Additional Paid-In Capital
Alibaba
|
Additional Paid-In Capital
IPO
|
Additional Paid-In Capital |
Accumulated Other Comprehensive Income (Loss) |
Accumulated Deficit |
Non-controlling Interests |
SINA |
Alibaba |
IPO |
Total |
|||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Balance at Dec. 31, 2012 | [1] | $ 36 | $ 21,781 | $ 1,007 | $ (237,298) | $ 6,696 | $ (207,778) | |||||||||||||||||||||
| Balance (in shares) at Dec. 31, 2012 | [1] | 143,445 | ||||||||||||||||||||||||||
| Increase (Decrease) in Shareholders' Equity (Deficit) | ||||||||||||||||||||||||||||
| Issuance of ordinary shares pursuant to stock plan | 1,258 | 1,258 | ||||||||||||||||||||||||||
| Issuance of ordinary shares pursuant to stock plan (in shares) | 3,449 | |||||||||||||||||||||||||||
| Issuance of ordinary shares (either in IPO or to related party) | $ 1 | $ 39,037 | $ 39,038 | |||||||||||||||||||||||||
| Issuance of ordinary shares (either in IPO or to related party) (in shares) | 3,498 | |||||||||||||||||||||||||||
| Repurchase of vested options | (37,959) | (37,959) | ||||||||||||||||||||||||||
| Non-cash stock-based compensation | 4,105 | 4,105 | ||||||||||||||||||||||||||
| Deemed contribution from SINA | $ 13,092 | $ 13,092 | [2] | |||||||||||||||||||||||||
| Legal transfer of Weibo Interactive and recognition of amount due to SINA | (10,080) | (10,080) | [2] | |||||||||||||||||||||||||
| Sale of subsidiaries' shares to non-controlling interests | 1,461 | 1,461 | ||||||||||||||||||||||||||
| Net income (loss) | (39,790) | (1,145) | (40,935) | [2],[3] | ||||||||||||||||||||||||
| Currency translation adjustments | 118 | (549) | 257 | (174) | [3] | |||||||||||||||||||||||
| Balance at Dec. 31, 2013 | [1] | $ 37 | 31,352 | 458 | (277,088) | 7,269 | (237,972) | |||||||||||||||||||||
| Balance (in shares) at Dec. 31, 2013 | [1] | 150,392 | ||||||||||||||||||||||||||
| Increase (Decrease) in Shareholders' Equity (Deficit) | ||||||||||||||||||||||||||||
| Issuance of ordinary shares pursuant to stock plan | $ 1 | 1,918 | 1,919 | |||||||||||||||||||||||||
| Issuance of ordinary shares pursuant to stock plan (in shares) | 3,900 | |||||||||||||||||||||||||||
| Issuance of ordinary shares (either in IPO or to related party) | $ 5 | 42,224 | $ 301,273 | 42,224 | $ 301,278 | |||||||||||||||||||||||
| Issuance of ordinary shares (either in IPO or to related party) (in shares) | 2,923 | 19,320 | ||||||||||||||||||||||||||
| Deemed contribution from Alibaba due to exercise of call option by Alibaba | $ 15,300 | $ 15,300 | [2] | |||||||||||||||||||||||||
| Repurchase of ordinary shares from SINA | (42,224) | (42,224) | ||||||||||||||||||||||||||
| Repurchase of ordinary shares from SINA (in shares) | (2,923) | |||||||||||||||||||||||||||
| Conversion of preferred shares into ordinary shares | $ 8 | 479,604 | 479,612 | |||||||||||||||||||||||||
| Conversion of preferred shares into ordinary shares (in shares) | 30,046 | |||||||||||||||||||||||||||
| Non-cash stock-based compensation | 13,779 | 13,779 | ||||||||||||||||||||||||||
| Deemed contribution from SINA | $ 61,176 | $ 61,176 | [2] | |||||||||||||||||||||||||
| Sale of subsidiaries' shares to non-controlling interests | 1,283 | 1,283 | ||||||||||||||||||||||||||
| Net income (loss) | (65,325) | (143) | (65,468) | [2],[3] | ||||||||||||||||||||||||
| Currency translation adjustments | (1,227) | (223) | (1,450) | [3] | ||||||||||||||||||||||||
| Unrealized loss on available-for-sale securities | (2,067) | (2,067) | [3] | |||||||||||||||||||||||||
| Balance at Dec. 31, 2014 | [1] | $ 51 | 904,402 | (2,836) | (342,413) | 8,186 | $ 567,390 | [4] | ||||||||||||||||||||
| Balance (in shares) at Dec. 31, 2014 | 203,658 | [1] | 203,658 | |||||||||||||||||||||||||
| Increase (Decrease) in Shareholders' Equity (Deficit) | ||||||||||||||||||||||||||||
| Issuance of ordinary shares pursuant to stock plan | $ 2 | 8,121 | $ 8,123 | |||||||||||||||||||||||||
| Issuance of ordinary shares pursuant to stock plan (in shares) | 8,519 | |||||||||||||||||||||||||||
| Non-cash stock-based compensation | 26,399 | 26,399 | ||||||||||||||||||||||||||
| Net income (loss) | 34,745 | (556) | 34,189 | |||||||||||||||||||||||||
| Currency translation adjustments | (7,601) | (273) | (7,874) | |||||||||||||||||||||||||
| Unrealized loss on available-for-sale securities | (198) | (198) | ||||||||||||||||||||||||||
| Balance at Dec. 31, 2015 | $ 53 | $ 938,922 | $ (10,635) | $ (307,668) | $ 7,357 | $ 628,029 | ||||||||||||||||||||||
| Balance (in shares) at Dec. 31, 2015 | 212,177 | 212,177 | ||||||||||||||||||||||||||
| ||||||||||||||||||||||||||||
| X | ||||||||||
- Definition This element represents the amount of recognized equity-based compensation during the period, that is, the amount recognized as expense in the income statement (or as asset if compensation is capitalized). Alternate captions include the words "stock-based compensation". Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition Total number of common shares of an entity that have been sold or granted to shareholders (includes common shares that were issued, repurchased and remain in the treasury). These shares represent capital invested by the firm's shareholders and owners, and may be all or only a portion of the number of shares authorized. Shares issued include shares outstanding and shares held in the treasury. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition A roll forward is a reconciliation of a concept from the beginning of a period to the end of a period. No definition available.
|
| X | ||||||||||
- Definition Amount of increase in noncontrolling interest from subsidiary issuance of equity interests to noncontrolling interest holders. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition Amount after tax and reclassification adjustments of gain (loss) on foreign currency translation adjustments, foreign currency transactions designated and effective as economic hedges of a net investment in a foreign entity and intra-entity foreign currency transactions that are of a long-term-investment nature. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition Amount after tax, before reclassification adjustments, of unrealized holding gain (loss) on available-for-sale securities. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition Number of shares issued during the period as a result of the conversion of convertible securities. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition Number of new stock issued during the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition Number of shares (or other type of equity) issued during the period as a result of any equity-based compensation plan other than an employee stock ownership plan (ESOP), net of any shares forfeited. Shares issued could result from the issuance of restricted stock, the exercise of stock options, stock issued under employee stock purchase plans, and/or other employee benefit plans. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition The net amount of stock issued during the period upon the conversion of convertible securities, net of adjustments (for example, to additional paid in capital) including the write-off of an equity component recognized to record the convertible debt instrument as two separate components - a debt component and an equity component. This item is meant to disclose the value of shares issued on conversion of convertible securities that were recorded as two separate (debt and equity) components. No definition available.
|
| X | ||||||||||
- Definition Equity impact of the value of new stock issued during the period. Includes shares issued in an initial public offering or a secondary public offering. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition Value of stock (or other type of equity) issued during the period as a result of any equity-based compensation plan other than an employee stock ownership plan (ESOP), net of stock value of such awards forfeited. Stock issued could result from the issuance of restricted stock, the exercise of stock options, stock issued under employee stock purchase plans, and/or other employee benefit plans. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition Number of shares that have been repurchased during the period and have not been retired and are not held in treasury. Some state laws may govern the circumstances under which an entity may acquire its own stock and prescribe the accounting treatment therefore. This element is used when state law does not recognize treasury stock. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition Equity impact of the value of stock that has been repurchased during the period and has not been retired and is not held in treasury. Some state laws may mandate the circumstances under which an entity may acquire its own stock and prescribe the accounting treatment therefore. This element is used when state law does not recognize treasury stock. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition Amount of stockholders' equity (deficit), net of receivables from officers, directors, owners, and affiliates of the entity, attributable to both the parent and noncontrolling interests. Amount excludes temporary equity. Alternate caption for the concept is permanent equity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition This element represents the amount of recognized equity-based compensation related to repurchase of vested options. No definition available.
|
| X | ||||||||||
- Definition Amount recognized as a deemed contribution due to price discount applied to the ordinary shares sold to certain investors. No definition available.
|
| X | ||||||||||
- Definition Represents the equity impact of deemed contribution from Parent. No definition available.
|
| X | ||||||||||
- Definition Represents the equity impact of the amount of legal transfer of acquiree from parent and recognition amount due to parent. No definition available.
