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 Weibo Reports Third Quarter 2016 Financial Results
   Monday, November 21, 2016 4:30:00 PM ET

Weibo Corporation ("Weibo" or the "Company") (WB ), a leading social media in China, today announced its unaudited financial results for the third quarter ended September 30, 2016.

Third Quarter 2016 Highlights

-- Net revenues increased 42% year over year to $176.9 million, exceeding the Company’s guidance between $168 million and $173 million.

-- Advertising and marketing revenue increased 48% year over year to $156.7 million.

-- Weibo Value-Added Services ("VAS") revenue increased 7% year over year to $20.2 million.

-- Net income attributable to Weibo increased 122% year over year to $32.1 million, and diluted net income per share was $0.14, compared to $0.07 for the same period last year.

-- Non-GAAP net income attributable to Weibo increased 147% year over year to $54.6 million, and non-GAAP diluted net income per share was $0.24, compared to $0.10 for the same period last year.

-- Adjusted EBITDA increased 117% year over year to $57.7 million, reaching an adjusted EBITDA margin of 33%.

-- Monthly active users ("MAUs") in September 2016 grew 34% year over year to 297 million, 89% of which were mobile users. Average daily active users ("DAUs") in September 2016 grew 32% year over year to 132 million.

"Weibo’s key account and SME ad revenue has doubled from last year in constant currency for the third consecutive quarter, as we benefited from our brand, breadth of product offering and ad spending shifting toward mobile, social and video." said Gaofei Wang, Weibo’s CEO. "Our efforts to build a content ecosystem that attracts premium user-generated content and our relentless focus on user experience have led to strong traffic growth. In the third quarter, we also saw strong operating leverage from our platform."

Third Quarter 2016 Financial Results

For the third quarter of 2016, Weibo reported net revenues of $176.9 million, compared to $124.7 million for the same period last year. Advertising and marketing revenue totaled $156.7 million, compared to $105.9 million for the same period last year. Advertising and marketing revenue from key accounts and small & medium-sized enterprises (SME) was $147.4 million, compared to $73.3 million for the same period last year. Revenue from Alibaba was $9.3 million, compared to $32.5 million for the same period last year. Weibo VAS revenue totaled $20.2 million, compared to $18.9 million for the same period last year.

Costs and expenses for the third quarter of 2016 totaled $134.0 million, compared to $110.8 million for the same period last year. Non-GAAP costs and expenses were $122.4 million, compared to $103.2 million for the same period last year. The increase in non-GAAP costs and expenses was primarily due to an increase in marketing expenses, value added taxes and bad debt expenses, with the latter two impacted by higher revenues.

Income from operations for the third quarter of 2016 was $42.9 million, compared to $13.9 million for the same period last year. Non-GAAP income from operations was $54.5 million, compared to $21.5 million for the same period last year.

Non-operating loss for the third quarter of 2016 was $9.2 million, which included investment impairment of $11.1 million. Non-operating income for the same period last year was $1.4 million.

Net income attributable to Weibo for the third quarter of 2016 was $32.1 million, or diluted net income per share of $0.14, compared to $14.5 million for the same period last year, or diluted net income per share of $0.07. Non-GAAP net income attributable to Weibo for the third quarter of 2016 was $54.6 million, or diluted net income per share of $0.24, compared to $22.1 million for the same period last year, or diluted net income per share of $0.10.

As of September 30, 2016, Weibo’s cash, cash equivalents and short-term investments totaled $479.4 million. For the third quarter of 2016, cash provided by operating activities was $89.8 million, capital expenditures totaled $1.3 million, and depreciation and amortization expenses amounted to $3.5 million.

Business Outlook

For the fourth quarter of 2016, Weibo estimates that its net revenues to be between $205 million and $210 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 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, and dividend income, loss attributable to non-controlling interest, and income tax provision related to the amortization of intangible assets. 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 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."

Conference Call

Weibo will host a conference call at 8 PM - 9 PM Eastern Time on November 21, 2016 (or 9 AM - 10 AM Beijing Time on November 22, 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: +1 866-519-4004 Hong Kong Toll Free: 800-906-601 China Toll Free: 400-620-8038 International: +65 6713-5090 Passcode for all regions: 17722600

A replay of the conference call will be available through midnight, Eastern Time on November 28, 2016. The dial-in number is +61 2-8199-0299. The passcode for the replay is 17722600.

