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Weibo Reports Third Quarter 2020 Unaudited Financial Results

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BEIJING , Dec, 28, 2020 /PRNewswire/ -- Weibo Corporation ("Weibo" or the "Company") (NASDAQ: WB), a leading social media in China , today announced its unaudited financial results for the third quarter ended September 30, 2020 .

"We are pleased with Weibo's recovery  trend, despite challenges still persisted ," said Gaofei Wang, CEO of Weibo. "Weibo's KA business delivered broad-based recovery, with a record high number of brand customers marketing with us. We are glad to see brands increasingly recognize Weibo's unique value proposition in reaching young audience, leveraging KOL's influence and serving brand plus performance needs. For performance ad business, we continued to drive value for customers, with team's solid execution on advertising system upgrade, ad product optimization and ROI improvement," said Mr. Wang.  

Third Quarter 2020 Highlights

  • Net revenues were $465.7 million , flat year-over-year or a decrease of 4% year-over-year on a constant currency basis [1] .

  • Advertising and marketing revenues were $416.7 million , an increase of 1% year-over-year.

  • Value-added service ("VAS") revenues were $49.1 million , a decrease of 11% year-over-year.

  • Net income attributable to Weibo was $33.8 million and diluted net income per share was $0.15 .

  • Non-GAAP net income attributable to Weibo was $152.9 million and non-GAAP diluted net income per share was $0.66 .

  • Monthly active users ("MAUs") were 511 million in September 2020 , a net addition of approximately 14 million users on year-over-year basis. Mobile MAUs represented approximately 94% of MAUs.

  • Average daily active users ("DAUs") were 224 million in September 2020 , a net addition of approximately 8 million users on year-over-year basis.

 

[1]  On a constant currency (non-GAAP) basis, we assume that the exchange rate in the third quarter of 2020 had been the same as it was in the third quarter of 2019, or RMB 7.02=US$1.00.

Third Quarter 2020 Financial Results

For the third quarter of 2020, Weibo's total net revenues were $465.7 million , compared to $467.8 million for the same period last year.

Advertising and marketing revenues for the third quarter of 2020 were $416.7 million , an increase of 1% compared to $412.5 million for the same period last year. Advertising and marketing revenues from key accounts ("KAs") and small & medium-sized enterprises ("SMEs") were $387.5 million , a decrease of 1% compared to $393.3 million for the same period last year.

VAS revenues for the third quarter of 2020 were $49.1 million , a decrease of 11% year-over-year compared to $55.3 million for the same period last year, which was primarily resulted from the decrease of live streaming revenues, and was partially offset by the increase in membership revenues.

Costs and expenses for the third quarter of 2020 totaled $304.8 million , an increase of 3% compared to $295.2 million for the same period last year. The increase was primarily due to higher bad debt provision and personnel related costs, partially offset by decreased marketing spend. Non-GAAP costs and expenses were $286.4 million , compared to $277.5 million for the same period last year.

Income from operations for the third quarter of 2020 was $161.0 million , compared to $172.5 million for the same period last year. Non-GAAP income from operations was $179.4 million , compared to $190.2 million for the same period last year.

Non-operating loss for the third quarter of 2020 was $97.5 million , compared to an income of $5.3 million for the same period last year. Non-operating loss f or the third quarter of 2020 mainly included (i) a $110.0 million non-deductible impairment charge on equity and loan investments in an investee in e-commerce business, which is excluded under non-GAAP measures; (ii) a $10.1 million net gain from fair value change of investments, which is excluded under non-GAAP measures; and (iii) a $6.3 million net interest and other income.

Income tax expenses were $30.0 million , compared to $31.4 million for the same period last year.

Net income attributable to Weibo for the third quarter of 2020 was $33.8 million , compared to $146.2 million for the same period last year. Diluted net income per share attributable to Weibo for the third quarter of 2020 was $0.15 , compared to $0.64 for the same period last year. Non-GAAP net income attributable to Weibo for the third quarter of 2020 was $152.9 million , compared to $176.1 million for the same period last year. Non-GAAP diluted net income per share attributable to Weibo for the third quarter of 2020 was $0.66 , compared to $0.77 for the same period last year.

As of September 30, 2020 , Weibo's cash, cash equivalents and short-term investments totaled $3.18 billion . For the third quarter of 2020, cash provided by operating activities was $235.2 million , capital expenditures totaled $10.7 million , and depreciation and amortization expenses amounted to $7.7 million .

Business Outlook

For the fourth quarter of 2020, Weibo estimates its net revenues to increase by 1% to 3% year-over-year on a constant currency basis. This forecast includes revenues estimate of an interactive entertainment company which was acquired and consolidated to the Company in November 2020 and represents approximately 2% of our revenues estimate this quarter. 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 6:00 AM to 7:00 AM Eastern Time on December 28, 2020 (or 7:00 PM 8:00 PM Beijing Time on December 28, 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 dial-in numbers, passcode and unique registrant ID by email. To join the conference, please use the conference access information provided in the email received at the point of registering.

