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Weibo Reports Third Quarter 2016 Financial Results

BEIJING, Nov. 21, 2016 /PRNewswire/ -- Weibo Corporation ("Weibo" or the "Company") (NASDAQ: WB), a leading social media in China, today announced its unaudited financial results for the third quarter ended September 30, 2016.

Third Quarter 2016 Highlights

  • Net revenues increased 42% year over year to $176.9 million, exceeding the Company's guidance between $168 million and $173 million.
  • Advertising and marketing revenue increased 48% year over year to $156.7 million.
  • Weibo Value-Added Services ("VAS") revenue increased 7% year over year to $20.2 million.
  • Net income attributable to Weibo increased 122% year over year to $32.1 million, and diluted net income per share was $0.14, compared to $0.07 for the same period last year.
  • Non-GAAP net income attributable to Weibo increased 147% year over year to $54.6 million, and non-GAAP diluted net income per share was $0.24, compared to $0.10 for the same period last year.
  • Adjusted EBITDA increased 117% year over year to $57.7 million, reaching an adjusted EBITDA margin of 33%.
  • Monthly active users ("MAUs") in September 2016 grew 34% year over year to 297 million, 89% of which were mobile users. Average daily active users ("DAUs") in September 2016 grew 32% year over year to 132 million.

"Weibo's key account and SME ad revenue has doubled from last year in constant currency for the third consecutive quarter, as we benefited from our brand, breadth of product offering and ad spending shifting toward mobile, social and video." said Gaofei Wang, Weibo's CEO. "Our efforts to build a content ecosystem that attracts premium user-generated content and our relentless focus on user experience have led to strong traffic growth. In the third quarter, we also saw strong operating leverage from our platform."

Third Quarter 2016 Financial Results

For the third quarter of 2016, Weibo reported net revenues of $176.9 million, compared to $124.7 million for the same period last year. Advertising and marketing revenue totaled $156.7 million, compared to $105.9 million for the same period last year. Advertising and marketing revenue from key accounts and small & medium-sized enterprises (SME) was $147.4 million, compared to $73.3 million for the same period last year. Revenue from Alibaba was $9.3 million, compared to $32.5 million for the same period last year. Weibo VAS revenue totaled $20.2 million, compared to $18.9 million for the same period last year.

Costs and expenses for the third quarter of 2016 totaled $134.0 million, compared to $110.8 million for the same period last year. Non-GAAP costs and expenses were $122.4 million, compared to $103.2 million for the same period last year. The increase in non-GAAP costs and expenses was primarily due to an increase in marketing expenses, value added taxes and bad debt expenses, with the latter two impacted by higher revenues.

Income from operations for the third quarter of 2016 was $42.9 million, compared to $13.9 million for the same period last year. Non-GAAP income from operations was $54.5 million, compared to $21.5 million for the same period last year. 

Non-operating loss for the third quarter of 2016 was $9.2 million, which included investment impairment of $11.1 million. Non-operating income for the same period last year was $1.4 million.

Net income attributable to Weibo for the third quarter of 2016 was $32.1 million, or diluted net income per share of $0.14, compared to $14.5 million for the same period last year, or diluted net income per share of $0.07. Non-GAAP net income attributable to Weibo for the third quarter of 2016 was $54.6 million, or diluted net income per share of $0.24, compared to $22.1 million for the same period last year, or diluted net income per share of $0.10.

As of September 30, 2016, Weibo's cash, cash equivalents and short-term investments totaled $479.4 million. For the third quarter of 2016, cash provided by operating activities was $89.8 million, capital expenditures totaled $1.3 million, and depreciation and amortization expenses amounted to $3.5 million.

Business Outlook 

For the fourth quarter of 2016, Weibo estimates that its net revenues to be between $205 million and $210 million. This forecast reflects Weibo's current and preliminary view, which is subject to change.

