Weibo Q4 reported a net profit of $166.5 million, up 27percent from a year earlier.

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 Weibo Q4 reported a net profit of $166.5 million, up 27percent from a year earlier.


According to the financial report, the net revenue of Weibo in 2018 was $1.72 billion, an increase of 49% over the previous year; the net profit attributed to Weibo was $571.8 million, an increase of 62% over the previous year.

Performance Focus in the Fourth Quarter of 2018

Net revenue was $481.9 million, up 28% year-on-year.

Advertising and marketing revenue totaled $417 million, up 25% year on year.

Revenue of value-added services was $64.9 million, up 44% year on year.

Net profit attributable to Weibo was 166.5 million US dollars, up 27% year-on-year, or 73 cents a share, compared with 58 cents a year earlier.

Non-US GAAP net profit attributed to Weibo was 183.6 million US dollars, up 26% year-on-year, or 80 cents a share, compared with 64 cents a year earlier.

In December 2018, the number of active users per month (MAUs) increased by about 70 million, reaching 462 million, compared with the same period last year. 93% of the monthly active users are mobile users.

In December 2018, the average number of active users per day (DAUs) increased by 28 million net to 200 million over the same period last year.

Focus Performance in 2018

Net revenue was $1.72 billion, up 49% from the previous year.

Advertising and marketing revenue was $1.5 billion, up 50% from the previous year.

Revenue of value-added services was $213.3 billion, an increase of 43% over the previous year.

The net profit attributed to Weibo was 571.8 million US dollars, an increase of 62% over the previous year; the net profit rate was 33% and 31% in 2017. Net income per diluted share was $2.52, compared with $1.56 in 2017.

Non-US GAAP net profit attributed to Weibo was 624.2 million US dollars, an increase of 54% over the previous year, while non-US GAAP net profit margin was 36% and 35% in 2017. Non-US GAAP net profit per diluted share was $2.73, compared with $1.80 in the previous year.

Corporate Performance in the Fourth Quarter of 2018

Net revenue in the fourth quarter of 2018 was $481.9 million, up 28% from $377.4 million in the same period last year.

Advertising and marketing revenue in the fourth quarter of 2018 was $417 million, up 25% from $332.3 million in the same period last year, mainly due to the increase of $91.5 million in advertising and marketing revenue from small and medium-sized enterprises and large customers, an increase of 31% over the same period last year.

Revenue of value-added services in the fourth quarter of 2018 was $64.9 million, up 44% from $45.1 million in the same period last year, mainly due to revenue growth of newly acquired Live services in the fourth quarter of 2018.

Costs and expenditures totaled $298.8 million in the fourth quarter of 2018, compared with $232.2 million in the same period last year. In addition to the new revenue rules shown in the chart below, which incorporate marketing expenditures related to swap transactions into costs and expenditures, the comparative increase in costs and expenditures is mainly related to the increase in revenue-sharing expenditures caused by the newly acquired live business, as well as the increase in human-related costs and expenditures. The cost and expenditure of non-US GAAP in the fourth quarter of 2018 was $295.5 million, compared with $220 million in the same period last year.

In the fourth quarter of 2018, operating profit was 183 million US dollars, compared with 145.3 million US dollars in the same period last year. In the fourth quarter of 2018, the operating profit of non-US GAAP was US$186.4 million, compared with US$157.5 million in the same period last year.

In the fourth quarter of 2018, non-operating losses amounted to $1.9 million, while non-operating profits amounted to $1.7 million in the same period last year, which was mainly related to the investment impairment of $12.3 million in the fourth quarter of 2018.

Income tax expenditure in the fourth quarter of 2018 was $14.9 million, compared with $17 million in the same period last year.

Net profit attributable to Weibo in the fourth quarter of 2018 was $166.5 million, compared with $131 million in the same period last year. In the fourth quarter of 2018, the net profit per share attributable to Weibo was 73 cents, compared with 58 cents in the same period last year. In the fourth quarter of 2018, non-US GAAP net profit attributed to Weibo was US$183.6 million, compared with US$146 million in the same period last year. In the fourth quarter of 2018, non-US GAAP net profit per share was 80 cents, compared with 64 cents in the same period last year.

As of December 31, 2018, the total cash, cash equivalents and short-term investment of Weibo was $1.83 billion. In the fourth quarter of 2018, operating activities provided $164 million in cash, $10.4 million in capital expenditure and $5.8 million in depreciation and amortization costs.

Business Performance in 2018

Net revenue in 2018 was $1.72 billion, up 49% from $1.150 billion in 2017.

In 2018, advertising and marketing revenue was $1.5 billion, up 50% from $967.7 billion in 2017. In 2018, advertising and marketing revenue from SMEs and big customers was $1.38 billion, up 51% from $912.1 billion in 2017. Advertising and marketing revenue from Alibaba was $117.7 million in 2018 and $84.7 million in 2017.

Revenue of microblog value-added services in 2018 was $213.3 million, up 43% from $153.3 million in 2017. The growth was mainly due to the growth of membership fee revenue and revenue from live broadcasting business.

Costs and expenditures totaled $1.11 billion in 2018 and $742.5 million in 2017. In addition to the new revenue rules shown in the chart below, which incorporate marketing expenditures related to swap transactions into costs and expenditures, the growth in costs and expenditures is mainly attributable to increased sales and marketing expenditures for acquiring users, channel investments and human-related costs and expenditures. The total cost and expenditure of non-US GAAP in 2018 was US$1.06 billion and US$693.8 million in 2017.

The operating profit in 2018 was $609.3 million, and that in 2017 was $407.6 million. The operating profit of non-US GAAP was $662.2 million in 2018 and $452 million in 2017.

Non-operating earnings for the whole year of 2018 were $59.6 million and $9.6 million in 2017. The growth was mainly due to the increase of interest income and changes in fair value of investment.

The total income tax expenditure in 2018 was $96.2 million, compared with $66.7 million in the previous year. Income tax expenditure growth is mainly related to revenue growth in fiscal year 2018.

The net profit attributed to Weibo in 2018 was 571.8 million US dollars, compared with 352.6 million US dollars in 2017. The net profit per diluted share was $2.52 in 2018 and $1.56 in 2017. Non-US GAAP net profit attributed to Weibo was $624.2 million in 2018 and $405.7 million in 2017. Non-US GAAP net profit per share was $2.73 in 2018 and $1.80 in 2017.

Financial impact of new revenue standards

The company has adopted the new revenue criteria since January 1, 2018. The revenue published after January 1, 2018 is compiled according to the new revenue criteria (new basis), while the revenue published before January 1, 2018 is compiled according to the old revenue criteria (old basis) and will not be adjusted. The old compilation basis is the accounting method adopted in the companys history.

The impact of the companys adoption of the new revenue criteria on current earnings performance is listed below.

Performance outlook

Weibo expects net revenue in the first quarter of 2019 to be between $395 million and $405 million, or between 20.5% and 23.5% annually in Yuan terms. This expectation assumes that the average exchange rate of RMB to US dollar is 6.75 RMB to US dollar. These expectations reflect the current preliminary judgment of Weibo and may be adjusted in the future.