Release Date: November 19, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Weibo Corp (WB, Financial) reported a 5% year-over-year increase in total revenue for Q3 2024, reaching USD464.5 million.
- The company's ad revenue grew by 2% year-over-year, driven by Olympic-related hot trends and strong momentum in value-added services.
- Weibo's MAU reached approximately 587 million, with DAUs at 257 million, reflecting successful user acquisition and engagement strategies.
- The value-added services (VAS) segment saw a 25% increase in revenue, primarily due to growth in membership and game-related services.
- Weibo's non-GAAP operating income was USD164.5 million, with a non-GAAP operating margin of 35%, indicating strong operational efficiency.
Negative Points
- Despite revenue growth, Weibo Corp (WB) faced a sluggish consumer environment, impacting client marketing demand.
- Ad revenue from the handset industry declined year-over-year due to the product launch pipeline in Q3.
- The cosmetics and personal care industry underperformed, dragging down overall FMCG growth.
- Net income attributable to Weibo's shareholders increased by only 2%, with a slight decrease in net margin from 31% to 30% year-over-year.
- The company anticipates continued uncertainties and does not expect a V-shaped recovery in the advertising market despite government stimulus measures.
Q & A Highlights
Q: In light of recent macro stimulus, how does management see these policies impacting advertisement outlook in Q4, and could you share more details by industry verticals?
A: Gaofei Wang, CEO: In Q3, ad revenue increased due to hot trends like the Olympics. For Q4, while we see optimism from government policies boosting domestic demand, recovery in luxury products and real estate remains challenging. However, we expect double-digit growth in 3C products and consumer electronics due to national subsidies. Weibo's focus on hot trend marketing, such as the Paris Olympics, has driven growth in food, beverage, apparel, and automotive sectors. Advertisers are shifting budgets from traditional TV to social media, benefiting Weibo.
Q: What are the drivers behind the growth in the VAS services segment, and what are the expectations for Q4 and future monetization strategies?
A: Gaofei Wang, CEO: VAS growth is driven by membership business revenue, focusing on high-quality user acquisition and engagement. New products like SVIP have enhanced social rights and interests, boosting conversion efficiency. VAS for key accounts in finance and education sectors has enriched the content ecosystem. We expect high growth in VAS revenue in Q4.
Q: Can management provide updates on AI progress in content production, commercialization, and operational efficiencies?
A: Gaofei Wang, CEO: Weibo's AI applications have improved efficiency and operations. In Q3, AI-based intelligent search functions led to a 10% growth in DAUs and traffic. The AI assistant for content generation has seen high retention rates. AI is also used in product and technological R&D, with further efficiency improvements expected in coding and programming.
Q: How did the Olympic-related hot trends impact Weibo's ad revenue and client engagement?
A: Gaofei Wang, CEO: The Paris Olympics significantly boosted ad revenue, surpassing the Tokyo Olympics. We saw increased client engagement, especially in food and beverage, apparel, and automotive sectors. Weibo's hot trend marketing strategy attracted more clients and revenue, with a shift in advertiser budgets from traditional channels to social media.
Q: What are the expectations for the advertising market in the fourth quarter, considering the current economic environment?
A: Fei Cao, CFO: Despite uncertainties, we are cautiously optimistic about the advertising market. Government stimulus measures and upcoming shopping festivals may boost consumption sentiment. We aim to enhance monetization efficiency and capture incremental ad volume, focusing on Weibo's unique value proposition in hot trend and content marketing.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
