Weibo Reports Fiscal Year 2021 Unaudited Financial Results

Weibo Corporation (“Weibo” or the “Company”) (NASDAQ: WB and HKEX: 9898), a leading social media in China, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2021.

“We closed 2021 on a solid note with decent growth of the fourth quarter, with strong execution of our growth strategies,” said Gaofei Wang, CEO of Weibo. “In 2021, we have achieved solid growth of user community and engagement, leveraging Weibo’s unique advantage and competitiveness in the social media sector. On monetization, we surpassed the $2 billion mark in revenues for 2021 and further enhanced our operation efficiency, demonstrating strong recovery momentum and resilience of our business. Heading into 2022, we are dedicated to serving a broader community through enhancement of product functionalities and enrichment of content ecosystem, and driving value for customers to market efficiently and innovatively on our platform.”

Fourth Quarter 2021 Highlights

• Net revenues were $616.3 million, an increase of 20% year-over-year or an increase of 16% year-over-year on a constant currency basis^[1].
• Advertising and marketing revenues were $550.8 million, an increase of 21% year-over-year.
• Value-added service (“VAS”) revenues were $65.5 million, an increase of 9% year-over-year.
• Income from operations was $182.5 million, representing an operating margin of 30%.
• Net income attributable to Weibo was $115.7 million and diluted net income per share was $0.50.
• Non-GAAP income from operations was $219.8 million, representing a non-GAAP operating margin of 36%.
• Non-GAAP net income attributable to Weibo was $195.5 million and non-GAAP diluted net income per share was $0.83.
• Monthly active users (“MAUs”) were 573 million in December 2021, a net addition of approximately 52 million users on year-over-year basis. Mobile MAUs represented 95% of MAUs.
• Average daily active users (“DAUs”) were 249 million in December 2021, a net addition of approximately 25 million users on year-over-year basis.

Fiscal Year 2021 Highlights

• Net revenues were $2.26 billion, an increase of 34% year-over-year or an increase of 25% year-over-year on a constant currency basis^[2].
• Advertising and marketing revenues were $1.98 billion, an increase of 33% year-over-year.
• VAS revenues were $276.3 million, an increase of 36% year-over-year.
• Income from operations was $697.4 million, representing an operating margin of 31%.
• Net income attributable to Weibo was $428.3 million and diluted net income per share was $1.86.
• Non-GAAP income from operations was $829.2 million, representing a non-GAAP operating margin of 37%.
• Non-GAAP net income attributable to Weibo was $718.5 million and non-GAAP diluted net income per share was $3.08.

Fourth Quarter 2021 Financial Results

For the fourth quarter of 2021, Weibo’s total net revenues were $616.3 million, an increase of 20% compared to $513.4 million for the same period last year.

Advertising and marketing revenues for the fourth quarter of 2021 were $550.8 million, an increase of 21% compared to $453.5 million for the same period last year. Advertising and marketing revenues excluding ad revenues from Alibaba were $505.3 million, an increase of 28% compared to $393.9 million for the same period last year, primarily driven by solid growth of advertising spending from customers in most key industries.

VAS revenues for the fourth quarter of 2021 were $65.5 million, an increase of 9% year-over-year compared to $59.9 million for the same period last year.

Costs and expenses for the fourth quarter of 2021 totaled $433.8 million, an increase of 31% compared to $331.8 million for the same period last year. The increase was primarily due to higher personnel-related costs and incremental ad costs associated with seasonal ad campaigns execution.

Income from operations for the fourth quarter of 2021 was $182.5 million, compared to $181.6 million for the same period last year. Non-GAAP income from operations was $219.8 million, compared to $204.1 million for the same period last year.

Non-operating loss for the fourth quarter of 2021 was $36.8 million, compared to a loss of $175.8 million for the same period last year. Non-operating loss for the fourth quarter of 2021 mainly included (i) a $39.7 million net loss from fair value change of investments, which is excluded under non-GAAP measures; (ii) a $4.2 million investment related impairment, which is excluded under non-GAAP measures; and (iii) a $5.2 million net interest and other income.