|
| X | ||||||||||
- Details
|
| X | ||||||||||
- Details
|
| X | ||||||||||
- Details
|
| X | ||||||||||
- Details
|
| X | ||||||||||
- Details
|
| X | ||||||||||
- Details
|
| X | ||||||||||
- Details
|
| X | ||||||||||
- Details
|
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands |
12 Months Ended | ||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Dec. 31, 2015 |
Dec. 31, 2014 |
Dec. 31, 2013 |
|||||||||||
| Cash flows from operating activities: | |||||||||||||
| Net income (loss) | $ 34,189 | $ (65,468) | [1],[2] | $ (40,935) | [1],[2] | ||||||||
| Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||||||||||||
| Depreciation and amortization | 20,950 | 23,060 | [1] | 21,529 | [1] | ||||||||
| Stock-based compensation | 26,399 | 13,779 | [1] | 4,105 | [1] | ||||||||
| Provision (reversal) for allowance for doubtful accounts | (368) | 2,138 | [1] | 2,345 | [1] | ||||||||
| Deferred income taxes | (977) | 866 | [1] | 271 | [1] | ||||||||
| Loss from equity method investments | 6 | 5 | [1],[2] | 1,236 | [1],[2] | ||||||||
| Gain on sale of investments | (608) | (481) | [1] | (397) | [1] | ||||||||
| Investment related impairment | 8,005 | 2,521 | [1],[2] | 2,526 | [1],[2] | ||||||||
| Remeasurement gain upon obtaining control | [1],[2] | (3,116) | |||||||||||
| Change in fair value of investor option liability | [1],[2] | 46,972 | (21,064) | ||||||||||
| Loss on disposal of property and equipment | 184 | ||||||||||||
| Changes in assets and liabilities, net of acquisition: | |||||||||||||
| Accounts receivable due from third parties | 4,988 | (14,938) | [1] | (26,930) | [1] | ||||||||
| Prepaid expenses and other current assets | 470 | (12,283) | [1] | (2,400) | [1] | ||||||||
| Other assets | 713 | (23) | [1] | ||||||||||
| Accrued liabilities due to third parties and employees | 52,109 | 32,886 | [1] | 35,881 | [1] | ||||||||
| Deferred revenues | 17,753 | 5,799 | [1] | 12,638 | [1] | ||||||||
| Net cash provided by (used in) operating activities | 181,971 | (19,412) | [1] | (1,950) | [1] | ||||||||
| Cash flows from investing activities: | |||||||||||||
| Purchases of short-term investments | (149,374) | (230,161) | [1] | (250,000) | [1] | ||||||||
| Maturities of short-term investments | 216,615 | 321,208 | [1] | 117,564 | [1] | ||||||||
| Investment and prepayment in long-term investments | (268,758) | (54,383) | [1] | (17,672) | [1] | ||||||||
| Proceeds from disposal of long-term investments | 6,090 | 1,644 | [1] | 505 | [1] | ||||||||
| Purchases of property and equipment | (10,858) | (14,743) | [1] | (12,044) | [1] | ||||||||
| Cash paid for business acquisition, net of cash acquired | (22,025) | (9,648) | [1] | ||||||||||
| Net cash provided by (used in) investing activities | (228,310) | 13,917 | [1] | (161,647) | [1] | ||||||||
| Cash flows from financing activities: | |||||||||||||
| Proceeds from IPO, net of commission | [1] | 306,491 | |||||||||||
| Payment of offering expenses | [1] | (5,213) | |||||||||||
| Proceeds from employees options exercised | 7,822 | 1,508 | [1] | 991 | [1] | ||||||||
| Proceeds from the issuance of preferred and ordinary shares (Note 3) | [1] | 585,799 | |||||||||||
| Payment for ordinary shares and repurchase of vested options | [1] | (6,873) | (45,876) | ||||||||||
| Proceeds from sales of non-controlling interests in subsidiaries | [1] | 968 | 1,461 | ||||||||||
| Repayment of amount due to SINA | (2,863) | (269,042) | [1] | (159,816) | [1] | ||||||||
| Other financing activities | [1] | (989) | |||||||||||
| Net cash provided by financing activities | 4,959 | 43,663 | [1] | 408,214 | [1] | ||||||||
| Effect of exchange rate changes on cash and cash equivalents | (6,045) | (2,402) | [1] | 131 | [1] | ||||||||
| Net increase (decrease) in cash and cash equivalents | (47,425) | 35,766 | [1] | 244,748 | [1] | ||||||||
| Cash and cash equivalents at the beginning of the year | [1] | 284,865 | [3] | 249,099 | 4,351 | ||||||||
| Cash and cash equivalents at the end of the year | 237,440 | 284,865 | [1],[3] | 249,099 | [1] | ||||||||
| Supplemental disclosure of cash flow information | |||||||||||||
| Cash paid for interest | [1] | (7,580) | |||||||||||
| Cash paid for income taxes | (311) | ||||||||||||
| Supplemental schedule of non-cash investing and financing activities | |||||||||||||
| Conversion of preferred shares to ordinary shares | [1] | 479,612 | |||||||||||
| Legal transfer of Weibo Interactive and recognition of amount due to SINA | [1] | (10,080) | |||||||||||
| Property and equipment in accounts payable | 2,532 | 2,420 | [1] | 824 | [1] | ||||||||
| SINA and other related parties | |||||||||||||
| Changes in assets and liabilities, net of acquisition: | |||||||||||||
| Accounts receivable due from related parties | (15,313) | (16,589) | [1] | 24,507 | [1] | ||||||||
| Alibaba | |||||||||||||
| Changes in assets and liabilities, net of acquisition: | |||||||||||||
| Accounts receivable due from related parties | 10,673 | (43,426) | [1] | (21,299) | [1] | ||||||||
| Supplemental schedule of non-cash investing and financing activities | |||||||||||||
| Deemed contribution from Alibaba | [1] | 15,300 | |||||||||||
| Other related parties | |||||||||||||
| Changes in assets and liabilities, net of acquisition: | |||||||||||||
| Due to related parties | 10,261 | 2,279 | [1] | (5,835) | [1] | ||||||||
| SINA | |||||||||||||
| Changes in assets and liabilities, net of acquisition: | |||||||||||||
| Due to related parties | 12,537 | 8,233 | [1] | 8,279 | [1] | ||||||||
| Interest on amount due to SINA | [1] | (4,742) | 6,709 | ||||||||||
| Cash flows from financing activities: | |||||||||||||
| Funding from SINA | [1] | 15,824 | 26,644 | ||||||||||
| Repayment of amount due to SINA | $ (2,863) | (276,614) | (159,816) | ||||||||||
| Supplemental schedule of non-cash investing and financing activities | |||||||||||||
| Deemed contribution from SINA (Note 10) | [1] | $ 61,176 | $ 13,092 | ||||||||||
| |||||||||||||
| X | ||||||||||
- References No definition available.
|
| X | ||||||||||
- Definition Amount of increase (decrease) in the allowance for doubtful accounts. No definition available.
|
| X | ||||||||||
- Definition In a business combination achieved in stages, this element represents the amount of gain recognized by the entity as a result of remeasuring to fair value the equity interest in the acquiree it held before the business combination. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition Future cash outflow to pay for purchases of fixed assets that have occurred. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition Amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Also includes short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Excludes cash and cash equivalents within disposal group and discontinued operation. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition Amount of increase (decrease) in cash and cash equivalents. Cash and cash equivalents are the amount of currency on hand as well as demand deposits with banks or financial institutions. Includes other kinds of accounts that have the general characteristics of demand deposits. Also includes short-term, highly liquid investments that are both readily convertible to known amounts of cash and so near their maturity that they present insignificant risk of changes in value because of changes in interest rates. Includes effect from exchange rate changes. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- References No definition available.
|
| X | ||||||||||
- Definition The value of the financial instrument issued [noncash or part noncash] in the conversion of stock. Noncash is defined as transactions during a period that do not result in cash receipts or cash payments in the period. "Part noncash" refers to that portion of the transaction not resulting in cash receipts or cash payments in the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition Amount of deferred income tax expense (benefit) and income tax credits. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition The current period expense charged against earnings on long-lived, physical assets not used in production, and which are not intended for resale, to allocate or recognize the cost of such assets over their useful lives; or to record the reduction in book value of an intangible asset over the benefit period of such asset; or to reflect consumption during the period of an asset that is not used in production. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition The effect of exchange rate changes on cash balances in continuing operations held in foreign currencies. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition Amount of gain (loss) recognized on the income statement for financial instrument classified as a liability measured using unobservable inputs that reflect the entity's own assumption about the assumptions market participants would use in pricing. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition Amount of gain (loss) on sale or disposal of property, plant and equipment assets, excluding oil and gas property and timber property. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition The net realized gain (loss) on investments sold during the period, not including gains (losses) on securities separately or otherwise categorized as trading, available-for-sale, or held-to-maturity, which, for cash flow reporting, is a component of proceeds from investing activities. Reference 1: http://www.xbrl.org/2003/role/presentationRef
|
| X | ||||||||||
- Definition This item represents the entity's proportionate share for the period of the net income (loss) of its investee (such as unconsolidated subsidiaries and joint ventures) to which the equity method of accounting is applied. This item includes income or expense related to stock-based compensation based on the investor's grant of stock to employees of an equity method investee. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
- Definition The amount of cash paid during the current period to foreign, federal, state, and local authorities as taxes on income, net of any cash received during the current period as refunds for the overpayment of taxes. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition The increase (decrease) during the reporting period in amount due within one year (or one business cycle) from customers for the credit sale of goods and services. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
- Definition The increase (decrease) during the reporting period in the amount due to the reporting entity for good and services provided to the following types of related parties: a parent company and its subsidiaries; subsidiaries of a common parent; an entity and trust for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of the entity's management, an entity and its principal owners, management, member of their immediate families, affiliates, or other parties with the ability to exert significant influence. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
- Definition The increase (decrease) during the reporting period, excluding the portion taken into income, in the liability reflecting revenue yet to be earned for which cash or other forms of consideration was received or recorded as a receivable. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
- Definition The increase (decrease) during the reporting period in the aggregate amount of obligations to be paid to the following types of related parties: a parent company and its subsidiaries; subsidiaries of a common parent; an entity and trust for the benefit of employees, such as pension and profit-sharing trusts that are managed by or under the trusteeship of the entities' management; an entity and its principal owners, management, or member of their immediate families, affiliates, or other parties with the ability to exert significant influence. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition The increase (decrease) during the reporting period in interest payable, which represents the amount owed to note holders, bond holders, and other parties for interest earned on loans or credit extended to the reporting entity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- References No definition available.
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- Definition The increase (decrease) during the reporting period in other noncurrent operating assets not separately disclosed in the statement of cash flows. No definition available.
