omniture

Weibo Reports Fourth Quarter and Fiscal Year 2019 Unaudited Financial Results

2020-02-26 18:00 8901

BEIJING, Feb. 26, 2020 /PRNewswire/ -- Weibo Corporation ("Weibo" or the "Company") (NASDAQ: WB), a leading social media in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2019.

"We ended the year 2019 well as our community and business continue to grow," said Gaofei Wang, CEO of Weibo. "Our user base and engagement grew robustly as we remained focused on improving user product and optimizing content consumption experience. On monetization, we are pleased with the solid growth from key accounts sector in 2019, underpinned by robust momentum in user traffic and our differentiated value proposition to brand advertisers. Entering into 2020, we will continue to build our ecosystem to enhance our core competitiveness. We will also focus on driving marketing value for our customers and diversifying monetization opportunities to achieve sustainable growth in future," Mr. Wang concluded.  

Fourth Quarter 2019 Highlights

  • Net revenues were $468.1 million, a decrease of 3% year-over-year or 2% year-over-year on a constant currency basis [1].
  • Advertising and marketing revenues were $405.9 million, a decrease of 3% year-over-year.
  • Value-added service ("VAS") revenues were $62.2 million, a decrease of 4% year-over-year.
  • Net income attributable to Weibo was $95.1 million and diluted net income per share was $0.42.
  • Non-GAAP net income attributable to Weibo was $176.5 million and non-GAAP diluted net income per share was $0.77.
  • Monthly active users ("MAUs") were 516 million in December 2019, a net addition of approximately 54 million users year-over-year. Mobile MAUs represented 94% of MAUs.
  • Average daily active users ("DAUs") were 222 million in December 2019, a net addition of approximately 22 million users year-over-year.

Fiscal Year 2019 Highlights

  • Net revenues were $1.77 billion, an increase of 3% year-over-year or 7% year-over-year on a constant currency basis [2].
  • Advertising and marketing revenues were $1.53 billion, an increase of 2% year-over-year.
  • VAS revenues were $236.7 million, an increase of 8% year-over-year.
  • Net income attributable to Weibo was $494.7 million and diluted net income per share was $2.18.
  • Non-GAAP net income attributable to Weibo was $637.5 million and non-GAAP diluted net income per share was $2.78.

[1] On a constant currency (non-GAAP) basis, we assume that the exchange rate in the fourth quarter of 2019 had been the same as it was in the fourth quarter of 2018, or RMB 6.94=US$1.00.

[2] On a constant currency (non-GAAP) basis, we assume that the exchange rate of 2019 had been the same as 2018, or RMB 6.62=US$1.00.

Fourth Quarter 2019 Financial Results

For the fourth quarter of 2019, Weibo's total net revenues were $468.1 million, a decrease of 3% compared to $481.9 million for the same period last year.

Advertising and marketing revenues for the fourth quarter of 2019 were $405.9 million, a decrease of 3% compared to $417.0 million for the same period last year. Advertising and marketing revenues from key accounts ("KAs") and small & medium-sized enterprises ("SMEs") were $368.1 million, a decrease of 5% compared to $385.5 million for the same period last year.

VAS revenues for the fourth quarter of 2019 were $62.2 million, a decrease of 4% year-over-year compared to $64.9 million for the same period last year.

Costs and expenses for the fourth quarter of 2019 totaled $317.4 million, an increase of 6% compared to $298.8 million for the same period last year. Non-GAAP costs and expenses were $299.2 million, an increase of 1% compared to $295.5 million for the same period last year.

Income from operations for the fourth quarter of 2019 was $150.7 million, compared to $183.0 million for the same period last year. Non-GAAP income from operations was $168.9 million, compared to $186.4 million for the same period last year.

Non-operating loss for the fourth quarter of 2019 was $25.1 million, compared to a loss of $1.9 million for the same period last year. Non-operating loss for the fourth quarter of 2019 mainly included (i) a $176.5 million net gain from fair value change of investments, which is excluded under non-GAAP measures; (ii) a $214.7 million impairment on the Company's investment in Yixia Tech Co., Ltd., which is excluded under non-GAAP measures; (iii) a $13.3 million net interest and other income. 

Income tax expenses were $31.1 million, compared to $14.9 million for the same period last year, largely attributable to the deferred tax charges recognized from the fair value change of investment in the fourth quarter of 2019.

