Weibo Announces Third Quarter 2024 Unaudited Financial Results

BEIJING, Nov. 19, 2024 /PRNewswire/ -- Weibo Corporation ("Weibo" or the "Company") (Nasdaq: WB and HKEX: 9898), a leading social media in China, today announced its unaudited financial results for the third quarter ended September 30, 2024.

"We had a solid quarter," said Gaofei Wang, CEO of Weibo. "On the user front, we continued to focus on the acquisition and engagement of high quality users. On the monetization front, our advertising business has exhibited a stabilized trend this quarter. We are pleased to see robust growth of ad revenues from certain key sectors, mainly driven by ad demand during the Summer Olympics. Our value-added services business also delivered strong momentum this quarter, benefiting from the upgrade of membership services catering to users' social interactions on the platform."

Third Quarter 2024 Highlights

Net revenues were US$464.5 million, an increase of 5% year-over-year or an increase of 3% year-over-year on a constant currency basis ^[1].
Advertising and marketing revenues were US$398.6 million, an increase of 2% year-over-year or flat year-over-year on a constant currency basis ^[1].
Value-added services ("VAS") revenues were US$65.9 million, an increase of 25% year-over-year or an increase of 23% year-over-year on a constant currency basis ^[1].
Income from operations was US$141.3 million, representing an operating margin of 30%.
Net income attributable to Weibo's shareholders was US$130.6 million and diluted net income per share was US$0.50.
Non-GAAP income from operations was US$164.5 million, representing a non-GAAP operating margin of 35%.
Non-GAAP net income attributable to Weibo's shareholders was US$139.2 million and non-GAAP diluted net income per share was US$0.53.
Monthly active users ("MAUs") were 587 million in September 2024.
Average daily active users ("DAUs") were 257 million in September 2024.

^[1] We define constant currency (non-GAAP) by assuming that the average exchange rate in the third quarter of 2024 had been the same as it was in the third quarter of 2023, or RMB7.23=US$1.00.

Third Quarter 2024 Financial Results

For the third quarter of 2024, Weibo's total net revenues were US$464.5 million, an increase of 5% compared to US$442.2 million for the same period last year.

Advertising and marketing revenues for the third quarter of 2024 were US$398.6 million, an increase of 2% compared to US$389.3 million for the same period last year. Advertising and marketing revenues excluding advertising revenues from Alibaba were US$377.1 million, an increase of 3% compared to US$367.6 million for the same period last year.

VAS revenues for the third quarter of 2024 were US$65.9 million, an increase of 25% year-over-year compared to US$52.9 million for the same period last year, primarily driven by the growth of membership services and game-related revenues.

Costs and expenses for the third quarter of 2024 totaled US$323.2 million, an increase of 5% compared to US$308.2 million for the same period last year. The increase was mainly resulted from higher marketing spend and personnel related expenses.

Income from operations for the third quarter of 2024 was US$141.3 million, compared to US$134.0 million for the same period last year. Operating margin was 30%, same as last year. Non-GAAP income from operations was US$164.5 million, compared to US$163.9 million for the same period last year. Non-GAAP operating margin was 35%, compared to 37% last year.

Non-operating income for the third quarter of 2024 was US$23.6 million, compared to non-operating loss of US$28.4 million for the same period last year. Non-operating income for the third quarter of 2024 mainly included (i) gain from fair value change of investments of US$16.8 million, which was excluded under non-GAAP measures; and (ii) net interest and other income of US$6.7 million.

Income tax expenses for the third quarter of 2024 were US$32.2 million, compared to US$25.4 million for the same period last year. The increase was primarily due to withholding tax accrued related to earnings to be remitted to Weibo Hong Kong Limited from its wholly-owned subsidiary in China.

Net income attributable to Weibo's shareholders for the third quarter of 2024 was US$130.6 million, compared to US$77.5 million for the same period last year. Diluted net income per share attributable to Weibo's shareholders for the third quarter of 2024 was US$0.50, compared to US$0.32 for the same period last year. Non-GAAP net income attributable to Weibo's shareholders for the third quarter of 2024 was US$139.2 million, compared to US$136.6 million for the same period last year. Non-GAAP diluted net income per share attributable to Weibo's shareholders for the third quarter of 2024 was US$0.53, compared to US$0.57 for the same period last year.

As of September 30, 2024, Weibo's cash, cash equivalents and short-term investments totaled US$2.2 billion. For the third quarter of 2024, cash provided by operating activities was US$124.2 million, capital expenditures totaled US$11.8 million, and depreciation and amortization expenses amounted to US$14.4 million.

Conference Call

Weibo's management team will host a conference call from 6:00 AM to 7:00 AM Eastern Time on November 19, 2024 (or 7:00 PM to 8:00 PM Beijing Time on November 19, 2024) to present an overview of the Company's financial performance and business operations.

Participants who wish to dial in to the teleconference must register through the below public participant link. Dial in and instruction will be in the confirmation email upon registering.

