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Weibo Reports Fourth Quarter and Fiscal Year 2015 Financial Results

BEIJING, March 02, 2016 (GLOBE NEWSWIRE) -- 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, 2015.

Fourth Quarter 2015 Highlights

  • Net revenues increased 42% year over year to $149.0 million, reaching the high end of the Company’s guidance between $146 million and $149 million.
  • Advertising and marketing revenue increased 47% year over year to $129.5 million.
  • Weibo Value-Added Services (“Weibo VAS”) revenue increased 13% year over year to $19.5 million, despite a 31% year-over-year decline in revenue from data licensing, a deemphasized business.
  • Net income attributable to Weibo’s ordinary shareholders increased 332% year over year to $19.1 million, and diluted net income per share was $0.09, compared to $0.02 for the same period last year.
  • Non-GAAP net income attributable to Weibo’s ordinary shareholders increased 258% to $32.9 million and non-GAAP diluted net income per share was $0.15, compared to $0.04 for the same period last year.
  • Adjusted EBITDA increased 131% year over year to $37.0 million.
  • Monthly active users (“MAUs”) in December 2015 grew 34% year over year to 236 million, 83% of which were mobile users. Average daily active users (“DAUs”) in December 2015 grew 32% year over year to 106 million.

Fiscal Year 2015 Highlights

  • Net revenues increased 43% year over year to $477.9 million.
  • Advertising and marketing revenue increased 52% year over year to $402.4 million.
  • Weibo VAS revenue increased 9% year over year to $75.5 million.
  • Net income attributable to Weibo’s ordinary shareholders reached $34.7 million, or diluted net income per share of $0.16, compared to a net loss of $65.3 million for 2014, or diluted net loss per share of $0.35.
  • Non-GAAP net income attributable to Weibo’s ordinary shareholders was $68.8 million, or non-GAAP diluted net income per share of $0.32, compared to a non-GAAP net loss of $2.3 million for 2014, or non-GAAP diluted net loss per share of $0.01.
  • Adjusted EBITDA increased 454% year over year to $85.7 million.

“Weibo ended 2015 on a high note with non-Alibaba advertising and marketing revenues growing 69% year over year on a constant currency basis and adjusted EBITDA margin reaching 25% in the fourth quarter,” said Gaofei Wang, Weibo’s CEO. “On the user side, Weibo’s traffic growth continues to be robust, as we are positioned at the conjuncture of social, mobile and video. For example, in December 2015, mobile DAUs grew 46% year over year to 94 million and average daily video views grew 53% sequentially.”

Fourth Quarter 2015 Financial Results

For the fourth quarter of 2015, Weibo reported net revenues of $149.0 million, compared to $105.2 million for the same period last year. Advertising and marketing revenue totaled $129.5 million, compared to $88.0 million for the same period last year. Weibo VAS revenue totaled $19.5 million, compared to $17.2 million for the same period last year.

Costs and expenses for the fourth quarter of 2015 totaled $123.2 million, compared to $100.6 million for the same period last year. Non-GAAP costs and expenses were $116.3 million, compared to $95.7 million for the same period last year. The increase in non-GAAP costs and expenses was primarily due to an increase in infrastructure costs resulting from strong video consumption and overall growth traffic, an increase in game and other revenue share, value added taxes associated with higher revenues, and higher personnel-related costs.

Income from operations for the fourth quarter of 2015 was $25.8 million, compared to $4.7 million for the same period last year. Non-GAAP income from operations was $32.8 million, compared to $9.5 million for the same period last year.

Non-operating loss for the fourth quarter of 2015 was $5.8 million, compared to a non-operating income of $3.0 million for the same period last year. Non-operating loss for the fourth quarter of 2015 included write downs on investments of $7.2 million.

Net income attributable to Weibo’s ordinary shareholders for the fourth quarter of 2015 was $19.1 million, or diluted net income per share of $0.09, compared to $4.4 million for the same period last year, or diluted net income per share of $0.02. Non-GAAP net income attributable to Weibo’s ordinary shareholders for the fourth quarter of 2015 was $32.9 million, or diluted net income per share of $0.15, compared to $9.2 million for the same period last year, or diluted net income per share of $0.04.

