Le Lézard
Classified in: Science and technology, Business
Subjects: ERN, CCA

Weibo Reports Third Quarter 2019 Unaudited Financial Results


BEIJING, Nov. 14, 2019 /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, 2019.

"We are pleased with the sustained momentum in our user and engagement growth," said Gaofei Wang, CEO of Weibo. "Leveraging stronger network effect, ongoing product innovation and robust content ecosystem, Weibo continued to reinforce its leadership as a social media platform and further explore opportunities to deliver value to our community. On monetization, despite market competition and macro headwinds, we continued to tap into customers' social ad wallet with differentiated ad products and KOL's rising influence."

Third Quarter 2019 Highlights

[1] On a constant currency (non-GAAP) basis, we assume that the exchange rate in the third quarter of 2019 had been the same as it was in the third quarter of 2018, or RMB 6.80=US$1.00.

Third Quarter 2019 Financial Results

For the third quarter of 2019, Weibo's total net revenues were $467.8 million, an increase of 2% compared to $460.2 million for the same period last year.

Advertising and marketing revenues for the third quarter of 2019 were $412.5million, an increase of 1% compared to $409.3 million for the same period last year. Advertising and marketing revenues from key accounts ("KAs") and small & medium-sized enterprises ("SMEs") were $393.3 million, representing an increase of 3% compared to $380.7 million for the same period last year.

VAS revenues for the third quarter of 2019 were $55.3 million, an increase of 9% year-over-year compared to $50.9 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.

Costs and expenses for the third quarter of 2019 totaled $295.2 million, compared to $298.2 million for the same period last year. Non-GAAP costs and expenses were $277.5 million, compared to $272.2 million for the same period last year.

Income from operations for the third quarter of 2019 was $172.5 million, compared to $162.0 million for the same period last year. Non-GAAP income from operations was $190.2 million, compared to $188.0 million for the same period last year.

Non-operating income for the third quarter of 2019 was $5.3 million, compared to an income of $42.9 million for the same period last year. The decrease was mainly due to the recognition of a $41.9 million investment related fair value mark to market gain in the third quarter of 2018.

Income tax expenses for the third quarter were $31.4 million, compared to $37.9 million for the same period last year.

Net income attributable to Weibo for the third quarter of 2019 was $146.2 million, compared to $165.3 million for the same period last year. Diluted net income per share attributable to Weibo for the third quarter of 2019 was $0.64, compared to $0.73 for the same period last year. Non-GAAP net income attributable to Weibo for the third quarter of 2019 was $176.1 million, compared to $171.8 million for the same period last year. Non-GAAP diluted net income per share attributable to Weibo for the third quarter of 2019 was $0.77, compared to $0.75 for the same period last year.

As of September 30, 2019, Weibo's cash, cash equivalents and short-term investments totaled $2.37 billion. For the third quarter of 2019, cash provided by operating activities was $164.8 million, capital expenditures totaled $4.4 million, and depreciation and amortization expenses amounted to $6.3 million.

Annual General Meeting

On November 12, 2019, the Company held its annual general meeting of shareholders, where the shareholders re-elected each of Mr. Daniel Zhang and Mr. Pehong Chen as a director of Weibo.

Business Outlook

For the fourth quarter of 2019, Weibo estimates its net revenues to increase 0% year-over-year to 3% 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 6AM ? 7AM Eastern Time on November 14, 2019 (or 7PM ? 8PM Beijing Time on November 14, 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
Mainland China:  400-620-8038
International:  +65 6713-5090
Passcode for all regions: 3286074

A replay of the conference call will be available from 22:00 China Standard Time on November 14, 2019 to 20:59 China Standard Time on November 22, 2019. The dial-in number is +61 2-8199-0299. The passcode for the replay is 3286074.