Non-GAAP Measures

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

The Company's non-GAAP financial measures exclude stock-based compensation, amortization of intangible assets, net gain on the sale of investments and impairment on investments, and dividend income, loss attributable to non-controlling interest, and income tax provision related to the amortization of intangible assets. Adjusted EBITDA excludes interest income, income tax expenses, and depreciation expenses. The Company's management uses these non-GAAP financial measures in their financial and operating decision-making, because management believes these measures reflect the Company's ongoing operating performance in a manner that allows more meaningful period-to-period comparisons. The Company believes that these non-GAAP financial measures provide useful information to investors and others in the following ways: (i) in comparing the Company's current financial results with the Company's past financial results in a consistent manner, and (ii) in understanding and evaluating the Company's current operating performance and future prospects in the same manner as management does, if they so choose. The Company also believes that the non-GAAP financial measures provide useful information to both management and investors by excluding certain expenses, gains (losses) and other items (i) that are not expected to result in future cash payments or (ii) that are non-recurring in nature or may not be indicative of the Company's core operating results and business outlook.

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

Conference Call

Weibo will host a conference call at 8 PM9 PM Eastern Time on November 21, 2016 (or 9 AM10 AM Beijing Time on November 22, 2016) to present an overview of the Company's financial performance and business operations. A live webcast of the call will be available through the Company's corporate website at http://ir.weibo.com. The conference call can be accessed as follows:

US Toll Free:  +1 866-519-4004
Hong Kong Toll Free:  800-906-601
China Toll Free:  400-620-8038
International:  +65 6713-5090
Passcode for all regions:  17722600

A replay of the conference call will be available through midnight, Eastern Time on November 28, 2016. The dial-in number is +61 2-8199-0299. The passcode for the replay is 17722600.

About Weibo Corporation

Weibo is a leading social media for people to create, share and discover Chinese-language content. Weibo combines the means of public self-expression in real time with a powerful platform for social interaction, as well as content aggregation and distribution. Any user can create and post a feed of up to 140 Chinese characters and attach multi-media or long-form content. User relationships on Weibo may be asymmetric; any user can follow any other user and add comments to a feed while reposting. This simple, asymmetric and distributed nature of Weibo allows an original feed to become a live viral conversation stream.

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

Safe Harbor Statement

This press release contains forward-looking statements that relate to, among other things, Weibo's expected financial performance and strategic and operational plans (as described, without limitation, in the "Business Outlook" section and in quotations from management in this press release. Weibo may also make forward-looking statements in the Company's periodic reports to the U.S. Securities and Exchange Commission ("SEC"), in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. These forward-looking statements can be identified by terminology, such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "confidence," "estimates" and similar statements. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Potential risks and uncertainties include, but are not limited to, Weibo's limited operating history in certain new businesses; failure to grow active user base and the level of user engagement; the uncertain regulatory landscape in China; fluctuations in the Company's quarterly operating results; the Company's reliance on advertising and marketing sales for a majority of its revenues; failure to successfully develop, introduce, drive adoption of or monetize new features and products; failure to compete effectively for advertising and marketing spending; failure to develop the small and medium enterprise market by the Company or through cooperation with other parties, including Alibaba; failure to successfully integrate acquired businesses; risks associated with the Company's investments, including equity pick-up and impairment; failure to compete successfully against new entrants and established industry competitors; changes in the macro-economic environment, including the depreciation of the Renminbi; and adverse changes in economic and political policies of the PRC government and its impact on the Chinese economy. Further information regarding these and other risks is included in Weibo's annual report on Form 20-F for the fiscal year ended December 31, 2015 filed with the SEC on April 28, 2016 and other filings with the SEC. All information provided in this press release is current as of the date hereof, and Weibo assumes no obligation to update such information, except as required under applicable law.

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

 

 

WEIBO CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)












Three months ended


Nine months ended


September 30,


June 30,


September 30,


2016


2015


2016


2016


2015

Net revenues:










     Advertising and marketing

$        156,693


$        105,861


$        127,173


$        383,112


$        272,888

     Weibo VAS

20,184


18,873


19,712


59,940


55,978

          Total net revenues

176,877


124,734


146,885


443,052


328,866











Costs and expenses:










     Cost of revenues (a)

44,494


37,241


40,657


121,777


99,855

     Sales and marketing (a)

38,070


30,106


32,166


100,277


89,806

     Product development (a)

39,674


37,493


37,611


114,219


106,830

     General and administrative (a)