As of December 31, 2015, Weibo’s cash, cash equivalents and short-term investments totaled $335.9 million. For the fourth quarter of 2015, cash provided by operating activities was $51.7 million, capital expenditures totaled $2.7 million, and depreciation and amortization expenses amounted to $4.4 million.

Business Outlook

For the first quarter of 2016, Weibo estimates that its net revenues to be between $111 million and $116 million. This forecast reflects Weibo’s current and preliminary view, which is subject to change.

Non-GAAP Measures

This release contains the following non-GAAP financial measures: non-GAAP costs and expenses, non-GAAP income (loss) from operations, non-GAAP net income (loss), non-GAAP diluted net income (loss) per share attributable to Weibo’s ordinary shareholders 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 of tax, change in fair value of investor option liability, gain on the sale of investments and impairment on investments, net, and dividend income from investments. In addition, adjusted EBITDA excludes depreciation expenses, interest income (expenses) and income tax expenses (benefits). 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 measures to the nearest comparable GAAP measures are set forth in the section below titled “Unaudited Reconciliation of Non-GAAP to GAAP Results.”

The unaudited condensed combined and consolidated statements of operations and balance sheets have been prepared assuming that the Weibo funds acquired from SINA on June 30, 2015 as if they had been owned by Weibo for all periods. Impact of such funds to each period was not significant.

Conference Call

Weibo will host a conference call at 8 PM - 9 PM Eastern Time on March 2, 2016 (or 9 AM – 10 AM Beijing Time on March 3, 2016) 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 (888) 346-8982
Hong Kong Toll Free: +852 800-905-945
China Toll Free: +86 400-120-1203
International: +1 (412) 902-4272
Passcode for all regions: Weibo

A replay of the conference call will be available through midnight Eastern Time, March 9, 2016. The dial-in number is +1 (412) 317-0088. The passcode for the replay is 10081694.

About Weibo Corporation

Weibo is a leading social media for people to create, share and discover Chinese-language content. Weibo combines the means of public self-expression in real time with a powerful platform for social interaction, as well as content aggregation and distribution. Any user can create and post a feed of up to 140 Chinese characters and attach multi-media or 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 variety of advertising and marketing solutions to its customers, ranging from large brand advertisers to Alibaba/e-commerce merchants to small and medium sized enterprises to individuals. The Company generates a substantial majority of revenues from the sale of advertising and marketing services, including the sale of social display ads, promoted feeds and event-based ad solutions. Weibo has developed and is continuously refining its social interest graph recommendation engine, which enables its 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 develop the small and medium enterprise market by the Company or through cooperation with other parties, including Alibaba; 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-F for the fiscal year ended December 31, 2014 filed with the SEC on April 28, 2015 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.

WEIBO CORPORATION
UNAUDITED CONDENSED COMBINED AND CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. Dollars in thousands, except per share data)
Three months ended Twelve months ended
December 31, September 30, December 31,
2015 2014 2015 2015 2014
As adjusted (a) As adjusted (a)
Net revenues:
Advertising and marketing $ 129,527 $ 87,973 $ 105,861 $ 402,415 $ 264,782
Weibo VAS 19,498 17,239 18,873 75,476 69,390
Total net revenues 149,025 105,212 124,734 477,891 334,172
Cost of revenues (b) 42,105 25,786 37,241 141,960 83,599
Sales and marketing (b) 36,253 34,054 30,106 126,059 120,361
Product development (b) 36,614 33,112 37,493 143,444 125,832
General and administrative (b) 8,265 7,610 5,996 28,925 26,483
Total costs and expenses 123,237 100,562 110,836 440,388 356,275
Income (loss) from operations 25,788 4,650 13,898 37,503 (22,103)
Non-operating income (loss):
Gain on sale of and impairment on investments, net (7,207) - (462) (7,061) (2,040)
Interest and other income , net 1,443 3,017 1,818 6,338 6,775
Change in fair value of investor option liability - - - - (46,972)
(5,764) 3,017 1,356 (723) (42,237)
Income (loss) before income tax expenses 20,024 7,667 15,254 36,780 (64,340)
Income tax expenses (1,152) (2,877) (1,030) (2,591) (1,128)
Net income (loss) 18,872 4,790 14,224 34,189 (65,468)
Less: Net income (loss) attributable to
noncontrolling interest
(250) 362 (253) (556) (143)
Net income (loss) attributable to Weibo' ordinary
shareholders
$ 19,122 $ 4,428 $ 14,477 $ 34,745 $ (65,325)
Basic net income (loss) per share attributable to
Weibo’s ordinary shareholders
$ 0.09 $ 0.02 $ 0.07 $ 0.17 $ (0.35)
Diluted net income (loss) per share attributable to
Weibo’s ordinary shareholders
$ 0.09 $ 0.02 $ 0.07 $ 0.16 $ (0.35)
Shares used in computing basic
net income (loss) per share attributable to Weibo’s
ordinary shareholders
210,764 202,844 209,356 208,163 186,878
Shares used in computing diluted
net income (loss) per share attributable to Weibo’s
ordinary shareholders
219,464 216,845 217,681 217,918 186,878
(a) The unaudited condensed combined and consolidated statements of operations have been prepared assuming that the Weibo funds acquired from SINA on June 30, 2015 as if they had been owned by Weibo for all periods.
(b) Stock-based compensation in each category:
Cost of revenues $ 275 $ 194 $ 380 $ 1,196 $ 755
Sales and marketing 856 368 924 3,209 1,583
Product development 2,473 1,655 3,028 10,210 4,392
General and administrative 3,006 2,290 2,917 11,784 7,049