Net income attributable to Weibo for the fourth quarter of 2019 was $95.1 million, compared to $166.5 million for the same period last year. Diluted net income per share attributable to Weibo for the fourth quarter of 2019 was $0.42, compared to $0.73 for the same period last year. Non-GAAP net income attributable to Weibo for the fourth quarter of 2019 was $176.5 million, compared to $183.6 million for the same period last year. Non-GAAP diluted net income per share attributable to Weibo for the fourth quarter of 2019 was $0.77, compared to $0.80 for the same period last year.

As of December 31, 2019, Weibo's cash, cash equivalents and short-term investments totaled $2.40 billion. For the fourth quarter of 2019, cash provided by operating activities was $253.2 million, capital expenditures totaled $6.5 million, and depreciation and amortization expenses amounted to $6.5 million.

Fiscal Year 2019 Financial Results

For fiscal year 2019, Weibo's total net revenues were $1.77 billion, an increase of 3% compared to $1.72 billion in 2018.

Advertising and marketing revenues for 2019 were $1.53 billion, an increase of 2% compared to $1.50 billion in 2018. Advertising and marketing revenues from KAs and SMEs were $1.43 billion, an increase of 4% compared to $1.38 billion for 2018.

VAS revenues for 2019 were $236.7 million, representing an increase of 8% compared to $219.3 million for 2018. The increase was mainly attributable to the revenues derived from the live streaming business acquired in the fourth quarter of 2018.

Costs and expenses for 2019 totaled $1.17 billion, compared to $1.11 billion for 2018. Non-GAAP costs and expenses were $1.10 billion, compared to $1.06 billion for 2018.

Income from operations for 2019 was $597.6 million, compared to $609.3 million for 2018. Non-GAAP income from operations was $662.2 million, at similar level compared to 2018.

Non-operating income for 2019 was $4.8 million, compared to a non-operating income of $59.6 million for 2018. Non-operating income in 2019 mainly included (i) a $207.4 million net gain from fair value change of investments, which is excluded under non-GAAP measures; (ii) a $249.9 million impairment on the Company's certain investments, which is excluded under non-GAAP measures; (iii) a $46.7 million net interest and other income.

Income tax expenses were $109.6 million, compared to $96.2 million for 2018. The increase was primarily attributable to higher deferred tax charges recognized from fair value change of investment in 2019.

Net income attributable to Weibo for 2019 was $494.7 million, compared to $571.8 million for 2018. Diluted net income per share attributable to Weibo for 2019 was $2.18, compared to $2.52 for 2018. Non-GAAP net income attributable to Weibo for 2019 was $637.5 million, compared to $624.2 million for 2018. Non-GAAP diluted net income per share attributable to Weibo for 2019 was $2.78, compared to $2.73 for 2018.

Business Outlook

For the first quarter of 2020, Weibo's business has been significantly impacted by the coronavirus outbreak in China. Due to the high uncertainty of the evolving situation, we have limited visibility on the full quarter revenue impact brought upon by the epidemic. Based on our current best estimate, Weibo anticipates its first quarter of 2020 net revenues to decrease by 15% to 20% 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 6AM7AM Eastern Time on February 26, 2020 (or 7 PM8 PM Beijing Time on February 26, 2020) 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

Mainland China Toll Free:

400-620-8038

International:

+65 6713-5090

Passcode for all regions:

9232549

A replay of the conference call will be available from 22:00 China Standard Time on February 26, 2020 to 20:59 China Standard Time on March 5, 2020. The dial-in number is +61 2-8199-0299. The passcode for the replay is 9232549.

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, goodwill and acquired intangibles impairment, 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 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


Twelve months ended




December 31,


September 30,


December 31,




2019


2018


2019


2019


2018













Net revenues:











     Advertising and marketing


$        405,921


$        417,016


$        412,489


$     1,530,211


$     1,499,180

     Value-added service


62,227


64,859


55,264


236,703


219,338


Net revenues


468,148


481,875


467,753


1,766,914


1,718,518













Costs and expenses:











     Cost of revenues (1)


90,566


82,940


73,471


328,826


277,648

     Sales and marketing (1)


123,372


140,525


129,411


465,339


527,424

     Product development(1)


75,187


62,515


69,036


284,444


249,873

     General and administrative(1)


28,286


12,865


23,323


90,721


43,755

     Goodwill and acquired intangibles impairment


-


-


-


-


10,554


Total costs and expenses


317,411


298,845


295,241


1,169,330


1,109,254

Income from operations


150,737


183,030


172,512


597,584


609,264













Non-operating income (loss):











