Weibo Reports Second Quarter 2019 Unaudited Financial Results

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

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

Second Quarter 2019 Highlights

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

 

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

Second Quarter 2019 Financial Results

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

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

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

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

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

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

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

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

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

Other Development

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

Business Outlook

For the third quarter of 2019, Weibo estimates its net revenues to increase 6% year-over-year to 9% year over year on a constant currency basis. This forecast reflects Weibo's current and preliminary view, which is subject to change.

Conference Call

Weibo's management team will host a conference call from 7AM8AM Eastern Time on August 19, 2019 (or 7PM8PM Beijing Time on August 19, 2019) to present an overview of the Company's financial performance and business operations. A live webcast of the call will be available through the Company's corporate website at http://ir.weibo.com.

The conference call can be accessed as follows:

US Toll Free: 

+1 866-519-4004

Hong Kong Toll Free: 

800-906-601

China: 

400-620-8038

International: 

+65 6713-5090

Passcode for all regions:

7349347

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

Non-GAAP Financial Measures

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

The Company's non-GAAP financial measures exclude stock-based compensation, amortization of intangible assets, net results of impairment on, gain/loss on sale of and fair value change of investments, non-GAAP to GAAP reconciling items on the share of equity method investments, non-GAAP to GAAP reconciling items for the income/loss attributable to non-controlling interests, provision for income tax related to the amortization of intangible assets (other non-GAAP to GAAP reconciling items have no tax effect), and amortization of convertible debt issuance cost. Adjusted EBITDA excludes interest income, net, income tax expenses, and depreciation expenses.

The Company's management uses these non-GAAP financial measures in their financial and operating decision-making, because management believes these measures reflect the Company's ongoing operating performance in a manner that allows more meaningful period-to-period comparisons. The Company believes that these non-GAAP financial measures provide useful information to investors and others in the following ways: (i) in comparing the Company's current financial results with the Company's past financial results in a consistent manner, and (ii) in understanding and evaluating the Company's current operating performance and future prospects in the same manner as management does, if they so choose. The Company also believes that the non-GAAP financial measures provide useful information to both management and investors by excluding certain expenses, gains (losses) and other items (i) that are not expected to result in future cash payments or (ii) that are non-recurring in nature or may not be indicative of the Company's core operating results and business outlook.

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

About Weibo

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

Weibo enables its advertising and marketing customers to promote their brands, products and services to users. Weibo offers a wide range of advertising and marketing solutions to companies of all sizes. The Company generates a substantial majority of its revenues from the sale of advertising and marketing services, including the sale of social display advertisement and promoted marketing offerings. Designed with a "mobile first" philosophy, Weibo displays content in a simple information feed format and offers native advertisement that conform to the information feed on our platform. To support the mobile format, we have developed and continuously refining our social interest graph recommendation engine, which enables our customers to perform people marketing and target audiences based on user demographics, social relationships, interests and behaviors, to achieve greater relevance, engagement and marketing effectiveness.

Safe Harbor Statement

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

Contact:

Investor Relations

Weibo Corporation

Phone: +86 10 5898-3336

Email: ir@staff.weibo.com

 

 

WEIBO CORPORATION

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)























































Three months ended



Six months ended







June 30,



March 31,



June 30,







2019



2018



2019



2019



2018

























Net revenues:





















     Advertising and marketing



$             370,660



$             369,942



$             341,141



$             711,801



$             672,891

     Value-added service



61,176



56,647



58,036



119,212



103,581



Net revenues



431,836



426,589



399,177



831,013



776,472

























Costs and expenses:





















     Cost of revenues (1)



81,972



61,790



82,817



164,789



124,692

     Sales and marketing (1)



106,405



139,977



106,151



212,556



245,840

     Product development(1)



70,368



60,613



69,853



140,221



121,136

     General and administrative(1)



21,825



9,313



17,287



39,112



20,529



Total costs and expenses



280,570



271,693



276,108



556,678



512,197

Income from operations



151,266



154,896



123,069



274,335



264,275

























Non-operating income (loss):













































    Impairment on, gain/loss on sale of and

        fair value change of investments, net 



(41,954)



(1,535)



37,797



(4,157)



(3,034)

    Interest and other income , net



17,999



12,481



10,781



28,780



21,609







(23,955)



10,946



48,578



24,623



18,575

























Income before income tax expenses



127,311



165,842



171,647



298,958



282,850

     Income tax expenses



(26,073)