Participants Registration Link:
https://register.vevent.com/register/BI53615081ba80427881ec0a24ad90968c

Additionally, a live and archived webcast of this conference call will be available at http://ir.weibo.com.

Non-GAAP Financial Measures

This release contains the following non-GAAP financial measures: non-GAAP income from operations, non-GAAP net income attributable to Weibo's shareholders, non-GAAP diluted net income per share attributable to Weibo's shareholders 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 resulting from business acquisitions, net results of impairment and provision on investments, gain/loss on sale of investments 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, income tax expense related to the amortization of intangible assets resulting from business acquisitions and fair value change of investments (other non-GAAP to GAAP reconciling items have no tax effect), and amortization of issuance cost of convertible senior notes, unsecured senior notes and long-term loans. Adjusted EBITDA represents non-GAAP net income attributable to Weibo's shareholders before interest income/expense, net, income tax expenses/benefits, 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. 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. Weibo 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. Weibo displays content in a simple information feed format and offers native advertisement that conform to the information feed on our platform. We are 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. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology, such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "confidence," "estimates" and similar statements. Among other things, Weibo's expected financial performance and strategic and operational plans, as described, without limitation, in quotations from management in this press release, contain forward-looking statements. Weibo may also make written or oral forward-looking statements in the Company's periodic reports to the U.S. Securities and Exchange Commission ("SEC"), in announcements, circulars or other publications made on the website of The Stock Exchange of Hong Kong Limited (the "Hong Kong Stock Exchange"), 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. 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 sustain or 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 reports on Form 20-F and other filings with the SEC and the Hong Kong Stock Exchange. 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 of U.S. dollars, except per share data)

Three months ended

Nine months ended

September 30,

June 30,

September 30,

2023

2024

2023

2024

Net revenues:

Advertising and marketing

$ 389,301

$ 375,277

$ 398,615

$ 1,130,275

$ 1,112,843

Value-added services

52,850

62,596

65,865

165,894

185,007

Net revenues

442,151

437,873

464,480

1,296,169

1,297,850

Costs and expenses:

Cost of revenues ⁽¹⁾

93,998

89,790

92,381

274,123

268,992

Sales and marketing ⁽¹⁾

109,776

114,232

123,069

321,695

340,928

Product development ⁽¹⁾

82,764

71,689

80,411

266,385

232,826

General and administrative ⁽¹⁾

21,627

26,777

27,297

80,037

78,660

Total costs and expenses

308,165

302,488

323,158

942,240

921,406

Income from operations

133,986

135,385

141,322

353,929

376,444

Non-operating income (loss):

Investment related income (loss), net

(8,915)

245

16,905

(6,950)

12,180

Interest and other income (loss), net

(19,498)

11,182

6,699

(5,459)

(730)

(28,413)

11,427

23,604

(12,409)

11,450

Income before income tax expenses

105,573

146,812

164,926

341,520

387,894

Less: Income tax expenses

25,407

33,275

32,197

72,709

90,516

Net income

80,166

113,537

132,729

268,811

297,378

Less: Net income attributable to non-controlling interests

474

471

545

1,287

1,564

Accretion to redeemable non-controlling interests

2,203

1,135

1,617

8,156

3,878

Net income attributable to Weibo's shareholders

$ 77,489

$ 111,931

$ 130,567

$ 259,368

$ 291,936

Basic net income per share attributable to Weibo's shareholders

$ 0.33

$ 0.47

$ 0.55

$ 1.10

$ 1.23

Diluted net income per share attributable to Weibo's shareholders

$ 0.32

$ 0.43

$ 0.50

$ 1.09

$ 1.12

Shares used in computing basic net income per share attributable

to Weibo's shareholders

235,842

237,124

237,499

235,307

237,107

Shares used in computing diluted net income per share attributable

to Weibo's shareholders

238,655

265,086

265,824

237,817

264,856

(1) Stock-based compensation in each category:

Cost of revenues

$ 2,308

$ 1,527

$ 1,539

$ 7,082

$ 4,839

Sales and marketing

4,243

3,211

3,454

12,969

10,488

Product development

13,306

8,293

8,593

40,362

27,324

General and administrative

5,834

4,176

4,512

18,970

13,666

WEIBO CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars)

				As of
				December 31,	September 30,
				2023	2024

Assets
	Current assets:
			Cash and cash equivalents	$ 2,584,635	$ 1,203,977
			Short-term investments	641,035	993,618
			Accounts receivable, net	440,768	419,369
			Prepaid expenses and other current assets	359,881	375,455
			Amount due from SINA⁽¹⁾	486,397	465,676
			Current assets subtotal	4,512,716	3,458,095

	Property and equipment, net			220,663	227,609
	Goodwill and intangible assets, net			300,565	288,233
	Long-term investments			1,320,386	1,445,467
	Other non-current assets			926,028	1,205,712
	Total assets			$ 7,280,358	$ 6,625,116

