Weibo Reports First Quarter 2020 Unaudited Financial Results

BEIJING, May 19, 2020 /PRNewswire/ -- Weibo Corporation ("Weibo" or the "Company") (NASDAQ: WB), a leading social media in China, today announced its unaudited financial results for the first quarter ended March 31, 2020.

"We are satisfied with our first quarter result amid the coronavirus pandemic," said Gaofei Wang, CEO of Weibo. "In this challenging period, Weibo has further demonstrated its indispensable value as a leading social media platform to keep the public informed, connected and engaged. In March, we delivered our strongest user growth in terms of net additions of MAUs and DAUs on a year-over-year basis. On monetization, we have seen a gradual recovery trend since March for most brands and merchants from the trough in February, although there are still uncertainties brought forth by the pandemic. We will continue to focus on optimizing ad products and enhancing ad performance for advertisers to further tap into advertisers' social ad wallet and improve our monetization efficiency," said Mr. Wang.

First Quarter 2020 Highlights

• Net revenues were $323.4 million, a decrease of 19% year-over-year or 15% year-over-year on a constant currency basis [1].
• Advertising and marketing revenues were $275.4 million, a decrease of 19% year-over-year.
• Value-added service ("VAS") revenues were $48.0 million, a decrease of 17% year-over-year.
• Net income attributable to Weibo was $52.1 million and diluted net income per share was $0.23.
• Non-GAAP net income attributable to Weibo was $67.4 million and non-GAAP diluted net income per share was $0.30.
• Monthly active users ("MAUs") were 550 million in March 2020, a net addition of approximately 85 million users on year over year basis. Mobile MAUs represented approximately 94% of MAUs.
• Average daily active users ("DAUs") were 241 million in March 2020, a net addition of approximately 38 million users on year over year basis.

First Quarter 2020 Financial Results

For the first quarter of 2020, Weibo's total net revenues were $323.4 million, a decrease of 19% compared to $399.2 million for the same period last year.

Advertising and marketing revenues for the first quarter of 2020 were $275.4 million, a decrease of 19% compared to $341.1 million for the same period last year. Advertising and marketing revenues from key accounts ("KAs") and small & medium-sized enterprises ("SMEs") were $247.9 million, a decrease of 24% compared to $324.5 million for the same period last year. The decrease was primarily resulted from the adverse impact of the coronavirus pandemic on the overall advertising demand, decrease in barter transaction revenues as well as negative currency translation impact.

VAS revenues for the first quarter of 2020 were $48.0 million, a decrease of 17% year-over-year compared to $58.0 million for the same period last year, primarily due to the decrease of revenues from live streaming business and was partially offset by the increase of membership revenues.

Costs and expenses for the first quarter of 2020 totaled $265.4 million, compared to $276.1 million for the same period last year. Non-GAAP costs and expenses were $249.3 million, compared to $262.4 million for the same period last year.

Income from operations for the first quarter of 2020 was $58.0 million, compared to $123.1 million for the same period last year. Non-GAAP income from operations was $74.1 million, compared to $136.8 million for the same period last year.

Non-operating income for the first quarter of 2020 was $10.0 million, compared to $48.6 million for the same period last year. Non-operating income for the first quarter of 2020 mainly included (i) a $12.9 million net interest and other income; (ii) a $2.9 million net loss on sale of investments and fair value changes on investments, which is excluded under non-GAAP measures.

Income tax expenses were $15.9 million, compared to $21.1 million for the same period last year. The decrease was primarily resulted from reduced earnings, and was partially offset by the estimated increase of effective tax rate for China operations primarily due to the expiration of the preferential tax treatment of one of the Company's PRC subsidiaries in 2020.

Net income attributable to Weibo for the first quarter of 2020 was $52.1 million, compared to $150.4 million for the same period last year. Diluted net income per share attributable to Weibo for the first quarter of 2020 was $0.23, compared to $0.66 for the same period last year. Non-GAAP net income attributable to Weibo for the first quarter of 2020 was $67.4 million, compared to $128.5 million for the same period last year. Non-GAAP diluted net income per share attributable to Weibo for the first quarter of 2020 was $0.30, compared to $0.56 for the same period last year.

As of March 31, 2020, Weibo's cash, cash equivalents and short-term investments totaled $2.35 billion. For the first quarter of 2020, cash provided by operating activities was $63.6 million, capital expenditures totaled $7.3 million, and depreciation and amortization expenses amounted to $6.8 million.

Business Outlook

For the second quarter of 2020, Weibo estimates its net revenues to decrease by 7% to 12% 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 7:00 AM – 8:00 AM Eastern Time on May 19, 2020 (or 7:00 PM – 8:00 PM Beijing Time on May 19, 2020) to present an overview of the Company's financial performance and business operations.

Please register in advance of the conference call using the link provided below. Upon registering, you will be provided with a calendar invite with participant dial-in numbers, passcode, and a unique access pin by email.

PRE-REGISTER LINK: https://s1.c-conf.com/DiamondPass/10006805-invite.html

To join the conference, simply dial the number in the calendar invite you receive after preregistering, enter the passcode followed by your pin, and you will join the conference instantly. Additionally, a live webcast of the call will be available through the Company's corporate website at http://ir.weibo.com.

A telephone replay will be available 1 hour after the end of the conference and may be accessed at the following number until May 27, 2020:

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 and fair value change of investments (other non-GAAP to GAAP reconciling items have no tax effect), and amortization of convertible debt and senior notes issuance cost. Adjusted EBITDA represents non-GAAP net income attributable to Weibo, excluding 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

View original content:http://www.prnewswire.com/news-releases/weibo-reports-first-quarter-2020-unaudited-financial-results-301061579.html

SOURCE Weibo Corporation