Income tax expense were $45.6 million, compared to income tax benefits of $25.3 million for the same period last year. The increase of income tax expenses was primarily resulted from tax benefits booked in the fourth quarter of 2020 due to preferential tax treatment enjoyed by a PRC subsidiary of the Company as a Key Software Enterprise (“KSE”), which lapsed in 2021, and super deduction true-up for eligible R&D expenses in the fourth quarter of 2020.

Net income attributable to Weibo for the fourth quarter of 2021 was $115.7 million, compared to $29.0 million for the same period last year. Diluted net income per share attributable to Weibo for the fourth quarter of 2021 was $0.50, compared to $0.13 for the same period last year. Non-GAAP net income attributable to Weibo for the fourth quarter of 2021 was $195.5 million, compared to $212.7 million for the same period last year. Non-GAAP diluted net income per share attributable to Weibo for the fourth quarter of 2021 was $0.83, compared to $0.92 for the same period last year.

As of December 31, 2021, Weibo’s cash, cash equivalents and short-term investments totaled $3.13 billion. For the fourth quarter of 2021, cash provided by operating activities was $249.7 million, capital expenditures totaled $11.3 million, and depreciation and amortization expenses amounted to $14.8 million.

Fiscal Year 2021 Financial Results

For fiscal year 2021, Weibo’s total net revenues were $2.26 billion, an increase of 34% compared to $1.69 billion in 2020.

Advertising and marketing revenues for 2021 were $1.98 billion, an increase of 33% compared to $1.49 billion in 2020. Advertising and marketing revenues excluding ad revenues from Alibaba were $1.84 billion, an increase of 38% compared to $1.33 billion for 2020. The strong momentum of our ad business in 2021 was mainly attributable to (i) relatively resilient ad demand from our customers in the key industries amid macro and regulatory headwinds; (ii) stronger sales capability and execution of our team to drive value for our clients; and (iii) solid recovery of our advertising business post the Covid-19 pandemic outbreak in 2020.

VAS revenues for 2021 were $276.3 million, an increase of 36% compared to $203.8 million for 2020. The increase was primarily resulted from incremental revenue contribution from the interactive entertainment company acquired and consolidated to the Company in November 2020 and other online gaming revenues, and was partially offset by the decrease of revenues from live streaming business.

Costs and expenses for 2021 totaled $1.56 billion, compared to $1.18 billion for 2020. The increase was primarily due to higher personnel-related cost and increased marketing spend.

Income from operations for 2021 was $697.4 million, compared to $506.8 million for 2020. Operating margin for 2021 was 31%, compared to 30% last year. Non-GAAP income from operations was $829.2 million, compared to $579.6 million for 2020. Non-GAAP operating margin was 37%, compared to 34% last year.

Non-operating loss for 2021 was $146.7 million, compared to a loss of $130.9 million for 2020. Non-operating loss in 2021 mainly included (i) a $106.8 million investment related impairment, including a $75.3 million impairment on the investment in Yixia Tech Co., Ltd, which is excluded under non-GAAP measures; (ii) a $72.8 million net loss from fair value change of investments, which is excluded under non-GAAP measures; and (iii) a $29.7 million net interest and other income.

Income tax expenses for 2021 were $138.8 million, compared to $61.3 million for 2020. The increase was mainly resulted from (i) higher profits in 2021 versus 2020; (ii) tax benefits booked in 2020 due to preferential tax treatment enjoyed by a PRC subsidiary of the Company as a KSE, which lapsed in 2021; and (iii) tax liability recognized in 2021 related to uncertain tax positions.

Net income attributable to Weibo for 2021 was $428.3 million, compared to $313.4 million for 2020. Diluted net income per share attributable to Weibo for 2021 was $1.86, compared to $1.38 for 2020. Non-GAAP net income attributable to Weibo for 2021 was $718.5 million, compared to $547.5 million for 2020. Non-GAAP diluted net income per share attributable to Weibo for 2021 was $3.08, compared to $2.38 for 2020.

For fiscal year 2021, cash provided by operating activities was $814.0 million, capital expenditures totaled $35.1 million, and depreciation and amortization expenses amounted to $55.0 million.

Secondary Listing in Hong Kong

On December 8, 2021, Weibo successfully listed on the Main Board of the Hong Kong Stock Exchange under the stock code “9898” through a global offering of 11,000,000 Class A ordinary shares. The gross proceeds totaled HK$1,500.4 million, before deducting underwriting fees and other offering expenses.

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