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Weibo Reports Second Quarter 2017 Financial Results

Second Quarter 2017 Highlights

  • Net revenues totaled $253.4 million, an increase of 72% year-over-year, exceeding the Company's guidance between $240 million and $250 million.
  • Advertising and marketing revenues were $218.3 million, an increase of 72% year-over-year.
  • Other revenues were $35.0 million, an increase of 78% year-over-year.
  • Net income attributable to Weibo was $73.5 million, an increase of 184% year-over-year, and diluted net income per share was $0.33, compared to $0.12 for the same period last year.
  • Non-GAAP net income attributable to Weibo was $86.7 million, an increase of 144% year-over-year, and non-GAAP diluted net income per share was $0.38, compared to $0.16 for the same period last year.
  • Adjusted EBITDA was $103.1 million, an increase of 166% year-over-year, or 41% of net revenues, compared to 26% for the same period last year.
  • Monthly active users ("MAUs") in June 2017 was 361 million, an increase of 28% year-over-year, 92% of which were mobile users. Average daily active users in June 2017 was 159 million, an increase of 26% year-over-year.

"We continue to see great momentum in our business. Revenues from SMEs, key accounts and non-advertising all saw robust growth, while our profit and user base reached new highs," said Gaofei Wang, CEO of Weibo. "These strong results give us confidence that our strategy to focus on developing a unique and expansive content ecosystem, launching engaging features like Weibo Stories, and attracting KOLs, celebrities and other influencers to increase the social and viral nature of Weibo is boding well for us."

Second Quarter 2017 Financial Results

For the second quarter of 2017, Weibo reported net revenues of $253.4 million, compared to $146.9 million for the same period last year. Advertising and marketing revenues totaled $218.3 million, compared to $127.2 million for the same period last year, and advertising and marketing revenues from small & medium-sized enterprises ("SMEs") and key accounts were $205.1 million, compared to $114.3 million for the same period last year. Other revenues totaled $35.0 million, compared to $19.7 million for the same period last year.

Costs and expenses for the second quarter of 2017 totaled $165.4 million, compared to $119.6 million for the same period last year. The rise in costs and expenses was primarily due to an increase in marketing expenses, turnover taxes (resulting from higher revenues), development costs and stock-based compensation. Non-GAAP costs and expenses were $153.3 million, compared to $112.2 million for the same period last year.

Income from operations for the second quarter of 2017 was $88.0 million, compared to $27.3 million for the same period last year. Non-GAAP income from operations was $100.1 million, compared to $34.7 million for the same period last year.

Non-operating income for the second quarter of 2017 was $1.5 million, compared to a non-operating loss of $1.0 million for the same period last year. Income tax expenses were $16.4 million, compared to $1.8 million for the same period last year, primarily due to higher profitability and the change in tax status of the Company's PRC subsidiary from being fully tax exempted to being subject to 50% of the enterprise income tax rate, or 12.5%, in 2017.

Net income attributable to Weibo for the second quarter of 2017 was $73.5 million, or diluted net income per share of $0.33, compared to $25.9 million for the same period last year, or diluted net income per share of $0.12. Non-GAAP net income attributable to Weibo for the second quarter of 2017 was $86.7 million, or diluted net income per share of $0.38, compared to $35.5 million for the same period last year, or diluted net income per share of $0.16.

As of June 30, 2017, Weibo's cash, cash equivalents and short-term investments totaled $609.2 million. For the second quarter of 2017, cash provided by operating activities was $157.2 million, capital expenditures totaled $2.5 million, and depreciation and amortization expenses amounted to $3.5 million.

Business Outlook

For the third quarter of 2017, Weibo estimates that its net revenues to be between $290 million and $300 million, which assumes an average exchange rate of 6.75 RMB to US$1.00. This forecast reflects Weibo's current and preliminary view, which is subject to change.

Conference Call

Weibo's management team will host a conference call from 7 AM - 8 AM Eastern Time on August 9, 2017 (or 7 PM - 8 PM Beijing Time on August 9, 2017) 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
China Toll Free: 400-620-8038
International: +65 6713-5090
Passcode for all regions: 64857454

A replay of the conference call will be available from 10:00 AM Eastern Time on August 9, 2017-10:00 AM Eastern time on August 17, 2017. The dial-in number is +61 2-8199-0299. The passcode for the replay is 64857454.

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 gain on the sale of investments and impairment on investments, non-GAAP to GAAP reconciling items for the loss attributable to non-controlling interest, and provision for income tax related to the amortization of intangible assets (other non-GAAP to GAAP reconciling items have no tax effect). Adjusted EBITDA excludes interest income, 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...


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