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- Definition The increase (decrease) during the reporting period in the value of prepaid expenses and other assets not separately disclosed in the statement of cash flows, for example, deferred expenses, intangible assets, or income taxes. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition The amount of cash paid for interest during the period. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Amount of cash inflow (outflow) of financing activities, excluding discontinued operations. Financing activity cash flows include obtaining resources from owners and providing them with a return on, and a return of, their investment; borrowing money and repaying amounts borrowed, or settling the obligation; and obtaining and paying for other resources obtained from creditors on long-term credit. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
- References No definition available.
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| X | ||||||||||
- Definition Amount of cash inflow (outflow) of investing activities, excluding discontinued operations. Investing activity cash flows include making and collecting loans and acquiring and disposing of debt or equity instruments and property, plant, and equipment and other productive assets. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
- References No definition available.
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| X | ||||||||||
- Definition Amount of cash inflow (outflow) from operating activities, excluding discontinued operations. Operating activity cash flows include transactions, adjustments, and changes in value not defined as investing or financing activities. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- References No definition available.
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| X | ||||||||||
- Definition The amount of other than temporary impairment (OTTI) losses on equity securities, OTTI related to credit losses on debt securities, and OTTI losses on debt securities when the entity intends to sell the securities or it is more likely than not that the entity will be required to sell the securities before recovery of its amortized cost basis. Additionally, this item includes OTTI losses recognized during the period on investments accounted for under the cost method of accounting. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition The cash outflow for cost incurred directly with the issuance of an equity security. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition The cash outflow associated with the acquisition of a business, net of the cash acquired from the purchase. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
- Definition The cash outflow for securities or other assets acquired, which qualify for treatment as an investing activity and are to be liquidated, if necessary, beyond the current operating cycle. Includes cash flows from securities classified as trading securities that were acquired for reasons other than sale in the long-term. No definition available.
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| X | ||||||||||
- Definition The cash outflow associated with the acquisition of long-lived, physical assets that are used in the normal conduct of business to produce goods and services and not intended for resale; includes cash outflows to pay for construction of self-constructed assets. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
- Definition The cash outflow for securities or other assets acquired, which qualify for treatment as an investing activity and are to be liquidated, if necessary, within the current operating cycle. Includes cash flows from securities classified as trading securities that were acquired for reasons other than sale in the short-term. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition The cash inflow associated with the amount received from entity's first offering of stock to the public. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
- Definition The cash inflow from maturities, prepayments, calls and collections of all investments, including securities and other assets, having ready marketability and intended by management to be liquidated, if necessary, within the current operating cycle. Includes cash flows from securities classified as trading securities that were acquired for reasons other than sale in the short-term. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition Amount of cash inflow from a noncontrolling interest. Includes, but is not limited to, purchase of additional shares or other increase in noncontrolling interest ownership. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
- Definition The net cash inflow or outflow from other financing activities. This element is used when there is not a more specific and appropriate element in the taxonomy. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition The cash inflow from sales of all investments, including securities and other assets, having ready marketability and intended by management to be liquidated, if necessary, beyond the current operating cycle. No definition available.
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- Definition The cash inflow associated with the amount received from holders exercising their stock options. This item inherently excludes any excess tax benefit, which the entity may have realized and reported separately. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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| X | ||||||||||
- Definition The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- Definition The aggregate amount of noncash, equity-based employee remuneration. This may include the value of stock or unit options, amortization of restricted stock or units, and adjustment for officers' compensation. As noncash, this element is an add back when calculating net cash generated by operating activities using the indirect method. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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- References No definition available.
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- Definition Amount recognized as a deemed contribution due to price discount applied to the ordinary shares sold to certain investors. No definition available.
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- Definition Represents the equity impact of deemed contribution from Parent. No definition available.
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- Definition The increase (decrease) during the reporting period in the amount of accrued liabilities due to third parties and employees. No definition available.
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- Definition Represents the equity impact of the amount of legal transfer of acquiree from parent and recognition amount due to parent. No definition available.
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- Definition The cash outflow to reacquire common stock and vested options during the period. No definition available.
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- Definition The cash inflow from the issuance of preferred and ordinary shares. No definition available.
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- Definition The cash inflow from parent as a source of financing. No definition available.
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| X | ||||||||||
- Definition The cash outflow to repay financing from parent. No definition available.
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- Details
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- Details
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Operations and reorganization |
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| Operations and reorganization | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Operations and reorganization |
1. Operations and reorganization
Weibo Corporation (“Weibo” or the “Company”) 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 on a massive global platform and stay connected with the world. As a microcosm of the Chinese society and a cultural phenomenon in China, Weibo allows people to be heard publicly and exposed to the rich ideas, cultures and experiences of the broader world. Media outlets use Weibo as a source of news and a distribution channel for their headline news. Government agencies and officials use Weibo as an official communication channel for disseminating timely information and gauging public opinion to improve public services. Charities use Weibo to make the world a better place by launching charitable projects, seeking donations and volunteers and leveraging celebrities and organizations on Weibo to amplify their social influence. Weibo generates the majority of its revenues from advertising and marketing services as well as other services, including game-related services, VIP membership and data licensing.
Incorporated in the Cayman Islands, Weibo Corporation is a majority-owned subsidiary of Sina Corporation (the “Parent” or “SINA”). In April 2014, the Company completed an initial public offering (the “IPO”) with the new issuance of 19,320,000 Class A ordinary shares. The company received $306.5 million in net proceeds from the issuance of new shares upon the IPO. Immediately prior to the completion of the IPO, all the ordinary shares held by SINA was converted into an equal number of the Class B ordinary shares, all the ordinary shares held by other shareholders was converted into an equal number of the Class A ordinary shares, and all of its outstanding preferred shares were automatically converted into 30,046,154 Class A ordinary shares. The call option held by a subsidiary of Alibaba Group was exercised to purchase 29,990,778 Class A ordinary shares from SINA and the Company (Note 3). Each Class A ordinary share is entitled to one vote per share and each Class B ordinary share is entitled to three votes per share. Each Class B ordinary share can be converted into one Class A ordinary share at any time, while Class A ordinary shares cannot be converted into Class B ordinary shares.
Reorganization
Weibo business was founded by SINA, its parent, in 2009. Prior to the establishment of the Company, the operations of Weibo business was carried out by various subsidiaries and variable interest entities (“VIEs”) of SINA (the “Predecessor Operations”). After its establishment, the Company has gradually completed the reorganization steps as described below (the “Reorganization”).
Establishment of Weibo Corporation. Weibo Corporation, an exempted company with limited liability, is the holding company for the Weibo business. Weibo HK is a wholly owned subsidiary of Weibo, and Weibo Technology, a wholly foreign-owned enterprise, (“the WFOE”), is a subsidiary of Weibo HK. The Company’s VIE and its subsidiaries are controlled by the WFOE through a series of contractual agreements. Weibo Corporation, its subsidiaries, the VIE and the VIE’s subsidiaries together are referred to as “the Group.”
The following sets forth the Company’s major subsidiaries, the VIE and its subsidiary:
Transfer of assets and liabilities relating to the Weibo business to the Group. According to the Company’s Shareholder Agreement dated April 29, 2013, the Group shall be liable for a loan payable to SINA for assets and liabilities incurred by SINA for the development of the Weibo business. The interest on amount due to SINA is calculated based on actual spending incurred by SINA for the development of Weibo business at each period end. The consolidated statements of income (loss) and comprehensive income (loss) reflected a charge for interest on the amount due to SINA, as well as on the amounts included as accrued liabilities due to SINA, at prevailing market interest rates by reference to the three-month time deposit rate of The People’s Bank of China, which ranged from 2.55% to 3.05%. The loans are repayable upon demand. There is no written loan agreement signed between SINA and Weibo. The interest expenses incurred was $6.7 million, $2.8 million and nil for the years ended December 31, 2013, 2014 and 2015, respectively. On April 29, 2013, SINA waived the interest charged to the Group in the amount of $8.5 million. The total waived amounts were accounted for as deemed contribution from SINA. In accordance with the Shareholder Agreement, the amount due to SINA after the waiver was $250 million and further cash outlay after April 29, 2013 to support the development of the Weibo business would increase the amount due to SINA. As of December 31, 2013, the Group recorded amount due to SINA of $285.2 million, including an interest payable balance of $4.8 million. The Group paid $276.6 million after the IPO to SINA in 2014. As of December 31, 2014 and 2015, Weibo had a $24.3 million and $12.2 million payment due to SINA, which is interest free and payable on demand. Such balances represented mainly the amounts payable to SINA for the Weibo Funds, which was settled in June 2015, and allocated expenses.
Transfer of Equity Interest in Weibo Interactive. Starting in 2011, SINA held a 55% equity interest in Weibo Interactive, an online-game platform company incorporated in China, and accounted for such interest using the equity method of accounting, as it had no control over the operations and assets of such interest. Weibo Interactive has been providing game platform maintenance services to Weibo since 2012. In May 2013, SINA gained control of Weibo Interactive through a step acquisition in which the remaining 45% equity interest was obtained for a consideration of $4.6 million. In connection with the Reorganization, SINA entered into an agreement to transfer 100% equity interest in Weibo Interactive to the Group for a consideration of $10.1 million effective in December 2013 (Note 6).
The transfer of Weibo Interactive to the Group was accounted for as a business combination between entities under common control, with financial statements presented for prior periods retrospectively adjusted to reflect the transfer from the first day SINA took control in May 2013. The investment in Weibo Interactive prior to the step-up acquisition was also reflected in the Group’s consolidated financial statements as if the investment was held by the Group since 2012.
The amounts recognized in the Group’s consolidated financial statements reflect the assets and liabilities of Weibo Interactive at SINA’s historical carrying value. The net equity of Weibo Interactive was reflected in the Group’s consolidated financial statements at the historical carrying value within the equity section as a deemed contribution from SINA. The $10.1 million of consideration payable to SINA was recognized when the transfer became legally effective in December 2013, which resulted in a decrease in equity and a corresponding increase in amount due to SINA. The service fees paid to Weibo Interactive prior to the May 2013 step-up acquisition were disclosed as related party transactions under cost of revenues in the Group’s consolidated statements of income (loss) and comprehensive income (loss). The service fees paid to Weibo Interactive after the step-up acquisition were eliminated as inter-company transactions.