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


Nine months ended





September 30,


June 30,


September 30,





2019


2018


2019


2019


2018















Net revenues:












     Advertising and marketing


$        412,489


$        409,273


$        370,660


$     1,124,290


$     1,082,164


     Value-added service


55,264


50,898


61,176


174,476


154,479



Net revenues


467,753


460,171


431,836


1,298,766


1,236,643















Costs and expenses:












     Cost of revenues (1)


73,471


70,016


81,972


238,260


194,708


     Sales and marketing (1)


129,411


141,059


106,405


341,967


386,899


     Product development(1)


69,036


66,222


70,368


209,257


187,358


     General and administrative(1)


23,323


10,361


21,825


62,435


30,890


     Goodwill and acquired intangibles impairment


-


10,554


-


-


10,554



Total costs and expenses


295,241


298,212


280,570


851,919


810,409


Income from operations


172,512


161,959


151,266


446,847


426,234















Non-operating income (loss):

























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


644


31,683


(41,954)


(3,513)


28,649


    Interest and other income , net


4,665


11,218


17,999


33,445


32,827





5,309


42,901


(23,955)


29,932


61,476















Income before income tax expenses


177,821


204,860


127,311


476,779


487,710


     Income tax expenses


(31,362)


(37,882)


(26,073)


(78,508)


(81,327)















Net income


146,459


166,978


101,238


398,271


406,383















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

290


1,661


(1,758)


(1,336)


1,067















Net income attributable to Weibo

$        146,169


$        165,317


$        102,996


$        399,607


$        405,316




























Basic net income per share attributable to Weibo

$               0.65


$               0.74


$               0.46


$               1.77


$               1.81


Diluted net income per share attributable to Weibo

$               0.64


$               0.73


$               0.46


$               1.76


$               1.79















Shares used in computing basic












   net income per share attributable to Weibo

225,610


224,060


225,262


225,268


223,506


Shares used in computing diluted












   net income per share attributable to Weibo

233,126


232,660


226,277


233,019


232,719




























(1) Stock-based compensation in each category:













Cost of revenues


$             1,533


$             1,684


$             1,118


$             3,763


$             4,140



Sales and marketing


2,899


3,243


2,129


7,067


8,042



Product development


7,828


7,829


6,618


20,504


18,944



General and administrative


4,637


2,598


4,269


12,592


7,490


 

 

 

WEIBO CORPORATION


UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS


(In thousands)
















September 30,


December 31,







2019


2018











Assets



Current assets:









Cash and cash equivalents


$               1,776,634


$               1,234,596





Short-term investments


593,272


591,269





Accounts receivable, net


476,484


369,093





Prepaid expenses and other current assets


314,589


168,821





Amount due from SINA(1)


350,966


105,319





      Current assets subtotal


3,511,945


2,469,098












Property and equipment, net


43,135


45,623



Goodwill and intangible assets, net


46,117


50,449



Long-term investments


944,815


694,586



Other assets(2)


55,787


14,926



Total assets


$               4,601,799


$               3,274,682











Liabilities and Shareholders' Equity 



Liabilities:








Current liabilities:









Accounts payable


$                  131,969


$                  123,730





Accrued expenses and other current liabilities(2)

411,955


317,437





Deferred revenues


136,609


99,994





Income tax payable


98,139


88,683





     Current liabilities subtotal


778,672


629,844













Long-term liabilities:









Convertible debt


887,230


884,123





Senior notes


793,682


-





Other long-term liabilities(2)


18,245


12,577





     Total liabilities


2,477,829


1,526,544












Shareholders' equity :








Weibo shareholders' equity 


2,124,929


1,745,459




Non-controlling interests


(959)


2,679





Total shareholders' equity 


2,123,970


1,748,138












Total liabilities and shareholders' equity 


$               4,601,799


$               3,274,682







-


-



(1) Included short-term loans to SINA of $228.1 million as of  September 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
$10.5 million of right-of-use asset and a total of $10.8 million of leasing liability as of September 30, 2019.





 

 

 

WEIBO CORPORATION

UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS

(In thousands, except per share data)



























Three months ended






September 30, 2019


September 30, 2018


June 30, 2019
























Non-GAAP






Non-GAAP






Non-GAAP






Actual


Adjustments


Results


Actual


Adjustments


Results


Actual


Adjustments


Results
























Advertising and marketing


$      412,489




$      412,489


$    409,273




$    409,273


$    370,660




$    370,660


Value-added service


55,264




55,264


50,898




50,898


61,176




61,176



Net revenues


$      467,753




$      467,753


$    460,171




$    460,171


$    431,836




$    431,836




































(15,354)

 (a) 















(16,897)

 (a) 





(90)

 (b) 





(14,134)

 (a) 









(825)

 (b) 





(10,554)

 (c) 





(849)

 (b) 



Total costs and expenses


$      295,241


$    (17,722)


$      277,519


$    298,212


$    (25,998)


$    272,214


$    280,570


$    (14,983)