11,718


5,996


9,200


29,456


20,660

          Total costs and expenses

133,956


110,836


119,634


365,729


317,151

Income from operations

42,921


13,898


27,251


77,323


11,715











Non-operating income (loss):










    Gain on sale of and impairment on investments, net

(11,087)


(462)


(3,440)


(15,395)


146

    Interest and other income , net

1,911


1,818


2,411


5,742


4,895


(9,176)


1,356


(1,029)


(9,653)


5,041











Income before income tax expenses

33,745


15,254


26,222


67,670


16,756

     Income tax expenses

(1,917)


(1,030)


(1,796)


(4,261)


(1,439)

Net income

31,828


14,224


24,426


63,409


15,317

    Less: Net loss attributable to
    noncontrolling interest

(274)


(253)


(1,431)


(1,648)


(306)











Net income attributable to Weibo

$           32,102


$           14,477


$           25,857


$           65,057


$           15,623





















Basic net income per share attributable to Weibo

$               0.15


$               0.07


$               0.12


$               0.30


$               0.08

Diluted net income per share attributable to Weibo

$               0.14


$               0.07


$               0.12


$               0.29


$               0.07











Shares used in computing basic










   net income per share attributable to Weibo

215,671


209,356


213,537


213,832


207,287

Shares used in computing diluted










   net income per share attributable to Weibo

223,861


217,681


221,611


222,110


217,426











(a) Stock-based compensation in each category:










      Cost of revenues

$                764


$               380


$                543


$             1,815


$                921

      Sales and marketing

1,784


924


900


3,702


2,353

      Product development

5,304


3,028


2,501


11,360


7,737

      General and administrative

3,536


2,917


3,364


10,306


8,778

 

 

WEIBO CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)





September 30,


December 31,




2016


2015







Assets

Current assets:






Cash and cash equivalents

$             181,841


$             237,440



Short-term investments

297,588


98,439



Accounts receivable, net

116,341


120,230



Prepaid expenses and other current assets

51,970


42,295



      Current assets subtotal

647,740


498,404







Property and equipment, net

19,947


22,850

Goodwill and intangible assets, net

11,986


13,083

Investments

284,481


294,679

Other assets

7,691


10,173

Total assets

$             971,845


$             839,189







Liabilities and Shareholders' Equity

Liabilities:





Current liabilities:






Accounts payable *

$               42,061


$               40,456



Accrued liabilities *

155,446


117,040



Deferred revenues

48,940


39,091



Amount due to SINA

12,434


12,188



     Current liabilities subtotal

258,881


208,775








Long-term liability

1,925


2,385



Total liabilities

260,806


211,160







Shareholders' equity :





Weibo shareholders' equity

706,626


620,672


Non-controlling interest

4,413


7,357



Total shareholders' equity

711,039


628,029







Total liabilities and shareholders' equity

$             971,845


$             839,189







* Commencing on January 1, 2016, in order to enhance comparability with industry peers, payables that have been invoiced or formally agreed with the suppliers were recorded in accounts payable. To conform to current period presentations, the relevant amounts in prior periods have been reclassified from accrued liabilities accordingly. Such reclassification amounted to $37.9 million as of December 31, 2015.

 

WEIBO CORPORATION

UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS

(In thousands, except per share data)




















Three months ended


September 30, 2016


September 30, 2015


June 30, 2016




















Non-GAAP






Non-GAAP






Non-GAAP


Actual


Adjustments


Results


Actual


Adjustments


Results


Actual


Adjustments


Results



















Advertising and marketing

$    156,693




$    156,693


$    105,861




$    105,861


$    127,173




$    127,173

Weibo VAS

20,184




20,184


18,873




18,873


19,712




19,712

    Net revenues

$    176,877




$    176,877


$    124,734




$    124,734


$    146,885




$    146,885






















(11,388)

 (a)





(7,249)

 (a)





(7,308)

 (a)





(160)

 (b)





(364)

 (b)





(161)

 (b)


Total costs and expenses

$    133,956


$    (11,548)


$    122,408


$    110,836


$       (7,613)


$    103,223


$    119,634


$       (7,469)


$    112,165






















11,388

 (a)





7,249

 (a)





7,308

 (a)





160

 (b)





364

 (b)