Transfer of Equity Interest in Weibo Funds. SINA held a 55% and 85% equity interest in two limited liability partnerships, (“Weibo Funds’’), since 2011 and 2013, respectively, and had control over the operations and assets of the Weibo Funds, which engage in the investment of high-tech startups related to the Weibo business. On June 30, 2015, SINA transferred its equity interest in the Weibo Funds to the Group for a consideration of $22.0 million, and the Group accounted for such transaction as a business combination between entities under common control (Note 6). The Group’s consolidated financial statements presented for prior periods have been retrospectively adjusted as if the Group had control on the first day SINA took control.
The amounts recognized in the Group’s consolidated financial statements reflect the assets, liabilities, and net equity of the Weibo Funds at SINA’s historical carrying value. A consideration of $22.0 million payable to SINA was recognized when the transfer became legally effective in June 2015.
Intellectual Property License Agreement. The intellectual property license agreement was entered into by and between SINA and the Company in April 2013. Under this agreement, SINA granted the Company and its subsidiaries a perpetual, worldwide, royalty-free, fully paid-up, non-sublicensable, non-transferable, limited, exclusive license of certain trademarks and a non-exclusive license of certain other intellectual property owned by SINA to make, sell, offer to sell and distribute products, services and applications on a microblogging and social networking platform. The Company granted SINA and its affiliates a non-exclusive, perpetual, worldwide, non-sublicensable, non-transferable limited license of certain of the Company’s intellectual property to use, reproduce, modify, prepare derivative works of, perform, display or otherwise exploit such intellectual property. This agreement commenced on April 29, 2013 and will continue to be in effect unless terminated by SINA should the Company breach the terms as provided in the agreement.
Basis of Presentation for the Reorganization. Since the Group and the Predecessor Operations are under common control, the accompanying consolidated financial statements include the assets, liabilities, revenue, expenses and cash flows that were directly attributable to the Predecessor Operations for all periods presented. The assets and liabilities have been stated at historical carrying amounts. In addition, the accompanying consolidated financial statements have been prepared as if the current corporate structure, including the transfer of Weibo Interactive in December 2013 and Weibo Funds in June 2015, had been in existence throughout the periods presented.
Only those assets and liabilities that are specifically identifiable to Weibo business are included in the Group’s consolidated balance sheets. Accounts receivable amounts directly related to Weibo but for which SINA will receive payments and remit payments to the Group are included in the accounts receivable due from SINA, and, if any uncollectible losses arise from the accounts receivable due from SINA, such losses will pass through to the Group. Liabilities directly related to Weibo but for which SINA will make payments and receive reimbursements from the Group are included in the accrued liabilities due to related parties. The Group was liable for a payable to SINA for assets and liabilities incurred by SINA for the development of the Weibo business and presented as amount due to SINA in the consolidated balance sheets. Loan from SINA is presented under cash flow from financing activities in the consolidated statements of cash flows, whereas cash payment for billings from SINA for costs and expenses allocated is presented under operating activities. The Group’s statements of income (loss) and comprehensive income (loss) consists all the related costs and expenses of the Weibo business, including allocation to the cost of revenues, sales and marketing expenses, product development expenses, and general and administrative expenses, which are incurred by SINA but related to the Weibo business. These allocations were based on proportional cost allocation by considering proportion of the revenues, infrastructure usage metrics and labor usage metrics, among other things, attributable to the Group and are made on a basis considered reasonable by management. Income tax liability is calculated based on a separate return basis as if the Group had filed a separate tax return.
Total expenses allocated from SINA were as follows:
However, while the expenses allocated to the Group for these items are not necessarily indicative of the expenses that would have been incurred if the Group had been a separate and independent entity, the Company does not believe that there is any significant difference between the nature and amount of these allocated expenses and the expenses that would have been incurred if the Group had been a separate and stand-alone entity. The decrease in total expenses allocated from SINA was mainly attributed to the Company building up its own operational functions and signing agreements with vendors under its own legal entities, resulting in less reliance on the services from SINA.
Combination and Consolidation
The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, the VIE, of which the Company is the primary beneficiary, Weibo Interactive, an investment from July 2011 to May 2013, and Weibo Funds, which were purchased from SINA in June 2015. The transfers of Weibo Interactive in December 2013 and Weibo Funds in June 2015 were accounted for as business combinations between entities under common control. Therefore, in accordance with ASC Subtopic 805-50, the consolidated financial statements of the Group presented for prior periods retrospectively adjusted to reflect the transfers on a consolidated basis from the first day that SINA took control of Weibo Interactive and Weibo Funds. All significant intercompany balances and transactions have been eliminated.
To comply with PRC laws and regulations, the Group provides a substantial amount of its services in China via the VIE, which holds critical operating licenses that enable the Group to do business in China. Most of the Group’s revenues, costs and net income (loss) in China were generated directly or indirectly through the VIE or the Predecessor Operations. The Company, through its subsidiary, has signed various agreements with the VIE to allow the transfer of economic benefits from the VIE to the Company. The Group has determined that it is the primary beneficiary of the VIE through Weibo Technology’s contractual arrangements with the VIE. Accordingly, the Company has consolidated the VIE’s results of operations and assets and liabilities in the Group’s financial statements pursuant to the United States Generally Accepted Accounting Principles (“US GAAP”) for all the periods presented.
Shareholders of the VIE are certain nominee shareholders of the Company or SINA. The capital for their investments in the VIE is funded by the Company and recorded as interest-free loans to these individuals. These loans were eliminated with the capital of the VIE during consolidation. Each shareholder of the VIE has agreed to transfer his equity interest in the VIE to Weibo Technology when permitted by PRC laws and regulations or to designees of the Company at any time for the amount of loans outstanding. All voting rights of the VIE, including without limitation the right to appoint all directors of the VIE, have been assigned to Weibo Technology. Weibo Technology has also entered into exclusive technical service agreements with the VIE under which Weibo Technology provides technical and other services to the VIE in exchange for substantially all net income of the VIE. In addition, the shareholders of the VIE have pledged their shares in the VIE as collateral for the non-payment of loans or for the technical and other services fees due to Weibo Technology. As of December 31, 2014 and 2015, the total amount of interest-free loans to VIEs’ shareholders was $10.5 million and $10.0 million, respectively. As of December 31, 2014 and 2015, the aggregate accumulated loss of VIEs and VIEs’ subsidiaries was $22.2 million and $32.8 million, respectively, which were included in the Group’s consolidated financial statements.
The following table sets forth the assets, liabilities, results of operations and cash flows of the VIE and the VIE’s subsidiaries taken as a whole, including the Predecessor Operations, which are included in the Group’s consolidated balance sheets and statements of income (loss) and comprehensive income (loss):
Under the contractual arrangements with the VIE, the Company has the power to direct activities of the VIE through Weibo Technology and can have assets transferred freely out of the VIE without restrictions. Therefore, the Company considers that there is no asset of the VIE that can only be used to settle obligations of the VIE and its subsidiaries, except for the registered capital and non-distributable reserve funds of the VIE and its subsidiaries, amounting to $47.4 million and $51.9 million as of December 31, 2014 and 2015, respectively. Since the VIE is incorporated as limited liability company under the PRC Company Law, creditors of the VIE do not have recourse to the general credit of the Company. There is currently no contractual arrangement that would require the Company to provide additional financial support to the VIE. As the Company is conducting certain businesses mainly through the VIE, the Company may provide such support on a discretionary basis in the future, which could expose the Company to a loss. The total amount of advertising and marketing service provided by the VIE to related parties was $51.5 million, $135.1 million and $183.7 million for the years ended December 31, 2013, 2014 and 2015, respectively. The total amount of costs and expenses allocated from SINA to the VIE was $37.2 million, $16.1 million and $8.4 million for the years ended December 31, 2013, 2014 and 2015, respectively. In December 2013, the Group purchased all of the equity interest of a company providing the game platform maintenance services from SINA for a consideration of $10.1 million. In June 2015, the Group purchased all of SINA’s equity interest in the two Weibo funds for a consideration of $22.0 million.
Unrecognized revenue-producing assets held by the VIE include the Internet Content Provision License, the Online Culture Operating Permit, and the domain names of weibo.com, weibo.cn and weibo.com.cn. Recognized revenue-producing assets held by the VIE include customer lists relating to game-related services, game platform technology and a non-compete agreement, which were acquired mostly through acquisitions. Unrecognized revenue-producing assets, including customer lists relating to advertising and marketing services, game-related services, VIP Memberships and data licensing, as well as trademarks, are also held by Weibo Technology, the WFOE.
The following is a summary of VIE agreements:
Loan Agreements. The Company’s wholly owned subsidiary Weibo Technology has granted interest-free loans to each shareholder of the VIE with the sole purpose of providing funds necessary for capital injection into the VIE. The terms of the loans are for 10 years, and Weibo Technology has the right to, at its own discretion, shorten or extend the terms of the loans, if necessary. These loans were eliminated with the capital of the VIE during consolidation.
Share Transfer Agreements. Each shareholder of the VIE has granted Weibo Technology an option to purchase his shares in the VIE at a purchase price equal to the amount of the capital injection. Weibo Technology may exercise such option at any time until it has acquired all the shares of the VIE, subject to applicable PRC laws. The option will be effective until the earlier of (i) the shareholders of the VIE and Weibo Technology have fully performed their obligations under this agreement, and (ii) the respective shareholders of the VIE and Weibo Technology agree to terminate the share transfer agreement in writing.
Loan Repayment Agreements. Each shareholder of the VIE has agreed with Weibo Technology that the interest-free loans under the loan agreements shall only be repaid through share transfer. Once the share transfers are completed, the purchase price for the share transfer will be set off against the loan repayment.
Agreements on Authorization to Exercise Shareholder’s Voting Power. Each shareholder of the VIE has authorized Weibo Technology to exercise all his voting power as a shareholder of the VIE on all matters requiring shareholders’ approval under PRC laws and regulations and the articles of association of the VIE, including without limitation to the appointment of directors, transfer, mortgage or dispose of the VIE’s assets, transfer of any equity interest in the VIE, and merger, split, dissolution and liquidation of the VIE. The authorizations are irrevocable and will not expire until the VIE dissolves.
