WB(WB) - 2024 Q2 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Weibo's total revenues for Q2 2024 reached $437.9 million, a decrease of 1% year-over-year, but an increase of 1% on a constant currency basis [27][28] - Advertising revenues were$ 375.3 million, reflecting a decrease of 3% year-over-year or 1% on a constant currency basis [28] - Non-GAAP operating income was $157.6 million, representing a non-GAAP operating margin of 36%, a modest increase year-over-year [27][32] - Net income attributable to Weibo was$ 126.3 million, with a net margin of 29%, remaining flat year-over-year [32] Business Line Data and Key Metrics Changes - VAS (Value-Added Services) revenues increased to $62.6 million, a growth of 15% year-over-year or 18% on a constant currency basis, primarily driven by membership services [31] - Mobile ad revenues accounted for approximately 94% of total ad revenue, amounting to$ 352.3 million [28] Market Data and Key Metrics Changes - MAU (Monthly Active Users) reached 583 million, while average DAUs (Daily Active Users) were 256 million, indicating improved user engagement [6][27] - The entertainment sector showed good momentum, driven by popular TV programs, while the FMCG sector faced challenges [29] Company Strategy and Development Direction - The company is focusing on user acquisition and engagement, particularly targeting high-quality users [6][27] - Weibo aims to enhance its monetization competitiveness by leveraging hot trends and IPs, and driving vertical content ecosystems [19][26] - The strategy includes strengthening partnerships with industries such as automotive and digital products to improve content marketing and ad revenue [16][18] Management's Comments on Operating Environment and Future Outlook - Management expressed caution regarding the macroeconomic environment and its impact on advertising demand for the second half of 2024, particularly in first-tier cities [36][37] - There is a noted stability in ad spending from advertisers, despite challenges in certain sectors like cosmetics and beauty [36][39] - The company anticipates a boost in user engagement and ad placements during the Summer Olympics, but expects a slowdown post-event [31] Other Important Information - The company has developed a large language model (LLM) to enhance content production and user interaction, which has received government approval [44][45] - The AI technology is expected to improve content recommendation and user experience on the platform [49] Q&A Session Summary Question: Overall macro outlook and advertising outlook for the second half of the year - Management noted that ad revenue in Q2 was flat year-over-year, with some sectors like cosmetics experiencing a decline, while others showed growth [36] - There are uncertainties regarding macroeconomic developments, particularly in consumption, which may impact ad spending [37][38] Question: Developments in AIGC and its impact on content production - Management highlighted the approval of their LLM and its application in enhancing user interaction and content understanding [44][45] - The AI is expected to improve content recommendations and user experience, with significant user engagement already observed [49]