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, 2015 filed with the SEC on April 28, 2016 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 5898-3017 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,
                                                   2016                  2015                  2016                  2016                  2015
Net revenues:
Advertising and marketing                          $        156,693      $        105,861      $        127,173      $        383,112      $        272,888
Weibo VAS                                          20,184                18,873                19,712                59,940                55,978
Total net revenues                                 176,877               124,734               146,885               443,052               328,866
Costs and expenses:
Cost of revenues (a)                               44,494                37,241                40,657                121,777               99,855
Sales and marketing (a)                            38,070                30,106                32,166                100,277               89,806
Product development (a)                            39,674                37,493                37,611                114,219               106,830
General and administrative (a)                     11,718                5,996                 9,200                 29,456                20,660
Total costs and expenses                           133,956               110,836               119,634               365,729               317,151
Income from operations                             42,921                13,898                27,251                77,323                11,715
Non-operating income (loss):
Gain on sale of and impairment on investments, net (11,087)              (462)                 (3,440)               (15,395)              146
Interest and other income , net                    1,911                 1,818                 2,411                 5,742                 4,895
                                                   (9,176)               1,356                 (1,029)               (9,653)               5,041
Income before income tax expenses                  33,745                15,254                26,222                67,670                16,756
Income tax expenses                                (1,917)               (1,030)               (1,796)               (4,261)               (1,439)
Net income                                         31,828                14,224                24,426                63,409                15,317
Less: Net loss attributable to                     (274)                 (253)                 (1,431)               (1,648)               (306)
noncontrolling interest
Net income attributable to Weibo                   $           32,102    $           14,477    $           25,857    $           65,057    $           15,623
Basic net income per share attributable to Weibo   $               0.15  $               0.07  $               0.12  $               0.30  $               0.08
Diluted net income per share attributable to Weibo $               0.14  $               0.07  $               0.12  $               0.29  $               0.07
Shares used in computing basic
net income per share attributable to Weibo         215,671               209,356               213,537               213,832               207,287
Shares used in computing diluted
net income per share attributable to Weibo         223,861               217,681               221,611               222,110               217,426
(a) Stock-based compensation in each category:
Cost of revenues                                   $                764  $               380   $                543  $             1,815   $                921
Sales and marketing                                1,784                 924                   900                   3,702                 2,353
Product development                                5,304                 3,028                 2,501                 11,360                7,737
General and administrative                         3,536                 2,917                 3,364                 10,306                8,778
WEIBO CORPORATION
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
                                                                                                                                                                                                               September 30,                                                         December 31,
                                                                                                                                                                                                               2016                                                                  2015
Assets
Current assets:
                                                                                                                                          Cash and cash equivalents                                            $             181,841                                                 $             237,440
                                                                                                                                          Short-term investments                                               297,588                                                               98,439
                                                                                                                                          Accounts receivable, net                                             116,341                                                               120,230
                                                                                                                                          Prepaid expenses and other current assets                            51,970                                                                42,295
                                                                                                                                          Current assets subtotal                                              647,740                                                               498,404
Property and equipment, net                                                                                                                                                                                    19,947                                                                22,850
Goodwill and intangible assets, net                                                                                                                                                                            11,986                                                                13,083
Investments                                                                                                                                                                                                    284,481                                                               294,679
Other assets                                                                                                                                                                                                   7,691                                                                 10,173
Total assets                                                                                                                                                                                                   $             971,845                                                 $             839,189
Liabilities and Shareholders’ Equity
Liabilities:
                                                                     Current liabilities:
                                                                                                                                          Accounts payable *                                                   $               42,061                                                $               40,456
                                                                                                                                          Accrued liabilities *                                                155,446                                                               117,040
                                                                                                                                          Deferred revenues                                                    48,940                                                                39,091
                                                                                                                                          Amount due to SINA                                                   12,434                                                                12,188
                                                                                                                                          Current liabilities subtotal                                         258,881                                                               208,775
                                                                     Long-term liability                                                                                                                       1,925                                                                 2,385
                                                                                                                                          Total liabilities                                                    260,806                                                               211,160
Shareholders’ equity :
                                                                     Weibo shareholders’ equity                                                                                                                706,626                                                               620,672
                                                                     Non-controlling interest                                                                                                                  4,413                                                                 7,357
                                                                                                                                          Total shareholders’ equity                                           711,039                                                               628,029
Total liabilities and shareholders’ equity                                                                                                                                                                     $             971,845                                                 $             839,189
* Commencing on January 1, 2016, in order to enhance comparability with industry peers, payables that have been invoiced or formally agreed with the suppliers were recorded in accounts payable. To conform to current period presentations, the relevant amounts in prior periods have been reclassified from accrued liabilities accordingly. Such reclassification amounted to $37.9 million as of December 31, 2015.