Share Pledge Agreements. Each shareholder of the VIE has pledged all of his shares in the VIE and all other rights relevant to the share rights to Weibo Technology, as a collateral security for his obligations to pay off all debts to Weibo Technology, under the loan agreement and for the payment obligations of the VIE under the trademark license agreement and the technical services agreement. In the event of default of any payment obligations, Weibo Technology will be entitled to certain rights, including transferring the pledged shares to itself and disposing the pledged shares through sale or auction. During the term of each agreement, Weibo Technology is entitled to receive all dividends and distributions paid on the pledged shares. The pledges will be effective until the earlier of (i) the VIE and the shareholders of the VIE have fully performed their obligations under the above-referred agreements, and (ii) Weibo Technology unilaterally consents to terminate the respective share pledge agreement.
Exclusive Technical Services Agreement, Exclusive Sales Agency Agreement and Trademark License Agreement. The VIE has entered into an exclusive technical services agreement, an exclusive sales agency agreement and a trademark license agreement with Weibo Technology. Under the exclusive technical services agreement, Weibo Technology is engaged to provide technical services for the VIE’s online advertising and other related businesses. Under the exclusive sales agency agreement, the VIE has granted Weibo Technology the exclusive right to distribute, sell and provide agency services for all the products and services provided by the VIE. The term of the technical service agreement and the sales agency agreement will not expire until the VIE dissolves.
Due to its control over the VIE, Weibo Technology has the right to determine the service fee to be charged to the VIE under these agreements. By considering, among other things, the technical complexity of the service, the actual cost that may be incurred for providing such service, the operations of the VIE, applicable tax rates, planned capital expenditure and business strategies. Weibo Technology charged an amount of $79.2 million, $187.8 million and $232.4 million in service fees from the VIE under these agreements for the years ended December 31, 2013, 2014 and 2015, respectively, which was determined based on the actual cost incurred for providing such service and the cash position and operation of the VIE.
Under the trademark license agreement, Weibo Technology has granted the VIE trademark licenses to use its trademarks for specific areas, and the VIE is obligated to pay license fees to Weibo Technology. The term of the agreement is for one year and is automatically renewed provided that there is no objection from Weibo Technology.
The Company believes that the contractual arrangements among its subsidiary, the VIE and the VIE’s shareholders are in compliance with the current PRC laws and legally enforceable. However, uncertainties in the interpretation and enforcement of the PRC laws, regulations and policies could limit the Company’s ability to enforce these contractual arrangements. As a result, the Company may be unable to consolidate the VIE and the VIE’s subsidiaries in the consolidated financial statements. The Company’s ability to control the VIE also depends on the authorization by the shareholders of the VIE to exercise voting rights on all matters requiring shareholder approval in the VIE. The Company believes that the agreements on authorization to exercise shareholder’s voting power are legally enforceable. In addition, if the legal structure and contractual arrangements with the VIE were found to be in violation of any future PRC laws and regulations, the Company may be subject to fines or other actions. The Company believes the possibility that it will no longer be able to control and consolidate the VIE will occur as a result of the aforementioned risks and uncertainties are remote.
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- Definition The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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2. Significant Accounting Policies
Basis of presentation and use of estimates
The preparation of the Group’s consolidated financial statements is in conformity with US GAAP, which requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from such estimates. The Group believes the basis of combination and consolidation, revenue recognition, fair value accounting, income taxes, goodwill and other long-lived assets, allowances for doubtful accounts, stock-based compensation, and the determination of the estimated useful lives of assets reflect the more significant judgments and estimates used in the preparation of its consolidated financial statements.
Non-controlling interests
For the Company’s majority-owned subsidiaries and VIE, non-controlling interests are recognized to reflect the portion of their equity that is not attributable, directly or indirectly, to the Company as the controlling shareholder. To reflect the economic interest held by non-controlling shareholders, net income (loss) attributable to the non-controlling ordinary shareholders is recorded as non-controlling interests in the Company’s consolidated statements of comprehensive income (loss). Non-controlling interests are classified as a separate line item in the equity section of the Company’s consolidated balance sheets and have been separately disclosed in the Company’s consolidated financial statements to distinguish the interests from that of the Company.
Fair value measurements
Financial instruments
All financial assets and liabilities are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability.
Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value:
The carrying amount of cash and cash equivalents, short-term investments, accounts receivable due from third parties, accounts receivable due from Alibaba, accounts receivable due from SINA and other related parties, accounts payable, amount due to SINA, accrued liabilities due to third parties and employees and accrued liabilities due to related parties approximates fair value because of their short-term nature. See Note 15 Financial Instruments for additional information.
Cash equivalents
The Group considers all highly liquid investments with original maturities of three months or less as cash equivalents. Cash equivalents are comprised of investments in time deposits stated at cost plus accrued interest.
Long-term investments
Long-term investments are comprised of investments in publicly traded and privately held companies. For long-term investments over which the Group does not have significant influence, the cost method of accounting is used. For long-term investments in shares that are not common stock or in-substance common stock and that do not have readily determinable fair value, the cost method accounting is used. The Group uses the equity method to account for ordinary-share-equivalent equity investments over which it has significant influence but does not own a majority equity interest or otherwise control. The Group used the equity method to account for the investment in Weibo Interactive prior to May 2013, when it had significant influence but did not control Weibo Interactive.
The Group monitors its investments accounted for under the cost method and equity method for other-than-temporary impairment by considering factors such as current economic and market conditions and the operating performance of the business, including current earnings trends, undiscounted cash flows, and other company-specific information, such as recent financing rounds. Determination of the fair value, particularly for investments in privately-held companies whose revenue model is unclear, requires significant judgment to determine appropriate estimates and assumptions. Changes in these estimates and assumptions could affect the calculation of the fair value of the investments and the determination of whether any identified impairment is other-than-temporary. If any impairment is considered other-than-temporary, the Group will write down the asset to its fair value and take the corresponding charge to the consolidated statements of income (loss) and comprehensive income (loss). The Group recorded an impairment charge of $1.9 million, $2.5 million and $6.6 million to the carrying value of long-term investments for the years ended December 31, 2013, 2014 and 2015, respectively.
The Group invests in marketable equity securities to meet business objectives and intends to hold the securities for more than a year from the balance sheet date. These marketable securities are reported at fair value, classified and accounted for as available-for-sale securities under long-term investments. The treatment of a decline in the fair value of an individual security is based on whether the decline is other-than-temporary. The Group assesses its available-for-sale securities for other-than-temporary impairment by considering factors including, but not limited to, its ability and intent to hold the individual security, severity of the impairment, expected duration of the impairment and forecasted recovery of fair value. Investments classified as available-for-sale securities are reported at fair value with unrealized gains or losses, if any, recorded in accumulated other comprehensive loss in shareholders’ equity. If the Group determines a decline in fair value is other-than-temporary, the cost basis of the individual security is written down to fair value as a new cost basis and the amount of the write-down is accounted for as a realized loss charged to the consolidated statements of income (loss). The fair value of the investment would then become the new cost basis of the investment and is not adjusted for subsequent recoveries in fair value.
Business combination
Business combinations are recorded using the purchase method of accounting, and the cost of an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any non-controlling interests. The excess of the (i) the total of consideration paid, fair value of the non-controlling interests and acquisition date fair value of any previously held equity interest in the subsidiary acquired over (ii) the fair value of the identifiable net assets of the subsidiary acquired is recorded as goodwill. If the consideration of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the consolidated statements of comprehensive income (loss).
In a business combination achieved in stages, the Company remeasures its previously held equity interest in the acquiree immediately before obtaining control at its acquisition-date fair value and the re-measurement gain or loss, if any, is recognized in earnings. The determination and allocation of fair values to the identifiable assets acquired, liabilities assumed and noncontrolling interests is based on various assumptions and valuation methodologies requiring considerable judgment from management. The most significant variables in these valuations are discount rates, terminal values, the number of years on which to base the cash flow projections, as well as the assumptions and estimates used to determine the cash inflows and outflows. The Company determines discount rates to be used based on the risk inherent in the related activity’s current business model and industry comparisons. Terminal values are based on the expected life of assets, forecasted life cycle and forecasted cash flows over that period.
Long-lived assets
Property and equipment
Property and equipment are stated at cost less accumulated depreciation, amortization and impairment, if any. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally from three to four years for computers and equipment and five years for furniture and fixtures. Leasehold improvements are amortized over the shorter of the estimated useful lives of the assets or the remaining lease term. Depreciation expenses were $21.3 million, $21.8 million and $19.5 million for the years ended December 31, 2013, 2014 and 2015, respectively.
Goodwill
Goodwill represents the excess of the purchase price over the fair value of the identifiable assets and liabilities acquired as a result of the Group’s acquisitions of interests in its subsidiaries and consolidated VIE. The Group assesses goodwill for impairment in accordance with ASC Subtopic 350-20 (“ASC 350-20”), Intangibles - Goodwill and Other: Goodwill, which requires that goodwill be tested for impairment at the reporting unit level at least annually and more frequently upon the occurrence of certain events, as defined by ASC 350-20. US GAAP provides the option to apply the qualitative assessment first and then the quantitative assessment, if necessary, or to apply the quantitative assessment directly. The qualitative approach starts the goodwill impairment test by assessing qualitative factors, which by taking into consideration of macroeconomics, overall financial performance, industry and market conditions and the share price of the Group, to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If so, the quantitative impairment test is performed; otherwise, no further testing is required. The quantitative impairment test consists of a comparison of the fair value of goodwill with its carrying value. For reporting units directly applying a quantitative assessment, the goodwill impairment test is quantitatively performed by comparing the fair values of those reporting units to their carrying amounts. The Group adopted the option to apply the qualitative approach to assess its goodwill on the relevant reporting units. Application of a goodwill impairment test requires significant management judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value of each reporting unit. Judgment in estimating the fair value of reporting units includes estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit.