(25,148)



(21,073)



(47,146)



(43,445)

























Net income



101,238



140,694



150,574



251,812



239,405

























    Less: Net income (loss) attributable to

    non-controlling interests

(1,758)



(220)



132



(1,626)



(594)

























Net income attributable to Weibo

$             102,996



$             140,914



$             150,442



$             253,438



$             239,999

















































Basic net income per share attributable to Weibo

$                    0.46



$                    0.63



$                    0.67



$                    1.13



$                    1.08

Diluted net income per share attributable to Weibo

$                    0.46



$                    0.62



$                    0.66



$                    1.12



$                    1.06

























Shares used in computing basic





















   net income per share attributable to Weibo

225,262



223,542



224,924



225,094



223,224

Shares used in computing diluted





















   net income per share attributable to Weibo

226,277



232,768



232,894



226,210



225,995

















































(1) Stock-based compensation in each category:























Cost of revenues



$                 1,118



$                 1,445



$                 1,112



$                 2,230



$                 2,456



Sales and marketing



2,129



2,831



2,039



4,168



4,799



Product development



6,618



6,064



6,058



12,676



11,115



General and administrative



4,269



1,908



3,686



7,955



4,892

 

 

WEIBO CORPORATION



UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS



(In thousands)































June 30,



December 31,













2019



2018





















Assets





Current assets:

















Cash and cash equivalents



$                        961,340



$                     1,234,596









Short-term investments



598,466



591,269









Accounts receivable, net



465,635



369,093









Prepaid expenses and other current assets



285,937



168,821









Amount due from SINA(1)



328,692



105,319









      Current assets subtotal



2,640,070



2,469,098























Property and equipment, net



43,672



45,623





Goodwill and intangible assets, net



48,851



50,449





Long-term investments



907,181



694,586





Other assets(2)



28,362



14,926





Total assets



$                     3,668,136



$                     3,274,682





















Liabilities and Shareholders' Equity 





Liabilities:

















Current liabilities:

















Accounts payable



$                        133,251



$                        123,730









Accrued expenses and other current liabilities(2)



412,979



317,437









Deferred revenues



121,438



99,994









Income tax payable



69,418



88,683









     Current liabilities subtotal



737,086



629,844

























Long-term liabilities:

















Convertible debt



886,195



884,123









Other long-term liabilities(2)



20,672



12,577









     Total liabilities



1,643,953



1,526,544























Shareholders' equity :















Weibo shareholders' equity 



2,025,404



1,745,459







Non-controlling interests



(1,221)



2,679









Total shareholders' equity 



2,024,183



1,748,138























Total liabilities and shareholders' equity 



$                     3,668,136



$                     3,274,682























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





















(2) The Company adopted the new leasing guidance (ASU 2016-2) started from January 1, 2019, which requires that a lessee

recognize the assets and liabilities that arise from operating leases. The Company recognized a right-of-use asset and a liability

relating to lease payments (the Lease Liability) in the statements of financial position for lease contracts having terms beyond 12

months period. The adoption of new leasing guidance resulted in recognition of $13.0 million of right-of-use asset and a total of

$13.7 million of leasing liability as of June 30, 2019.









 

 

WEIBO CORPORATION

UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS

(In thousands, except per share data)





















































Three months ended











June 30, 2019



June 30, 2018



March 31, 2019















































Non-GAAP











Non-GAAP











Non-GAAP











Actual



Adjustments



Results



Actual



Adjustments



Results



Actual



Adjustments



Results















































Advertising and marketing



$          370,660







$          370,660



$       369,942







$       369,942



$       341,141







$       341,141



Value-added service



61,176







61,176



56,647







56,647



58,036







58,036





Net revenues



$          431,836







$          431,836



$       426,589







$       426,589



$       399,177







$       399,177







































































































(14,134)

 (a) 









(12,248)

 (a) 









(12,895)

 (a) 

















(849)

 (b) 









(164)

 (b) 









(860)

 (b) 





Total costs and expenses



$          280,570



$        (14,983)



$          265,587



$       271,693



$        (12,412)



$       259,281



$       276,108



$        (13,755)



$       262,353







































































































14,134

 (a) 









12,248

 (a) 









12,895

 (a) 

















849

 (b) 









164

 (b) 









860

 (b) 





Income from operations



$          151,266



$          14,983



$          166,249



$       154,896



$          12,412



$       167,308



$       123,069



$          13,755



$       136,824







































































































14,134

 (a) 





