    Impairment on, gain/loss on sale of and
        fair value change of investments, net 


(38,372)


(12,936)


644


(41,885)


15,713

    Interest and other income , net


13,253


11,038


4,665


46,698


43,865




(25,119)


(1,898)


5,309


4,813


59,578













Income before income tax expenses


125,618


181,132


177,821


602,397


668,842

     Income tax expenses


(31,056)


(14,895)


(31,362)


(109,564)


(96,222)













Net income


94,562


166,237


146,459


492,833


572,620

    Less: Net income (loss) attributable to
    non-controlling interests

(506)


(270)


290


(1,842)


797













Net income attributable to Weibo

$           95,068


$        166,507


$        146,169


$        494,675


$        571,823

























Basic net income per share attributable to Weibo

$               0.42


$               0.74


$               0.65


$               2.19


$               2.56

Diluted net income per share attributable to Weibo

$               0.42


$               0.73


$               0.64


$               2.18


$               2.52













Shares used in computing basic











   net income per share attributable to Weibo

226,000


224,479


225,610


225,452


223,751

Shares used in computing diluted











   net income per share attributable to Weibo

226,844


232,558


233,126


226,412


232,683

























(1) Stock-based compensation in each category:












Cost of revenues


$             1,488


$               (618)


$             1,533


$             5,251


$             3,522


Sales and marketing


2,761


(1,205)


2,899


9,828


6,837


Product development


8,124


2,243


7,828


28,628


21,187


General and administrative


4,990


1,975


4,637


17,582


9,465

 

 

WEIBO CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)














December 31,


December 31,






2019


2018









Assets


Current assets:








Cash and cash equivalents


$               1,452,985


$               1,234,596




Short-term investments


951,235


591,269




Accounts receivable, net


422,225


369,093




Prepaid expenses and other current assets


424,905


168,821




Amount due from SINA(1)


384,828


105,319




      Current assets subtotal


3,636,178


2,469,098










Property and equipment, net


46,729


45,623


Goodwill and intangible assets, net


46,513


50,449


Long-term investments


1,027,459


694,586


Other assets(2)


47,307


14,926


Total assets


$               4,804,186


$               3,274,682









Liabilities and Shareholders' Equity 


Liabilities:







Current liabilities:








Accounts payable


$                  126,247


$                  123,730




Accrued expenses and other current liabilities(2)

465,580


317,437




Deferred revenues


108,783


99,994




Income tax payable


100,245


88,683




     Current liabilities subtotal


800,855


629,844











Long-term liabilities:








Convertible debt


888,266


884,123




Senior notes


793,985


-




Other long-term liabilities(2)


39,261


12,577




     Total liabilities


2,522,367


1,526,544










Shareholders' equity :







Weibo shareholders' equity 


2,283,267


1,745,459



Non-controlling interests


(1,448)


2,679




Total shareholders' equity 


2,281,819


1,748,138










Total liabilities and shareholders' equity 


$               4,804,186


$               3,274,682










(1) Included short-term loans to SINA of $236.6 million as of  December 31, 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
$9.7 million of right-of-use asset and a total of $10.0 million of leasing liability as of December 31, 2019.

 

WEIBO CORPORATION


UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS


(In thousands, except per share data)




























Three months ended






December 31, 2019


December 31, 2018


September 30, 2019
























Non-GAAP






Non-GAAP






Non-GAAP






Actual


Adjustments


Results


Actual


Adjustments


Results


Actual


Adjustments


Results
























Advertising and marketing


$      405,921




$      405,921


$      417,016




$      417,016


$    412,489




$    412,489


Value-added service


62,227




62,227


64,859




64,859


55,264




55,264



Net revenues


$      468,148




$      468,148


$      481,875




$      481,875


$    467,753




$    467,753




















































(17,363)

 (a) 





(2,395)

 (a) 





(16,897)

 (a) 









(821)

 (b) 





(925)

 (b) 





(825)

 (b) 



Total costs and expenses


$      317,411


$    (18,184)


$      299,227


$      298,845


$       (3,320)


$      295,525


$    295,241


$    (17,722)


$    277,519




















































17,363

 (a) 





2,395

 (a) 





16,897

 (a) 









821

 (b) 





925

 (b) 





825

 (b) 



Income from operations


$      150,737


$      18,184


$      168,921


$      183,030


$        3,320


$      186,350


$    172,512


$      17,722


$    190,234




















































17,363

 (a) 











16,897

 (a) 









821

 (b) 