Intangible assets other than goodwill
Intangible assets arising from acquisitions are recognized at fair value upon acquisition and amortized on a straight-line basis over their estimated useful lives, generally from two to five years. Long-lived assets and certain identifiable intangible assets other than goodwill to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of any impairment loss for long-lived assets and certain identifiable intangible assets that management expects to hold or use is based on the amount by which the carrying value exceeds the fair value of the asset. Judgment is used in estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these estimates and assumptions could materially affect the determination of the asset’s fair value.
Stock-based compensation
All stock-based awards to employees and directors, such as stock options and restricted share units (“RSUs”), are measured at the grant date based on the fair value of the awards. Stock-based compensation, net of forfeitures, is recognized as expenses on a straight-line basis over the requisite service period, which is the vesting period.
The Group uses the Black-Scholes option pricing model to estimate the fair value of stock options. The determination of estimated fair value of stock-based payment awards on the grant date using an option pricing model is affected by the fair value of the Company’s ordinary shares as well as assumptions regarding a number of complex and subjective variables. These variables include the expected value volatility of the Company over the expected term of the awards, actual and projected employee stock option exercise behaviors, a risk-free interest rate and expected dividends, if any. Options granted generally vest over four years.
The Group recognizes the estimated compensation cost of service-based restricted share units based on the fair value of its ordinary shares on the date of the grant. The Group recognizes the compensation cost, net of estimated forfeitures, over a vesting term of generally four years.
Forfeitures are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates. The Group uses historical data to estimate pre-vesting option and records stock-based compensation expense only for those awards that are expected to vest. See Note 7 Stock-based Compensation for further discussion on stock-based compensation.
Prior to the IPO, the determination of estimated fair value of Weibo required complex and subjective judgments due to their limited financial and operating history, unique business risks and limited public information on companies in China similar to Weibo. The Group, with the assistance of an independent valuation firm, evaluated the use of two generally accepted valuation approaches. The income approach was used if a revenue model had been established, the market approach was used if information from comparable companies had been available, or a weighted blend of these two approaches was used if more than one was applicable, to estimate the enterprise value for purposes of recording stock-based compensation in connection with employee stock options and recording fair value changes for option liability to Alibaba. For the market approach, the Group selected guideline companies that engaged in a similar line of business with similar growth prospects and that were subject to similar financial and business risks. Prior to the IPO, the income approach was applied when the revenue model for Weibo had been established and projections of revenues, costs and expenses, incremental working capital and capital expenditures became available as the business developed. After the IPO, the closing market price of the underlying shares on the last trading date prior to the grant dates is applied in determining the fair value of the options and RSUs granted. Changes in these estimates and assumptions could materially affect the determination of fair value of stock-based compensation.
Allowances for doubtful accounts
The Group maintains an allowance for doubtful accounts which reflects its best estimate of amounts that will not be collected. The Group determines the allowance for doubtful accounts based on a historical, rolling average, bad debt rate in the prior period and other factors, such as credit-worthiness of the customers and the age of the receivable balances. The Group also provides specific provisions for bad debts when facts and circumstances indicate that the receivable is unlikely to be collected. If the financial condition of the Group’s customers were to deteriorate, resulting in an impairment of their ability to make payments, more bad debt allowances may be required.
Revenue recognition
Advertising and marketing revenues
Advertising and marketing revenues are derived principally from online advertising, including social display ads and promoted marketing. Social display ad arrangements allow customers to place advertisements on particular areas of the Group’s platform in particular formats and over particular periods of time, which is typically no more than three months. The Group enters into cost per mille (“CPM”), or cost per thousand impressions, advertising arrangements with the customers, under which the Group recognizes revenues based on the number of times that the advertisement has been displayed. The Group also enters into cost per day (“CPD”) advertising arrangements with customers, under which the Group recognizes revenues ratably over the contract periods.
Promoted marketing arrangements are primarily priced based on CPM or cost per engagement (“CPE”). An engagement may include when a user clicks on a link, becomes a follower of the marketing customer account, shares the promoted feed or marks the feed as a favorite. Under the CPM model, customers are obligated to pay when the advertisement is displayed, while under the CPE model, customers are obligated to pay based on the number of engagements with the promoted feed.
Revenues are recognized only when the following criteria have been met: (1) persuasive evidence of an arrangement exists; (2) the price is fixed or determinable; (3) the service is performed; and (4) collectability of the related fee is reasonably assured. The majority of the Group’s revenue transactions are based on standard business terms and conditions, which are recognized net of agency rebates. Advertising arrangements involving multiple deliverables are broken down into single-element arrangements based on their relative selling price for revenue recognition purposes. For multiple-deliverable revenue arrangements, it is required that the arrangement consideration to be allocated to all deliverables at the inception of the arrangement on the following basis: (a) vendor-specific objective evidence (VSOE) of selling price, if it exists, otherwise, (b) third-party evidence (TPE) of the selling price. If neither (a) nor (b) exists, then use (c) management’s best estimate of the selling price of the deliverable. The Group primarily uses VSOE to allocate the arrangement consideration if such selling price is available. For the deliverables that have not been sold separately, the best estimate of the selling price (BESP) is used, which has taken into consideration of the pricing of advertising areas of the Group’s platform with similar popularity and advertisements with similar format and quoted prices from competitors and other market conditions. Revenues recognized with reference to BESP were immaterial for all periods presented. The Group recognizes revenues on the elements delivered and defers the recognition of revenues for the undelivered elements until the remaining obligations have been satisfied.
Revenues from barter transactions are recognized during the period in which the advertisements are displayed on the Group’s properties. Barter transactions in which physical goods or services (other than advertising services) are received in exchange for advertising services are recorded based on the fair values of the goods or services received. Revenues from barter transactions were immaterial for all periods presented.
Other revenues
The Group generates other revenues principally from fee-based services, including game-related services, VIP membership and data licensing. Revenues from these services are recognized over the periods in which the services are performed, provided that no significant obligations remain, collection of the receivable is reasonably assured and the amounts can be accurately estimated.
Game-related services. Game-related service revenues are mostly generated from the sale of virtual items from games operated by the Group. The Group collects payments from the game players in connection with the sale of virtual currency, which are converted into in-game credits (game tokens) that can be used to purchase virtual items in the third-party developed games. The Group remits certain predetermined percentages of the proceeds to the game developers when the virtual currency is converted into in-game credits.
The Group has determined that the game developers are the primary obligors for the game-related service given that the game developers are responsible for developing, maintaining and updating the game related services and have reasonable latitude to establish the prices of virtual items for which in-game credits are used. The Group views the game developers to be its customers, and the Group’s primary responsibility is to promote the games of the developers, provide virtual currency exchange service, maintain the platform for game players to easily access the games and offer customer support to resolve registration, log-in, currency exchange and other related issues. Accordingly, the Group records game-related revenue, net of predetermined revenue sharing with the game developers.
Virtual currencies in general are not refundable once they have been sold unless there are unused in-game credits at the time a game is discontinued. Sale of virtual currencies net of the game developer proceeds are recognized as revenues over the estimated consumption period of in-game virtual items, which is typically from a few days to one month after the purchase of in-game credits.
VIP Membership. VIP Membership is a service package consisting of user certification and preferential benefits, such as daily priority listings and higher quota for following user accounts. Prepaid VIP membership fees are recorded as deferred revenue and recognized as revenue ratably over the contract period of the membership service.
Data licensing. The Group began to offer data licensing arrangements that allow its customers to access, search and analyze historical and real-time data on its platform. The data licensing arrangement is for a fixed period, typically one year, and such revenue is recognized ratably over the contract period.
Deferred revenues
Deferred revenues consist of contractual billings in excess of recognized revenue and payments received in advance of revenue recognition, which are mainly from the customer advance of the advertising and marketing services and the sales of the fee-based services, such as virtual currency or in-game virtual items sold for game related services and VIP membership.
Cost of revenues
Cost of revenues consists mainly of costs associated with the maintenance of platform, which primarily include bandwidth and other infrastructure costs, labor cost and turnover tax levied on the revenues, part of which were allocated from SINA (see Note 1 Reorganization). The Group presents taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction on a gross basis in the financial statements. In November 2011, the Ministry of Finance and the State Administration of Taxation promulgated the Pilot Program for Imposition of Value-Added Tax (“VAT”) to Replace Business Tax (“Pilot Program”). Pursuant to the Pilot Program, a VAT was initially imposed in Shanghai starting from January 1, 2012, to replace the business tax in the transport and shipping industry and some of the modern service industries. Effective September 1, 2012, the Pilot Program was expanded to eight other cities and provinces in China, including Beijing. Beginning from August 1, 2013, the Pilot Program was expanded to all regions in PRC. With the implementation of the Pilot Program, the Group is subject to 6.7% VAT and surcharges and 3% cultural business construction fees for certain parts of its advertising and marketing revenues. Prior to the Pilot Program, the Group was subject to 5.6% business tax and surcharges and 3% cultural business construction fees. The total amount of such taxes on its advertising and marketing revenues for the years ended December 31, 2013, 2014 and 2015 were $12.5 million, $23.2 million and $35.3 million, respectively. For other revenues, the business tax and surcharges were 5.6% before the implementation of the Pilot Program and became 6.7% after switching over to the VAT. The implementation of the Pilot Program has not had a significant impact on the Group’s consolidated statements of income (loss) and comprehensive income (loss) for the years ended December 31, 2013, 2014 and 2015.
Advertising expenses
Advertising expenses consist primarily of costs for the promotion of corporate image and product marketing, part of which were allocated from SINA (see Note 1 Reorganization). The Group expenses all advertising costs as incurred and classifies these costs under sales and marketing expenses. For the years ended December 31, 2013, 2014 and 2015, the advertising expenses were $33.2 million, $71.0 million and $81.2 million, respectively.
Product development expenses
Product development expenses consist primarily of payroll-related expenses and infrastructure cost incurred for enhancement to and maintenance of the Group’s platform as well as costs associated with new product development and product enhancements, part of which were allocated from SINA (see Note 1 Reorganization). The Group expenses all costs incurred for the planning and post implementation phases of development and costs associated with repair or maintenance of the existing site or the development of platform content. Since inception, the amount of costs qualifying for capitalization has been immaterial and, as a result, all product development costs have been expensed as incurred.