WEIBO CORPORATION
UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS
(In thousands, except per share data)
                                           Three months ended
                                           September 30, 2016                                         September 30, 2015                                           June 30, 2016
                                                                                    Non-GAAP                                                     Non-GAAP                                                     Non-GAAP
                                           Actual            Adjustments            Results           Actual            Adjustments              Results           Actual            Adjustments              Results
Advertising and marketing                  $    156,693                             $    156,693      $    105,861                               $    105,861      $    127,173                               $    127,173
Weibo VAS                                  20,184                                   20,184            18,873                                     18,873            19,712                                     19,712
Net revenues                               $    176,877                             $    176,877      $    124,734                               $    124,734      $    146,885                               $    146,885
                                                             (11,388)      (a)                                          (7,249)         (a)                                          (7,308)         (a)
                                                             (160)         (b)                                          (364)           (b)                                          (161)           (b)
Total costs and expenses                   $    133,956      $    (11,548)          $    122,408      $    110,836      $       (7,613)          $    103,223      $    119,634      $       (7,469)          $    112,165
                                                             11,388        (a)                                          7,249           (a)                                          7,308           (a)
                                                             160           (b)                                          364             (b)                                          161             (b)
Income from operations                     $      42,921     $      11,548          $      54,469     $      13,898     $        7,613           $      21,511     $      27,251     $        7,469           $      34,720
                                                             11,388        (a)                                          7,249           (a)                                          7,308           (a)
                                                             160           (b)                                          364             (b)                                          161             (b)
                                                             11,087        (c)                                          462             (c)                                          3,440           (c)
                                                             (101)         (d)                                          (323)           (d)                                          (1,177)         (d)
                                                             (40)          (e)                                          (91)            (e)                                          (40)            (e)
Net income attributable to Weibo           $      32,102     $      22,494          $      54,596     $      14,477     $        7,661           $      22,138     $      25,857     $        9,692           $      35,549
Diluted net income per share               $           0.14                         $           0.24  $           0.07                           $           0.10  $           0.12                           $           0.16
attributable to Weibo
Shares used in computing  diluted
net income per share attributable to Weibo 223,861                                  223,861           217,681                                    217,681           221,611                                    221,611
Adjusted EBITDA:
Non-GAAP net income                                                                 $      54,596                                                $      22,138                                                $      35,549
Interest income, net                                                                (2,201)                                                      (1,433)                                                      (1,893)
Income tax expenses                                                                 1,957                                                        1,121                                                        1,836
Depreciation expenses                                                               3,312                                                        4,696                                                        3,316
Adjusted EBITDA                                                                     $      57,664                                                $      26,522                                                $      38,808
WEIBO CORPORATION
UNAUDITED RECONCILIATION OF NON-GAAP TO GAAP RESULTS
(In thousands, except per share data)
                                           Nine months ended
                                           September 30, 2016                                         September 30, 2015
                                                                                    Non-GAAP                                                     Non-GAAP
                                           Actual            Adjustments            Results           Actual            Adjustments              Results
Advertising and marketing                  $    383,112                             $    383,112      $    272,888                               $    272,888
Weibo VAS                                  59,940                                   59,940            55,978                                     55,978
Net revenues                               $    443,052                             $    443,052      $    328,866                               $    328,866
                                                             (27,183)      (a)                                          (19,789)        (a)
                                                             (562)         (b)                                          (1,108)         (b)
Total costs and expenses                   $    365,729      $    (27,745)          $    337,984      $    317,151      $    (20,897)            $    296,254
                                                             27,183        (a)                                          19,789          (a)
                                                             562           (b)                                          1,108           (b)
Income from operations                     $      77,323     $      27,745          $    105,068      $      11,715     $      20,897            $      32,612
                                                             27,183        (a)                                          19,789          (a)
                                                             562           (b)                                          1,108           (b)
                                                             15,395        (c)                                          (146)           (c)
                                                             (1,558)       (d)                                          (253)           (d)
                                                             (140)         (e)                                          (276)           (e)
Net income attributable to Weibo           $      65,057     $      41,442          $    106,499      $      15,623     $      20,222            $      35,845
Diluted net income per share               $           0.29                         $           0.48  $           0.07                           $           0.16
attributable to Weibo
Shares used in computing  diluted
net income per share attributable to Weibo 222,110                                  222,110           217,426                                    217,426
Adjusted EBITDA:
Non-GAAP net income                                                                 $    106,499                                                 $      35,845
Interest income, net                                                                (5,394)                                                      (4,376)
Income tax expenses                                                                 4,401                                                        1,716
Depreciation expenses                                                               9,928                                                        15,476
Adjusted EBITDA                                                                     $    115,434                                                 $      48,661
(a)  To adjust stock-based compensation.
(b)  To adjust amortization of intangible assets.
(c)  To adjust net gain on the sale of investments and impairment on investments, and dividend income.
(d)  To adjust loss attributable to non-controlling interests.
(e)  To adjust income tax provision related to item (b). Other non-GAAP to GAAP reconciling items have no income tax effect *
*  Most of the reconciliation items were recorded in entities in tax free jurisdictions hence no income tax implications.
For impairment on investments, full valuation allowances were made due to as the Company does not expect they can be realized in the foreseeable future.
WEIBO CORPORATION
UNAUDITED ADDITIONAL INFORMATION
(In thousands)
                                                  Three months ended                                 Nine months ended
                                                  September 30,                    June 30,          September 30,
                                                  2016            2015             2016              2016            2015
Net revenues
Advertising and marketing
Key accounts and small & medium-sized enterprises $      147,437  $        73,331  $        114,324  $      349,887  $      177,442
Alibaba                                           9,256           32,530           12,849            33,225          95,446
Subtotal                                          156,693         105,861          127,173           383,112         272,888
Weibo VAS                                         20,184          18,873           19,712            59,940          55,978
                                                  $      176,877  $      124,734   $        146,885  $      443,052  $      328,866

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/weibo-reports-third-quarter-2016-financial-results-300366709.html

SOURCE Weibo Corporation

http://rt.prnewswire.com/rt.gif?NewsItemId=CN50740&Transmission_Id=201611211630PR_NEWS_USPR_____CN50740&DateId=20161121



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