PRE-REGISTER LINK : http://apac.directeventreg.com/registration/event/5558304

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 from 22:00 PM China Standard Time on December 28, 2020 to 20:59 PM China Standard Time on January 5 , 2021. To access the recording, please use the following dial-in information listed below:

United States:  

+1 855 452 5696

Hong Kong:

800 963 117

Mainland China: 

400 602 2065

International:

+61 2 8199 0299

Replay PIN: 

5558304

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."

A bout 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


Nine months ended





September 30,


June 30,


September 30,





2020


2019


2020


2020


2019















Net revenues :












     Advertising and marketing


$      416,672


$      412,489


$      340,584


$      1,032,678


$      1,124,290


     Value-added service


49,067


55,264


46,809


143,843


174,476



Net revenues


465,739


467,753


387,393


1,176,521


1,298,766















Costs and expenses :












     Cost of revenues (1)


77,198


73,471


63,584


214,892


238,260


     Sales and marketing (1)


105,263


129,411


112,118


316,483


341,967


     Product development (1)


83,511


69,036


75,961


233,881


209,257


     General and administrative (1)


38,813


23,323


29,545


86,111


62,435



Total costs and expenses


304,785


295,241


281,208


851,367


851,919


Income from operations


160,954


172,512


106,185


325,154


446,847















Non-operating income (loss):

























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


(103,787)


644


117,379


10,654


(3,513)


    Interest and other income , net


6,311


4,665


15,085


34,301


33,445





(97,476)


5,309


132,464


44,955


29,932















Income before income tax expenses


63,478


177,821


238,649


370,109


476,779


     Income tax expenses


(30,003)


(31,362)


(40,744)


(86,630)


(78,508)


Net income


33,475


146,459


197,905


283,479


398,271















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

(323)


290


(511)


(843)


(1,336)


Net income attributable to Weibo

$      33,798


$      146,169


$      198,416


$      284,322


$      399,607




























Basic net income per share attributable to Weibo

$          0.15


$            0.65


$            0.88


$            1.25


$            1.77


Diluted net income per share attributable to Weibo

$          0.15


$            0.64


$            0.86


$            1.25


$            1.76















Shares used in computing basic












   net income per share attributable to Weibo

227,110


225,610


226,678


226,728


225,268


Shares used in computing diluted












   net income per share attributable to Weibo

227,793


233,126


233,983


227,352


233,019




























(1) Stock-based compensation in each category:













Cost of revenues


$         1,407


$         1,533


$         1,155


$         3,909


$         3,763



Sales and marketing


2,623


2,899


2,047


6,886


7,067



Product development


8,438


7,828


7,543


22,890


20,504



General and administrative


5,129


4,637


4,149


14,100


12,592


 

 

 

WEIBO CORPORATION

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)














September 30,


December 31,






2020


2019









Assets



Current assets:








Cash and cash equivalents


$               1,411,929


$               1,452,985




Short-term investments


1,764,535


951,235




Accounts receivable, net


440,495


422,225




Prepaid expenses and other current assets


408,055


424,905




Amount due from SINA (1)


615,928


384,828




      Current assets subtotal


4,640,942


3,636,178










Property and equipment, net


57,052


46,729


Goodwill and intangible assets, net


45,139


46,513


Long-term investments


1,201,593


1,027,459


Other assets


34,057


47,307


Total assets


$               5,978,783


$               4,804,186









Liabilities and Shareholders' Equity 



Liabilities:







Current liabilities:








Accounts payable


$                  114,545


$                  126,247




Accrued expenses and other current liabilities


452,613


465,580




Deferred revenues


153,935


108,783




Income tax payable


110,414


100,245




     Current liabilities subtotal


831,507


800,855











Long-term liabilities:








Convertible debt


891,364


888,266




Senior notes


1,535,537


793,985




Other long-term liabilities


48,040


39,261




     Total liabilities


3,306,448


2,522,367










Shareholders' equity :







Weibo shareholders' equity  


2,673,615


2,283,267



Non-controlling interests


(1,280)


(1,448)




Total shareholders' equity 


2,672,335


2,281,819










Total liabilities and shareholders' equity 


$               5,978,783


$               4,804,186










(1) Included short-term loans to and interest receivable from SINA of $537.9 million as of  September 30,
2020 and $236.6 million as of December 31, 2019.