Operating leases
The Group leases office space under operating lease agreements with initial lease term up to three years. Rental expense is recognized from the date of initial possession of the leased property on a straight-line basis over the term of the lease, part of which were allocated from SINA (see Note 1 Reorganization). Certain lease agreements contain rent holidays, which are recognized on a straight-line basis over the lease term. Lease renewal periods are considered on a lease-by-lease basis and are generally not included in the initial lease terms. The allocated rental expenses from SINA for the years ended December 31, 2013, 2014 and 2015, were $3.2 million, $4.0 million and $3.5 million, respectively.
Taxation
Income taxes
Income taxes are accounted for using the asset and liability approach. Under this approach, income tax expense is recognized for the amount of taxes payable or refundable for the current year. In addition, deferred tax assets and liabilities are recognized for expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carry forwards. The Group records a valuation allowance to reduce deferred tax assets to an amount for which realization is more likely than not. Income tax liability is calculated based on a separate return basis as if the Group had filed separate tax returns before the Reorganization.
Uncertain tax positions. To assess uncertain tax positions, the Group applies a more likely than not threshold and a two-step approach for the tax position measurement and financial statement recognition. Under the two-step approach, the first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement.
Foreign currency
The Company’s reporting currency and functional currency are the U.S. dollar. The Group’s operations in China and in international regions use their respective currencies as their functional currencies. The financial statements of these subsidiaries are translated into U.S. dollars using period-end rates of exchange for assets and liabilities and average rates of exchange in the period for revenues, costs and expenses. Translation gains and losses are recorded in accumulated other comprehensive income or loss as a component of shareholders’ equity. Translation gains or losses are not released to net income (loss) unless the associated net investment has been sold, liquidated, or substantially liquidated.
Foreign currency transactions denominated in currencies other than the functional currency are translated into the functional currency using the exchange rate prevailing on the transactions dates. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency using the applicable exchange rates at the balance sheet dates. Net gains and losses resulting from foreign exchange transactions are included in interest and other income (expense), net.
Foreign currency translation adjustments included in the Group’s consolidated income (loss) and comprehensive income (loss) for the years ended December 31, 2013, 2014 and 2015 were loss of $0.2 million, $1.5 million and $7.9 million, respectively. Net foreign currency transaction gains or losses arise from transacting in a currency other than the functional currency of the entity and the amounts recorded were immaterial for each of the periods presented.
Net Income (loss) per share
Basic net income (loss) per share is computed using the weighted average number of ordinary shares outstanding during the period. Options and RSUs are not considered outstanding in computation of basic earnings per share. Diluted net income (loss) per share is computed using the weighted average number of ordinary shares and potential ordinary shares outstanding during the period under treasury stock method. Potential ordinary shares include options to purchase ordinary shares and RSUs, unless they were anti-dilutive. The computation of diluted net income (loss) per share does not assume conversion, exercise, or contingent issuance of securities that would have an anti-dilutive effect (i.e. an increase in earnings per share amounts or a decrease in loss per share amounts) on net income (loss) per share.
Loss per share is computed in accordance with ASC 260, Earnings per Share. The two-class method is used for computing earnings per share in the event the Group has net income available for distribution. Under the two-class method, net income is allocated between ordinary shares and participating securities based on dividends declared (or accumulated) and participating rights in undistributed earnings as if all the earnings for the reporting period had been distributed. The Company’s convertible preferred shares are participating securities because they are entitled to receive dividends or distributions on an as converted basis. For the periods prior to the Company’s IPO, the computation of basic loss per share using the two-class method was not applicable as the Group was in a net loss position and net loss is not allocated to other participating securities, since these securities are not obligated to share the losses in accordance with the contractual terms.
Segment reporting
In accordance with ASC 280, Segment Reporting, the Group’s chief operating decision maker (“CODM”), the Chief Executive Officer, reviews the consolidated results when making decisions about allocating resources and assessing performance of the Group as a whole. The Group currently operates and manages its business in two principal business segments globally—advertising and marketing services and other services. Information regarding the business segments provided to the Group’s CODM is at the revenue level and the Group currently does not allocate operating costs or assets to its segments, as its CODM does not use such information to allocate resources or evaluate the performance of the operating segments. As the Group’s long-lived assets are substantially all located in the PRC and substantially the Group’s revenues are derived from within the PRC, no geographical segments are presented.
Concentration of risks
Concentration of credit risk. Financial instruments that potentially subject the Group to a concentration of credit risk consist primarily of cash and cash equivalents, short-term investments and accounts receivable. In addition, with the majority of its operations in China, the Group is subject to RMB currency risk and offshore remittance risk, both of which have been difficult to hedge and the Group has not done so. The Group limits its exposure to credit loss by depositing its cash and cash equivalents with financial institutions in the US, PRC and Hong Kong, which are among the largest and most respected with high ratings from internationally-recognized rating agencies, that management believes are of high credit quality. The Group periodically reviews these institutions’ reputations, track records and reported reserves.
As of December 31, 2014 and 2015, the Group had $448.5 million and $334.6 million in cash and bank time deposits (with terms generally up to twelve months) with large domestic banks in China, respectively. China promulgated a Bankruptcy Law that came into effect on June 1, 2007, which contains a separate article expressly stating that the State Council may promulgate implementation measures for the bankruptcy of Chinese banks based on the Bankruptcy Law. Under the Bankruptcy Law, a Chinese bank may go bankrupt. In addition, since China’s concession to WTO, foreign banks have been gradually permitted to operate in China and have become significant competitors to Chinese banks in many aspects, especially since the opening of RMB business to foreign banks in late 2006. Therefore, the risk of bankruptcy on Chinese banks in which the Group holds cash and bank deposits has increased. In the event that a Chinese bank that holds the Group’s deposits goes bankrupt, the Group is unlikely to claim its deposits back in full, since it is unlikely to be classified as a secured creditor to the bank under the PRC laws.
Alibaba accounted for 26%, 32% and 30% of the Group’s total revenue for the years ended December 31, 2013, 2014 and 2015, respectively. Excluding revenues from Alibaba, most of the Group’s advertising and marketing revenues were from advertising agencies. The Group’s top 10 advertising agencies in China contributed to 20%, 14%, and 15% of the Group’s total revenues for the years ended December 31, 2013, 2014, and 2015, respectively.
As of December 31, 2014 and 2015, substantially all accounts receivable were derived from the Group’s China operations. Excluding accounts receivable due from Alibaba, SINA and other related parties, accounts receivable primarily consists of amounts due from advertising agencies and direct customers. Alibaba accounted for 54% of the Group’s net accounts receivable as of December 31, 2014, and Alibaba and a customer accounted for 45% and 16%, respectively, of the Group’s net accounts receivable as of December 31, 2015.
Concentration of foreign currency risks. For the years ended December 31, 2013, 2014 and 2015, the majority of the Group’s revenues derived and expenses incurred were in RMB. As of December 31, 2014 and 2015, the Group’s cash, cash equivalents and short-term investments balance denominated in RMB was $10.4 million and $157.9 million, accounting for 2% and 47% of the Group’s total cash, cash equivalents and short-term investments balance. As of December 31, 2014 and 2015, the Group’s aggregate net accounts receivable balance (including accounts receivable due from third parties, Alibaba, SINA and other related parties) denominated in RMB was $120.1 million and $120.1 million, respectively, accounting for almost all of its net accounts receivable balance. As of December 31, 2014 and 2015, the Group’s current liabilities balance denominated in RMB was $127.5 million and $197.9 million, accounting for 94% and 95% of its total current liabilities balance. Accordingly, the Group may experience economic losses and negative impacts on earnings and equity (deficit) as a result of exchange rate fluctuations of RMB. Moreover, the Chinese government imposes controls on the convertibility of RMB into foreign currencies and, in certain cases, the remittance of currency out of the PRC. The Group may experience difficulties in completing the administrative procedures necessary to remit its RMB out of the PRC and convert it into foreign currency.
Comprehensive income (loss)
Comprehensive income (loss) is defined as the change in equity of a company during a period from transactions and other events and circumstances excluding transactions resulting from investments from owners and distributions to owners. Comprehensive income (loss) for the periods presented includes net income (loss), change in unrealized losses on marketable securities classified as available-for-sale, and foreign currency translation adjustments.
Recent accounting pronouncements
In May 2014, the FASB issued, ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” The guidance substantially converges final standards on revenue recognition between the FASB and the International Accounting Standards Board providing a framework on addressing revenue recognition issues and, upon its effective date, replaces almost all exiting revenue recognition guidance, including industry-specific guidance, in current U.S. generally accepted accounting principles.
The core principle of the guidance is that an entity should recognize revenues to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. To achieve that core principle, an entity should apply the following steps:
Step 1: Identify the contract(s) with a customer. Step 2: Identify the performance obligations in the contract. Step 3: Determine the transaction price. Step 4: Allocate the transaction price to the performance obligations in the contract. Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation.
For a public entity, the amendments in this ASU are effective for annual reporting periods beginning after December 15, 2016, including interim periods within those reporting periods. In April 2015, the FASB proposed a one-year delay in the effective date and companies will be allowed to early adopt as of the original effective date. The Group is in the process of evaluating the impact of adoption of this guidance on the consolidated financial statements.
In August 2014, the FASB issued a new pronouncement Presentation of Financial Statements — Going Concern. This standard requires management to evaluate for each annual and interim reporting period whether it is probable that the reporting entity will not be able to meet its obligations as they become due within one year after the date that the financial statements are issued. If the entity is in such a position, the standard provides for certain disclosures depending on whether or not the entity will be able to successfully mitigate its going concern status. This guidance is effective for annual periods ending after December 15, 2016 and interim periods within annual periods beginning after December 15, 2016. Early application is permitted. The Group does not expect the adoption of this guidance will have a significant effect on its financial position, results of operations, or cash flows.
