WB(WB) - 2023 Q4 - Annual Report

User Engagement and Growth - Weibo's MAUs increased from 573 million in December 2021 to 598 million in December 2023, while average DAUs rose from 249 million to 257 million during the same period, maintaining a DAU to MAU ratio of 43%[700]. - The company plans to enhance user experience and engagement by improving product features and refining its SIG recommendation engine[707]. - Weibo aims to increase monetization through user base growth, improved user engagement, and effective management of advertisement inventory[710]. - Weibo's brand recognition strategy focuses on user scale and engagement, optimizing channel investments to enhance user acquisition efficiency[713]. Financial Performance - Revenues for Weibo were reported at US$2,257.1 million in 2021, US$1,836.3 million in 2022, and US$1,759.8 million in 2023, with net income attributable to shareholders of US$428.3 million, US$85.6 million, and US$342.6 million respectively[703]. - Total net revenues decreased by 4% from US$1,836.3 million in 2022 to US$1,759.8 million in 2023, primarily due to the depreciation of RMB against the U.S. dollar[730]. - Advertising and marketing revenues decreased by 4% from US$1,596.7 million in 2022 to US$1,534.0 million in 2023, with the total number of advertisers dropping from 1.0 million to 0.7 million[731]. - Value-added services revenues decreased by 6% from US$239.7 million in 2022 to US$225.8 million in 2023, mainly due to RMB depreciation[733]. Cost Management - Total costs and expenses decreased by 5% from US$1,355.9 million in 2022 to US$1,286.9 million in 2023[739]. - Cost of revenues decreased by 7% from US$400.6 million in 2022 to US$374.3 million in 2023, attributed to lower labor and bandwidth costs[740]. - Sales and marketing expenses decreased by 3% from US$477.1 million in 2022 to US$461.4 million in 2023[741]. - Product development expenses decreased by 20% from US$415.2 million in 2022 to US$333.6 million in 2023, mainly due to reduced personnel-related expenses[742]. - General and administrative expenses increased by 123% from US$52.8 million in 2022 to US$117.6 million in 2023, largely due to the reversal of compensation costs[743]. Tax and Regulatory Environment - The company is entitled to a preferential tax rate of 15% due to its qualification as a "High and New Technology Enterprise," which will expire in 2025 unless renewed[719]. - Research and development expenses can be claimed at a rate of 200% for tax deductions since January 1, 2023, enhancing the company's investment in innovation[720]. - Weibo's advertising revenues are subject to a cultural business construction fee reduced to 1.5% until December 31, 2024, following a temporary exemption during the COVID-19 pandemic[721]. Cash Flow and Investments - Net cash provided by operating activities was US$672.8 million in 2023, compared to US$564.1 million in 2022[758][765]. - Cash and cash equivalents at the end of 2023 were US$2,584.6 million, down from US$2,690.8 million at the end of 2022[758]. - Net cash used in investing activities in 2023 was US$736.8 million, mainly due to cash paid on long-term investments of US$602.7 million and purchases of bank time deposits and wealth management products totaling US$755.3 million[768]. - Capital expenditures were US$35.1 million in 2021, US$43.1 million in 2022, and US$36.8 million in 2023, indicating ongoing investment to support business growth[776]. Shareholder Returns - A special cash dividend of US$0.85 per ordinary share and ADS was approved in May 2023, totaling US$200.1 million for the year[897]. - A subsequent special cash dividend of US$0.82 per ordinary share and ADS was approved in March 2024, expected to total approximately US$200 million[898]. - For the years ended December 31, 2021 and 2022, dividends to shareholders were nil, indicating a significant increase in 2023[897]. Corporate Governance and Management - The company has the right to seek damages if a duty owed by its directors is breached, reflecting its commitment to corporate governance[833]. - The board of directors consists of seven members, with one female director and six male directors as of March 31, 2024[835]. - The audit committee is composed of two independent directors, Mr. Pochin Christopher Lu and Mr. Pehong Chen, with Mr. Lu serving as the chair[831]. - The compensation committee, chaired by Mr. Pehong Chen, is responsible for reviewing and approving the total compensation packages for executive officers and non-employee directors[832]. Employment and Compensation - The company had 5,268 employees as of December 31, 2023, with the largest function being product development, which accounted for 2,284 employees[836]. - The company paid an aggregate of approximately US$3.9 million in cash and benefits to its executive officers for the year ended December 31, 2023[817]. - The company has not set aside or accrued any amount to provide pension, retirement, or other similar benefits to its executive officers and directors[817]. - The company has entered into employment agreements with its senior executive officers, allowing termination for cause without remuneration[818].