WEIBO CORPORATION
UNAUDITED CONDENSED COMBINED AND CONSOLIDATED BALANCE SHEETS
(U.S. Dollars in thousands)
December 31, December 31,
2015 2014
As adjusted (a)
Assets
Current assets:
Cash and cash equivalents $ 237,440 $ 284,865
Short-term investments 98,439 166,414
Accounts receivable, net 120,230 120,210
Prepaid expenses and other current assets 42,295 18,357 (b)
Current assets subtotal 498,404 589,846
Property and equipment, net 22,850 30,874
Goodwill and intangible assets, net 13,083 15,191
Investments 294,679 63,777
Other assets 10,173 3,826 (b)
Total assets $ 839,189 $ 703,514
Liabilities and Shareholders' Equity
Liabilities:
Current liabilities:
Accounts payable $ 2,532 $ 2,420
Accrued liabilities 154,964 87,595
Deferred revenues 39,091 20,957
Amount due to SINA 12,188 24,279
Current liabilities subtotal 208,775 135,251
Long-term liability 2,385 873
Total liabilities 211,160 136,124
Shareholders' equity :
Weibo ordinary shareholders' equity 620,672 559,204
Non-controlling interest 7,357 8,186
Total shareholders' equity 628,029 567,390
Total liabilities and shareholders' equity $ 839,189 $ 703,514
(a) The unaudited condensed combined and consolidated balance sheets have been prepared assuming that the Weibo funds acquired from SINA on June 30, 2015 as if they had been owned by Weibo for all periods.
(b) In 2015, Weibo early adopted the guidance of ASU 2015-17 issued by FASB in November 2015, which requires entities to present deferred tax assets ("DTA") and deferred tax liabilities as non-current in the balance sheets. Pursuant to the guidance, Weibo retrospectively reclassified $18 thousand of current DTA from prepaid expenses and other current assets into other assets in the consolidated balance sheet as of December 31, 2014.