In February 2015, the FASB issued ASU 2015-02, “Consolidation (Topic 810) - Amendments to the Consolidation Analysis”, which provides guidance for reporting entities that are required to evaluate whether they should consolidate certain legal entities. In accordance with ASU 2015-02, all legal entities are subject to reevaluation under the revised consolidation model. ASU 2015-02 is effective for public business entities for annual periods, and interim periods within those annual periods, beginning after December 15, 2015. Early adoption is permitted. The Group is currently evaluating the impact on the adoption of ASU 2015-02 to its consolidated financial statements.
In April 2015, the FASB issued updated guidance which requires the issuer to presents the issuance costs of debt in the balance sheet as a direct deduction from the related debt liability rather than as an asset. This guidance will be effective beginning the first quarter of fiscal year 2016. The Group does not expect the adoption of the guidance will have a significant effect on its consolidated financial statements.
In September 2015, the FASB issued ASU No. 2015-16, “Simplifying the Accounting for Measurement-Period Adjustments”, which eliminates the requirement for acquirers in a business combination to account for measurement-period adjustments retrospectively. Instead, acquirers must recognize measurement-period adjustments during the period in which they determine the amounts, including the effect on earnings of any amounts that would have been recorded in previous periods if the accounting had been completed at the acquisition date. This update is effective for interim and annual periods beginning after December 15, 2015, with early adoption permitted. The Group does not expect the adoption of this guidance will have a significant effect on its consolidated financial statements.
In November 2015, the FASB issued updated guidance which requires deferred tax assets and liabilities to be presented as noncurrent on the balance sheet. This guidance was required to be adopted by reporting entities beginning the first quarter of fiscal year 2017 but early adoption is permitted. The Group early adopted the guidance and retrospectively reclassified approximately $18,000 of the current deferred tax assets from prepaid expenses and other current assets into other assets in the consolidated balance sheets as of December 31, 2014.The Group believes the adoption of the guidance does not have a significant effect on its consolidated financial statements.
In January 2016, the FASB issued updated guidance intended to improve the recognition and measurement of financial instruments. This guidance will be effective beginning the first quarter of fiscal year 2018. The Group is currently evaluating the impact this new guidance will have on its consolidated financial statements.
In February 2016, the FASB issued a new standard on leases, ASU No. 2016-2, which requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize a liability to make lease payments (the lease liability) and a right-of use representing its right to use the underlying asset for the lease term in the statements of financial position. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. This standard will be effective for the Group beginning the first quarter of fiscal year 2019. The Group is currently evaluating the impact that this new standard will have on its consolidated financial statements.
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- Definition The entire disclosure for all significant accounting policies of the reporting entity. Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Investment in Weibo |
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3. Investment in Weibo
On April 29, 2013 (“Transaction Date”), Alibaba Group Holding Limited (“Alibaba”) through its wholly owned subsidiary invested $585.8 million to purchase 30.0 million of preferred shares and 4.8 million of ordinary shares of the Company, representing an ownership interest of 18% on a fully diluted basis. The Company also granted an option to Alibaba to enable it to purchase additional ordinary shares and preferred shares and increase its ownership in Weibo up to 30% on a fully-diluted basis.
Preferred Shares
All of the preferred shares were converted to Class A ordinary shares upon the completion of the Group’s initial public offering on April 17, 2014. Immediately prior to the initial public offering, the Company’s preference shares comprised of the following:
Prior to the automatic conversion to ordinary share upon the Company’s initial public offering on April 17, 2014, the preference shares were entitled to certain preferences with respect to conversion, redemption, dividends and liquidation. The holders of preference shares were entitled to vote together with the holders of ordinary shares, and not as a separate class, on all matters submitted to a vote of the shareholders of the Company, on an as-if-converted basis.
Ordinary Shares
The ordinary shares held by Alibaba, recognized at an initial fair value of $54.2 million as of the Transaction Date, were purchased from the Group’s employees or from the Company for vested employee options repurchased. In order to facilitate the transaction, the Company issued ordinary shares to Alibaba on the Transaction Date and then repurchased the 3.5 million vested options from employees subsequent to the Transaction Date. The consideration for both the ordinary shares and vested options were paid to the Company first and then paid to the employees subsequently. The difference between the proceeds employees received and the fair value of the shares or vested options sold was considered to be compensation for past services in accordance with ASC 718-20. Therefore, a stock-based compensation of $27.1 million was recorded for the year ended December 31, 2013.
Option Liability
The Company granted an option to Alibaba to enable it to purchase additional ordinary shares and increase its ownership in the Company up to 30% on a fully-diluted basis. The call option shall expire immediately upon the earlier of the consummation of (i) any sale of shares by Alibaba of more than 25%, determined in the aggregate with all prior sales, of the acquired shares and (ii) the full exercise of the call option. Alibaba has the right to exercise the option, in whole or in part, at any time, commencing on the Transaction Date and ending on the consummation of a qualified IPO of Weibo. The exercise price of the option shall be equal to the lower of (i) an amount that represents a 15% discount to the IPO offering price per ordinary share in a qualified IPO offering and (ii) a price per ordinary share that implies an equity valuation (exclusive of the purchase price to be paid by Alibaba for these ordinary shares) of $5.5 billion for the Company on a fully diluted basis.
In accordance with ASC Subtopic 815-10, the option is deemed legally detachable and separately exercisable from the preferred and ordinary shares and, thus, accounted for as a freestanding instrument. As the strike price of the call option may be adjusted by the occurrence of a qualified IPO of Weibo, if any, it is not considered indexed to Weibo’s own stock. Accordingly, the call option was recorded as an investor option liability valued at $50.6 million as of the Transaction Date. For the years ended December 31, 2013 and 2014, $21.1 million of income and $47.0 million of losses, respectively, was recognized based on a subsequent change in fair value in the Group’s consolidated statements of income (loss) and comprehensive income (loss). See Note 15 for further details.
Immediately prior to the exercise of the option, the fair value of the investor option liability was approximately $76.5 million, with $47.0 million of losses recognized in the Group’s consolidated statements of loss and comprehensive loss in 2014. Alibaba fully exercised its option to increase its ownership in the Company to 30% on a fully diluted basis upon the IPO and acquired 29,990,778 Class A ordinary shares, which consists of (i) 21,067,300 shares acquired from SINA at a price that represents a 15% discount to the IPO price of the Company, (ii) 2,923,478 shares acquired from the Company at a price that represents a 15% discount to the IPO price through a concurrent private placement and (iii) 6,000,000 shares purchased from the Company at the IPO price. As part of a series of the transaction, the Company repurchased 2,923,478 ordinary shares from SINA with the US$42.2 million proceeds from the issuance of ordinary shares to Alibaba in the concurrent private placement. Among the acquired shares by Alibaba, 23,990,778 shares were purchased from SINA at a price representing 15% discount to its IPO price and 6,000,000 shares were purchased from the Company in the public offering at the IPO price. The discount of US$ 61.2 million borne by SINA on behalf of Weibo were considered as a deemed contribution from the shareholder. As Alibaba’s decision to waive the discount for the newly issued 6,000,000 Class A ordinary shares was motivated by its position as principle shareholder, the discount of US$15.3 million was also considered as a deemed contribution from the shareholder.
Amount due to SINA
In April 2013, the Group agreed to repay SINA for the cost of developing its business plus applicable interest payments. The interest on amount due to SINA is calculated based on actual spending incurred by SINA for the development of Weibo’s business at each period end. The consolidated statements of income (loss) and comprehensive income (loss) reflect a charge for interest on the amount due to SINA, as well as on the amounts included as accrued liabilities due to SINA at prevailing market interest rates by reference to the three-month time deposit rate of The People’s Bank of China, which ranged from 2.55% to 3.05%. The loans are repayable upon demand. There is no written agreement signed between SINA and Weibo and there are no fixed payment terms for the loan. In accordance with the agreements for the Alibaba Transaction, the Group is liable for a $250.0 million loan payable to SINA as of April 29, 2013, plus applicable interest payments and any additional outlays subsequent to the Transaction Date. On April 29, 2013, $8.5 million in interest due to SINA was waived, which was recorded as deemed contribution from SINA in the equity section of the consolidated balance sheets. The outstanding loan balance due to SINA was settled after the IPO with proceeds raised from the IPO. As of December 31, 2014 and 2015, Weibo had payments due to SINA in the amount of $24.3 million and $12.2 million, respectively, which were interest free and payable on demand. Such balances represented mainly the amounts payable to SINA for the Weibo Funds, which was settled in June 2015, and allocated expenses.
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- Definition Entire disclosure of sales of stock or previously unissued stock made to investors outside the consolidated group. No definition available.
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Cash, Cash Equivalents and Short-term Investments |
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4. Cash, Cash Equivalents and Short-term Investments
Cash, cash equivalents and short-term investments consist of the following:
The carrying amounts of cash, cash equivalents and short-term investments approximate fair values. Interest income for the years ended December 31, 2013, 2014 and 2015 was $3.8 million, $8.3 million and $5.5 million, respectively. The maturity dates of the bank time deposits were within one year.
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- Definition The entire disclosure of the components of cash, cash equivalents, and short-term investments. Short-term investments may include current marketable securities. No definition available.
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Long-term Investments |
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5. Long-term Investments
Long-term investments comprised of investments in privately held and publicly traded companies. The following sets forth the changes in the Group’s long-term investments:
As of December 31, 2014 and 2015, investments accounted for under the cost method were $50.6 and $281.7 million, respectively. Investments were accounted for under the cost method if the Group had no significant influence or if the underlying shares were not considered in substance ordinary shares and had no readily determinable fair value. For the year ended December 31, 2015, the Group made investments in private high tech companies totaling $252.3 million, which were accounted for under the cost method. These investments were made in general to help strengthen the Group’s ecosystem and included a $142.0 million investment in Didi and Kuaidi Taxi, an online transportation network company, through its holding company, Xiaoju Kuaizhi Inc., and a $70.0 million investment in a company which develops social applications.
Investments in marketable securities are held as available-for-sale (“AFS”) and reported at fair value. The Group invested $15.1 million in 2014 in a company accounted for as an AFS, which was marked to the fair value of $13.0 million and $12.8 million as of December 31, 2014 and 2015, respectively.
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