$    265,587




































15,354

 (a) 















16,897

 (a) 





90

 (b) 





14,134

 (a) 









825

 (b) 





10,554

 (c) 





849

 (b) 



Income from operations


$      172,512


$      17,722


$      190,234


$    161,959


$      25,998


$    187,957


$    151,266


$      14,983


$    166,249




















































16,897

 (a) 





15,354

 (a) 





14,134

 (a) 









825

 (b) 





90

 (b) 





849

 (b) 









(644)

 (d) 





10,554

 (c) 





41,954

 (d) 









11,596

 (e) 





(31,683)

 (d) 





(2,820)

 (e) 









(21)

 (f) 





1,560

 (f) 





(1,588)

 (f) 









(122)

 (g) 





9,582

 (g) 





(127)

 (g) 









1,360

 (h) 





1,035

 (h) 





1,037

 (h) 



Net income attributable to Weibo

$      146,169


$      29,891


$      176,060


$    165,317


$        6,492


$    171,809


$    102,996


$      53,439


$    156,435
























Diluted net income per share attributable to Weibo

$             0.64

*



$             0.77

*

$           0.73

*



$           0.75

*

$           0.46




$           0.68

*























Shares used in computing  diluted




















    net income per share attributable to Weibo

233,126




233,126


232,660




232,660


226,277


6,754

 (i) 

233,031
























Adjusted EBITDA:











































Non-GAAP net income attributable to Weibo





$      176,060






$    171,809






$    156,435




Interest income,net






(16,785)






(11,733)






(15,648)




Income tax expenses






31,484






28,300






26,200




Depreciation expenses






5,503






4,437






5,891



Adjusted EBITDA






$      196,262






$    192,813






$    172,878


























































































WEIBO CORPORATION

UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS

(In thousands, except per share data)



























Nine months ended












September 30, 2019


September 30, 2018
















Non-GAAP






Non-GAAP












Actual


Adjustments


Results


Actual


Adjustments


Results






























Advertising and marketing


$  1,124,290




$  1,124,290


$1,082,164




$1,082,164








Value-added service


174,476




174,476


154,479




154,479









Net revenues


$  1,298,766




$  1,298,766


$1,236,643




$1,236,643










































(38,616)

 (a) 















(43,926)

 (a) 





(423)

 (b) 















(2,534)

 (b) 





(10,554)

 (c) 









Total costs and expenses


$      851,919


$    (46,460)


$      805,459


$    810,409


$    (49,593)


$    760,816
































































38,616

 (a) 















43,926

 (a) 





423

 (b) 















2,534

 (b) 





10,554

 (c) 









Income from operations


$      446,847


$      46,460


$      493,307


$    426,234


$      49,593


$    475,827




























































































































43,926

 (a) 





38,616

 (a) 















2,534

 (b) 





423

 (b) 















3,513

 (d) 





10,554

 (c) 















10,025

 (e) 





(28,649)

 (d) 















(1,654)

 (f) 





1,719

 (f) 















(375)

 (g) 





9,499

 (g) 















3,432

 (h) 





3,105

 (h) 









Net income attributable to Weibo

$      399,607


$      61,401


$      461,008


$    405,316


$      35,267


$    440,583






























Diluted net income per share attributable to Weibo

$             1.76

*



$             2.01

*

$           1.79

*



$           1.93

*





























Shares used in computing  diluted




















    net income per share attributable to Weibo

233,019




233,019


232,719




232,719






























Adjusted EBITDA:











































Non-GAAP net income attributable to Weibo





$      461,008






$    440,583










Interest income, net






(46,641)






(35,246)










Income tax expenses






78,883






71,828










Depreciation expenses






16,699






13,584









Adjusted EBITDA






$      509,949






$    490,749






























(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


Nine months ended




September 30,


June 30,


September 30,




2019


2018


2019


2019


2018














Net revenues












Advertising and marketing












     Key accounts and small & medium-sized enterprises

$      393,331


$     380,745


$        346,541


$  1,064,378


$     996,020



     Alibaba

19,158


28,528


24,119


59,912


86,144



         Subtotal

412,489


409,273


370,660


1,124,290


1,082,164















Value-added service

55,264


50,898


61,176


174,476


154,479




$      467,753


$     460,171


$        431,836


$  1,298,766


$ 1,236,643


 

 

SOURCE Weibo Corporation


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