161

 (b)


Income from operations

$      42,921


$      11,548


$      54,469


$      13,898


$        7,613


$      21,511


$      27,251


$        7,469


$      34,720






















11,388

 (a)





7,249

 (a)





7,308

 (a)





160

 (b)





364

 (b)





161

 (b)





11,087

 (c)





462

 (c)





3,440

 (c)





(101)

 (d)





(323)

 (d)





(1,177)

 (d)





(40)

 (e)





(91)

 (e)





(40)

 (e)


Net income attributable to Weibo

$      32,102


$      22,494


$      54,596


$      14,477


$        7,661


$      22,138


$      25,857


$        9,692


$      35,549



















Diluted net income per share
    attributable to Weibo

$           0.14




$           0.24


$           0.07




$           0.10


$           0.12




$           0.16



















Shares used in computing  diluted


















    net income per share attributable to Weibo

223,861




223,861


217,681




217,681


221,611




221,611



















Adjusted EBITDA:




































   Non-GAAP net income





$      54,596






$      22,138






$      35,549

          Interest income, net





(2,201)






(1,433)






(1,893)

          Income tax expenses





1,957






1,121






1,836

          Depreciation expenses





3,312






4,696






3,316

    Adjusted EBITDA





$      57,664






$      26,522






$      38,808









































































WEIBO CORPORATION

UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS

(In thousands, except per share data)




















Nine months ended








September 30, 2016


September 30, 2015












Non-GAAP






Non-GAAP








Actual


Adjustments


Results


Actual


Adjustments


Results

























Advertising and marketing

$    383,112




$    383,112


$    272,888




$    272,888







Weibo VAS

59,940




59,940


55,978




55,978







    Net revenues

$    443,052




$    443,052


$    328,866




$    328,866




























(27,183)

 (a)





(19,789)

 (a)











(562)

 (b)





(1,108)

 (b)








Total costs and expenses

$    365,729


$    (27,745)


$    337,984


$    317,151


$    (20,897)


$    296,254




























27,183

 (a)





19,789

 (a)











562

 (b)





1,108

 (b)








Income from operations

$      77,323


$      27,745


$    105,068


$      11,715


$      20,897


$      32,612




























27,183

 (a)





19,789

 (a)











562

 (b)





1,108

 (b)











15,395

 (c)





(146)

 (c)











(1,558)

 (d)





(253)

 (d)











(140)

 (e)





(276)

 (e)








Net income attributable to Weibo

$      65,057


$      41,442


$    106,499


$      15,623


$      20,222


$      35,845

























Diluted net income per share
    attributable to Weibo

$           0.29




$           0.48


$           0.07




$           0.16

























Shares used in computing  diluted


















    net income per share attributable to Weibo

222,110




222,110


217,426




217,426

























Adjusted EBITDA:




































    Non-GAAP net income





$    106,499






$      35,845







          Interest income, net





(5,394)






(4,376)







          Income tax expenses





4,401






1,716







          Depreciation expenses





9,928






15,476







    Adjusted EBITDA





$    115,434






$      48,661

























(a)  To adjust stock-based compensation.

(b)  To adjust amortization of intangible assets.

(c)  To adjust net gain on the sale of investments and impairment on investments, and dividend income.

(d)  To adjust loss attributable to non-controlling interests.

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

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

       For impairment on investments, full valuation allowances were made due to as the Company does not expect they can be realized in the foreseeable future.

 

 

WEIBO CORPORATION

UNAUDITED ADDITIONAL INFORMATION

(In thousands)












Three months ended


Nine months ended


September 30,


June 30,


September 30,


2016


2015


2016


2016


2015











Net revenues










Advertising and marketing










     Key accounts and small & medium-sized enterprises

$      147,437


$        73,331


$        114,324


$      349,887


$      177,442

     Alibaba

9,256


32,530


12,849


33,225


95,446

         Subtotal

156,693


105,861


127,173


383,112


272,888











Weibo VAS

20,184


18,873


19,712


59,940


55,978


$      176,877


$      124,734


$        146,885


$      443,052


$      328,866

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/weibo-reports-third-quarter-2016-financial-results-300366709.html

SOURCE Weibo Corporation

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