12,895

 (a) 

















849

 (b) 









12,248

 (a) 









860

 (b) 

















41,954

 (c) 









164

 (b) 









(37,797)

 (c) 

















(2,820)

 (d) 









1,535

 (c) 









1,249

 (d) 

















(1,588)

 (e) 









277

 (e) 









(45)

 (e) 

















(127)

 (f) 









(41)

 (f) 









(126)

 (f) 

















1,037

 (g) 









1,035

 (g) 









1,035

 (g) 





Net income attributable to Weibo

$          102,996



$          53,439



$          156,435



$       140,914



$          15,218



$       156,132



$       150,442



$        (21,929)



$       128,513















































Diluted net income per share attributable to Weibo

$                 0.46







$                 0.68

*

$              0.62

*





$              0.68

*

$              0.66

*





$              0.56

*













































Shares used in computing  diluted







































    net income per share attributable to Weibo

226,277



6,754

 (h) 

233,031



232,768







232,768



232,894







232,894















































Adjusted EBITDA:





















































































Non-GAAP net income attributable to Weibo









$          156,435











$       156,132











$       128,513







Interest income,net











(15,648)











(12,604)











(14,208)







Income tax expenses











26,200











25,189











21,199







Depreciation expenses











5,891











4,626











5,305





Adjusted EBITDA











$          172,878











$       173,343











$       140,809



 

 

WEIBO CORPORATION

UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS

(In thousands, except per share data)





















































Six months ended























June 30, 2019



June 30, 2018































Non-GAAP











Non-GAAP























Actual



Adjustments



Results



Actual



Adjustments



Results



























































Advertising and marketing



$          711,801







$          711,801



$       672,891







$       672,891















Value-added service



119,212







119,212



103,581







103,581

















Net revenues



$          831,013







$          831,013



$       776,472







$       776,472



















































































































(27,029)

 (a) 









(23,262)

 (a) 





























(1,709)

 (b) 









(333)

 (b) 

















Total costs and expenses



$          556,678



$        (28,738)



$          527,940



$       512,197



$        (23,595)



$       488,602































































































































































27,029

 (a) 









23,262

 (a) 





























1,709

 (b) 









333

 (b) 

















Income from operations



$          274,335



$          28,738



$          303,073



$       264,275



$          23,595



$       287,870











































































































































































































27,029

 (a) 









































1,709

 (b) 









23,262

 (a) 





























4,157

 (c) 









333

 (b) 





























(1,571)

 (d) 









3,034

 (c) 





























(1,633)

 (e) 









159

 (e) 





























(253)

 (f) 









(83)

 (f) 





























2,072

 (g) 









2,070

 (g) 

















Net income attributable to Weibo

$          253,438



$          31,510



$          284,948



$       239,999



$          28,775



$       268,774



























































Diluted net income per share attributable to Weibo

$                 1.12







$                 1.25

*

$              1.06







$              1.18

*

























































Shares used in computing  diluted







































    net income per share attributable to Weibo

226,210



6,753

 (h) 

232,963



225,995



6,753

 (h) 

232,748



























































Adjusted EBITDA:





















































































Non-GAAP net income attributable to Weibo









$          284,948











$       268,774



















Interest income, net











(29,856)











(23,513)



















Income tax expenses











47,399











43,528



















Depreciation expenses











11,196











9,147

















Adjusted EBITDA











$          313,687











$       297,936







































































































(a)  To exclude stock-based compensation.







































(b)  To exclude amortization of intangible assets.





































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





























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





























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



























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























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

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

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



































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

























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



























 

 

WEIBO CORPORATION

UNAUDITED ADDITIONAL INFORMATION

(In thousands)





























Three months ended



Six months ended







June 30,



March 31,



June 30,







2019



2018



2019



2019



2018



























Net revenues























Advertising and marketing























     Small & medium-sized enterprises and key accounts

$          346,541



$        338,662



$            324,506



$          671,047



$        615,275





     Alibaba

24,119



31,280



16,635



40,754



57,616





         Subtotal

370,660



369,942



341,141



711,801



672,891





























Value-added service

61,176



56,647



58,036



119,212



103,581







$          431,836



$        426,589



$            399,177



$          831,013



$        776,472



 

 

Cision View original content:http://www.prnewswire.com/news-releases/weibo-reports-second-quarter-2019-unaudited-financial-results-300903386.html

SOURCE Weibo Corporation

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