WEIBO CORPORATION
UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS
(U.S. Dollars in thousands, except per share data)
Three months ended
December 31, 2015 December 31, 2014 September 30, 2015
As adjusted
Non-GAAP Non-GAAP Non-GAAP
Actual Adjustments Results Actual Adjustments Results Actual Adjustments Results
Advertising and marketing $ 129,527 $ 129,527 $ 87,973 $ 87,973 $ 105,861 $ 105,861
Weibo VAS 19,498 19,498 17,239 17,239 18,873 18,873
Net revenues $ 149,025 $ 149,025 $ 105,212 $ 105,212 $ 124,734 $ 124,734
(6,610) (a) (4,507) (a) (7,249) (a)
(359) (b) (381) (b) (364) (b)
Total costs and expenses $ 123,237 $ (6,969) $ 116,268 $ 100,562 $ (4,888) $ 95,674 $ 110,836 $ (7,613) $ 103,223
6,610 (a) 4,507 (a) 7,249 (a)
359 (b) 381 (b) 364 (b)
Income from operations $ 25,788 $ 6,969 $ 32,757 $ 4,650 $ 4,888 $ 9,538 $ 13,898 $ 7,613 $ 21,511
6,610 (a) 7,249 (a)
269 (b) 4,507 (a) 273 (b)
7,207 (c) 287 (b) 462 (c)
(267) (d) (12)(d) (323) (d)
Net income attributable to Weibo's
ordinary shareholders
$ 19,122 $ 13,819 $ 32,941 $ 4,428 $ 4,782 $ 9,210 $ 14,477 $ 7,661 $ 22,138
Diluted net income per share attributable to
Weibo’s ordinary shareholders
$ 0.09 $ 0.15 $ 0.02 $ 0.04 $ 0.07 $ 0.10
Shares used in computing diluted
net income per share attributable to
Weibo’s ordinary shareholders
219,464 219,464 216,845 216,845 217,681 217,681
Adjusted EBITDA:
Non-GAAP net income $ 32,941 $ 9,210 $ 22,138
Interest income, net (1,152) (1,766) (1,433)
Income tax expenses 1,242 2,971 1,121
Depreciation expenses 4,006 5,647 4,696
Adjusted EBITDA $ 37,037 $ 16,062 $ 26,522
WEIBO CORPORATION
UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS
(U.S. Dollars in thousands, except per share data)
Twelve months ended
December 31, 2015 December 31, 2014
As adjusted
Non-GAAP Non-GAAP
Actual Adjustments Results Actual Adjustments Results
Advertising and marketing $ 402,415 $ 402,415 $ 264,782 $ 264,782
Weibo VAS 75,476 75,476 69,390 69,390
Net revenues $ 477,891 $ 477,891 $ 334,172 $ 334,172
(26,399) (a) (13,779) (a)
(1,467) (b) (1,211) (b)
Total costs and expenses $ 440,388 $ (27,866) $ 412,522 $ 356,275 $ (14,990) $ 341,285
26,399 (a) 13,779 (a)
1,467 (b) 1,211 (b)
Income (loss) from operations $ 37,503 $ 27,866 $ 65,369 $ (22,103) $ 14,990 $ (7,113)
13,779 (a)
26,399 (a) 906 (b)
1,103 (b) 2,040 (c)
7,061 (c) (685) (d)
(522) (d) 46,972 (e)
Net income (loss) attributable to Weibo's
ordinary shareholders
$ 34,745 $ 34,041 $ 68,786 $ (65,325) $ 63,012 $ (2,313)
Diluted net income (loss) per share
attributable to Weibo’s ordinary shareholders
$ 0.16 $ 0.32 $ (0.35) $ (0.01)
Shares used in computing diluted
net income (loss) per share attributable
to Weibo’s ordinary shareholders
217,918 217,918 186,878 186,878
Adjusted EBITDA:
Non-GAAP net income (loss) $ 68,786 $ (2,313)
Interest income, net (5,528) (5,494)
Income tax expenses 2,958 1,433
Depreciation expenses 19,482 21,849
Adjusted EBITDA $ 85,698 $ 15,475
(a) To adjust stock-based compensation.
(b) To adjust amortization of intangible assets and tax provision on acquired intangible assets.
(c) To adjust net (gain) on the sale of investments, impairment on investments and dividend (income) from investments.
(d) To adjust Non-GAAP to GAAP reconciling items for the gain (loss) attributable to non-controlling interests.
(e) To adjust the change in fair value of investor option liability.

WEIBO CORPORATION
UNAUDITED ADDITIONAL INFORMATION
(U.S. Dollars in thousands)
Three months ended Twelve months ended
December 31, September 30, December 31,
2015 2014 2015 2015 2014
Net revenues
Advertising and marketing:
Advertising and marketing other than Alibaba$ 81,323 $ 49,957 $ 73,331 $ 258,765 $ 157,195
Alibaba 48,204 38,016 32,530 143,650 107,587
Subtotal 129,527 87,973 105,861 402,415 264,782
Weibo VAS 19,498 17,239 18,873 75,476 69,390
$ 149,025 $ 105,212 $ 124,734 $ 477,891 $ 334,172


Contact: Investor Relations Weibo Corporation Phone: +86 10 5898-3112 Email: ir@staff.weibo.com

Source:Weibo Corporation