2,395

 (a) 





825

 (b) 









38,372

 (d) 





925

 (b) 





(644)

 (d) 









2,118

 (e) 





12,936

 (d) 





11,596

 (e) 









6

 (f) 





(64)

 (f) 





(21)

 (f) 









21,354

 (g) 





(145)

 (g) 





(122)

 (g) 









1,371

 (h) 





1,035

 (h) 





1,360

 (h) 



Net income attributable to Weibo

$        95,068


$      81,405


$      176,473


$      166,507


$      17,082


$      183,589


$    146,169


$      29,891


$    176,060
























Diluted net income per share attributable to Weibo

$             0.42




$             0.77

*

$             0.73

*



$             0.80

*

$           0.64

*



$           0.77

*























Shares used in computing  diluted




















    net income per share attributable to Weibo

226,844


6,753

(i)

233,597


232,558




232,558


233,126




233,126
























Adjusted EBITDA:











































Non-GAAP net income attributable to Weibo





$      176,473






$      183,589






$    176,060




Interest income,net






(13,652)






(11,476)






(16,785)




Income tax expenses






9,702






15,040






31,484




Depreciation expenses






5,719






4,915






5,503



Adjusted EBITDA






$      178,242






$      192,068






$    196,262


























































































WEIBO CORPORATION


UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS


(In thousands, except per share data)




























Twelve months ended












December 31, 2019


December 31, 2018
















Non-GAAP






Non-GAAP












Actual


Adjustments


Results


Actual


Adjustments


Results






























Advertising and marketing


$  1,530,211




$  1,530,211


$  1,499,180




$  1,499,180








Value-added service


236,703




236,703


219,338




219,338









Net revenues


$  1,766,914




$  1,766,914


$  1,718,518




$  1,718,518










































(41,011)

 (a) 















(61,289)

 (a) 





(1,348)

 (b) 















(3,355)

 (b) 





(10,554)

 (c) 









Total costs and expenses


$  1,169,330


$    (64,644)


$  1,104,686


$  1,109,254


$    (52,913)


$  1,056,341
































































41,011

 (a) 















61,289

 (a) 





1,348

 (b) 















3,355

 (b) 





10,554

 (c) 









Income from operations


$      597,584


$      64,644


$      662,228


$      609,264


$      52,913


$      662,177




























































































































61,289

 (a) 





41,011

 (a) 















3,355

 (b) 





1,348

 (b) 















41,885

 (d) 





10,554

 (c) 















12,143

 (e) 





(15,713)

 (d) 















(1,648)

 (f) 





1,655

 (f) 















20,979

 (g) 





9,354

 (g) 















4,803

 (h) 





4,140

 (h) 









Net income attributable to Weibo

$      494,675


$    142,806


$      637,481


$      571,823


$      52,349


$      624,172






























Diluted net income per share attributable to Weibo

$             2.18




$             2.78

*

$             2.52

*



$             2.73

*





























Shares used in computing  diluted




















    net income per share attributable to Weibo

226,412


6,753

 (i) 

233,165


232,683




232,683






























Adjusted EBITDA:











































Non-GAAP net income attributable to Weibo





$      637,481






$      624,172










Interest income, net






(60,293)






(46,722)










Income tax expenses






88,585






86,868










Depreciation expenses






22,418






18,499









Adjusted EBITDA






$      688,191






$      682,817






























(a)  To exclude stock-based compensation.

(b)  To exclude amortization of intangible assets.

(c)  To exclude goodwill and acquired intangibles impairment.

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

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

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

(g) To exclude the provision for income tax related to item (b) and (d). 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.


(h) To exclude the amortization of convertible debt and senior notes issuance cost. 

(i) 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


Twelve months ended



December 31,


September 30,


December 31,



2019


2018


2019


2019


2018












Net revenues











Advertising and marketing











      Key accounts and small & medium-sized enterprises

$      368,061


$     385,464


$        393,331


$  1,432,439


$ 1,381,484


     Alibaba

37,860


31,552


19,158


97,772


117,696


         Subtotal

405,921


417,016


412,489


1,530,211


1,499,180













Value-added service

62,227


64,859


55,264


236,703


219,338



$      468,148


$     481,875


$        467,753


$  1,766,914


$ 1,718,518

 

Cision View original content:http://www.prnewswire.com/news-releases/weibo-reports-fourth-quarter-and-fiscal-year-2019-unaudited-financial-results-301011527.html

Source: Weibo Corporation
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