 

 

WEIBO CORPORATION

UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS

(In thousands, except per share data)



























Three months ended






September 30, 2020


September 30, 2019


June 30, 2020
























Non-GAAP






Non-GAAP






Non-GAAP






Actual


Adjustments


Results


Actual


Adjustments


Results


Actual


Adjustments


Results
























Advertising and marketing


$      416,672




$      416,672


$    412,489




$    412,489


$    340,584




$    340,584


Value-added service


49,067




49,067


55,264




55,264


46,809




46,809



Net revenues


$      465,739




$      465,739


$    467,753




$    467,753


$    387,393




$    387,393




















































(17,597)

 (a) 





(16,897)

 (a) 





(14,894)

 (a) 









(836)

 (b) 





(825)

 (b) 





(816)

 (b) 



Total costs and expenses


$      304,785


$    (18,433)


$      286,352


$    295,241


$    (17,722)


$    277,519


$    281,208


$    (15,710)


$    265,498




















































17,597

 (a) 





16,897

 (a) 





14,894

 (a) 









836

 (b) 





825

 (b) 





816

 (b) 



Income from operations


$      160,954


$      18,433


$      179,387


$    172,512


$      17,722


$    190,234


$    106,185


$      15,710


$    121,895




















































17,597

(a)





16,897

(a)





14,894

(a)









836

(b)





825

(b)





816

(b)









103,787

(c)





(644)

(c)





(117,379)

(c)









(3,658)

(d)





11,596

(d)





3,389

(d)









(21)

(e)





(21)

(e)





112

(e)









(1,062)

(f)





(122)

(f)





12,882

(f)









1,595

(g)





1,360

(g)





1,369

(g)



Net income attributable to Weibo

$ 33,798


$ 119,074


$ 152,872


$ 146,169


$ 29,891


$ 176,060


$ 198,416


$ (83,917)


$ 114,499
























Diluted net income per share attributable to Weibo

$ 0.15




$ 0.66

*

$ 0.64

*



$ 0.77

*

$ 0.86

*



$ 0.50

*























Shares used in computing diluted




















net income per share attributable to Weibo

227,793


6,753

(h)

234,546


233,126




233,126


233,983




233,983
























Adjusted EBITDA:











































Non-GAAP net income attributable to Weibo





$ 152,872






$ 176,060






$ 114,499




Interest income,net






(4,340)






(16,785)






(12,635)




Income tax expenses






31,065






31,484






27,862




Depreciation expenses






6,894






5,503






6,074



Adjusted EBITDA






$ 186,491






$ 196,262






$ 135,800






WEIBO CORPORATION
UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS
(In thousands, except per share data)






















Nine months ended






September 30, 2020


September 30, 2019










Non-GAAP






Non-GAAP






Actual


Adjustments


Results


Actual


Adjustments


Results


















Advertising and marketing


$ 1,032,678




$ 1,032,678


$ 1,124,290




$ 1,124,290


Value-added service


143,843




143,843


174,476




174,476



Net revenues


$ 1,176,521




$ 1,176,521


$ 1,298,766




$ 1,298,766








































(47,785)

(a)





(43,926)

(a)









(2,480)

(b)





(2,534)

(b)



Total costs and expenses


$ 851,367


$ (50,265)


$ 801,102


$ 851,919


$ (46,460)


$ 805,459
























































47,785

(a)





43,926

(a)









2,480

(b)





2,534

(b)



Income from operations


$ 325,154


$ 50,265


$ 375,419


$ 446,847


$ 46,460


$ 493,307
























































































47,785

(a)





43,926

(a)









2,480

(b)





2,534

(b)









(10,654)

(c)





3,513

(c)









(5,554)

(d)





10,025

(d)









94

(e)





(1,654)

(e)









11,992

(f)





(375)

(f)









4,333

(g)





3,432

(g)



Net income attributable to Weibo

$ 284,322


$ 50,476


$ 334,798


$ 399,607


$ 61,401


$ 461,008


















Diluted net income per share attributable to Weibo

$ 1.25




$ 1.47

*

$ 1.76

*



$ 2.01

*

















Shares used in computing diluted














net income per share attributable to Weibo

227,352


6,753

(h)

234,105


233,019




233,019


















Adjusted EBITDA:































Non-GAAP net income attributable to Weibo





$ 334,798






$ 461,008




Interest income, net






(30,324)






(46,641)




Income tax expenses






74,638






78,883




Depreciation expenses






18,942






16,699



Adjusted EBITDA






$ 398,054






$ 509,949


















(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) and (c). 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 and senior notes 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


Nine months ended




September 30,


June 30,


September 30,




2020


2019


2020


2020


2019














Net revenues












Advertising and marketing












Key accounts and small & medium-sized enterprises

$ 387,517


$ 393,331


$ 304,838


$ 940,210


$ 1,064,378



Alibaba

29,155


19,158


35,746


92,468


59,912



Subtotal

416,672


412,489


340,584


1,032,678


1,124,290















Value-added service

49,067


55,264


46,809


143,843


174,476




$ 465,739


$ 467,753


$ 387,393


$ 1,176,521


$ 1,298,766


Cision
Cision

View original content:http://www.prnewswire.com/news-releases/weibo-reports-third-quarter-2020-unaudited-financial-results-301198589.html

SOURCE Weibo Corporation