Liabilities, Redeemable Non-controlling Interests and Shareholders' Equity
	Liabilities:
		Current liabilities:
			Accounts payable	$ 161,493	$ 154,440
			Accrued expenses and other current liabilities	666,833	638,826
			Income tax payable	94,507	80,711
			Deferred revenues	75,187	94,690
			Unsecured senior notes	799,325	-
			Current liabilities subtotal	1,797,345	968,667

		Long-term liabilities:
			Convertible senior notes	317,625	320,017
			Unsecured senior notes	743,695	744,420
			Long-term loans	791,647	794,395
			Other long-term liabilities	112,430	119,676
			Total liabilities	3,762,742	2,947,175

	Redeemable non-controlling interests			68,728	42,377

	Shareholders' equity :
		Weibo shareholders' equity		3,398,735	3,583,469
		Non-controlling interests		50,153	52,095
			Total shareholders' equity	3,448,888	3,635,564
	Total liabilities, redeemable non-controlling interests and shareholders' equity			$ 7,280,358	$ 6,625,116


	(1) Included short-term loans to and interest receivable from SINA of US$445.2 million as of December 31, 2023 and US$423.5 million as of September 30, 2024.

WEIBO CORPORATION
UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS
(In thousands of U.S. dollars, except per share data)

			Three months ended								Nine months ended
			September 30,		June 30,			September 30,			September 30,		September 30,
			2023		2024			2024			2023		2024

Income from operations			$	133,986	$	135,385		$	141,322		$	353,929	$	376,444
Add:	Stock-based compensation			25,691		17,207			18,098			79,383		56,317
	Amortization of intangible assets resulting from business acquisitions			4,209		5,011			5,112			12,919		15,182
Non-GAAP income from operations			$	163,886	$	157,603		$	164,532		$	446,231	$	447,943

Net income attributable to Weibo's shareholders			$	77,489	$	111,931		$	130,567		$	259,368	$	291,936
Add:	Stock-based compensation			25,691		17,207			18,098			79,383		56,317
	Amortization of intangible assets resulting from business acquisitions			4,209		5,011			5,112			12,919		15,182
	Investment related gain/loss, net ⁽¹⁾			8,915		(245)			(16,905)			6,950		(12,180)
	Non-GAAP to GAAP reconciling items on the share of equity method investments			19,430		(8,412)			1,975			12,351		18,921
	Non-GAAP to GAAP reconciling items for the income/loss attributable to non-controlling interests			(101)		(435)			(501)			(414)		(1,372)
	Tax effects on non-GAAP adjustments ⁽²⁾			(645)		(1,082)			(1,112)			(1,176)		(3,297)
	Amortization of issuance cost of convertible senior notes, unsecured senior notes and long-term loans			1,607		2,277			1,951			4,819		6,542
Non-GAAP net income attributable to Weibo's shareholders			$	136,595	$	126,252		$	139,185		$	374,200	$	372,049

Non-GAAP diluted net income per share attributable to Weibo's shareholders			$	0.57	$	0.48	*	$	0.53	*	$	1.57	$	1.42	*

Shares used in computing GAAP diluted net income per share attributable to Weibo's shareholders				238,655		265,086			265,824			237,817		264,856
Shares used in computing non-GAAP diluted net income per share attributable to Weibo's shareholders				238,655		265,086			265,824			237,817		264,856

Adjusted EBITDA:
	Net income attributable to Weibo's shareholders		$	77,489	$	111,931		$	130,567		$	259,368	$	291,936
	Non-GAAP adjustments			59,106		14,321			8,618			114,832		80,113
	Non-GAAP net income attributable to Weibo's shareholders			136,595		126,252			139,185			374,200		372,049
		Interest (income) expense, net		2,823		(9,410)			(6,348)			(5,554)		(24,909)
		Income tax expenses		26,052		34,357			33,309			73,886		93,813
		Depreciation expenses		9,354		9,169			8,985			29,917		27,571
	Adjusted EBITDA		$	174,824	$	160,368		$	175,131		$	472,449	$	468,524

Net revenues			$	442,151	$	437,873		$	464,480		$	1,296,169	$	1,297,850

Non-GAAP operating margin				37 %		36 %			35 %			34 %		35 %

(1)	To adjust impairment and provision on investments, gain/loss on sale of investments and fair value change of investments.

(2)	To adjust the income tax effects of non-GAAP adjustments, which primarily related to amortization of intangible assets resulting from business acquisitions and fair value change of investments. Other non-GAAP adjustment items have no tax effect, because (i) they were recorded in entities established in tax free jurisdictions, or (ii) full valuation allowances were provided for related deferred tax assets as it is more-likely-than-not they will not be realized.

*	Net income attributable to Weibo's shareholders is adjusted for interest expense of convertible senior notes for calculating diluted EPS.