On Thursday, Weibo (NASDAQ:WB) discussed first-quarter financial results during its earnings call. The full transcript is provided below.

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The full earnings call is available at https://edge.media-server.com/mmc/p/a2p96r88/

Summary

Weibo reported first quarter 2026 revenues of $421.3 million, an increase of 6% year over year, with ad revenues at $369.8 million, up 9% year over year.

The company experienced a modest decline in monthly active users (MAUs) but saw daily active users (DAUs) grow slightly due to enhanced user retention strategies and increased video content consumption.

Strategic initiatives focused on optimizing the information feed product, enhancing video content, and leveraging AI for ad targeting and content creation, contributing to improved engagement and monetization.

The company highlighted growth in advertising revenues from Internet services, automobiles, and local services, while facing challenges in sectors like FMCG and online gaming.

Management expressed optimism about the future, expecting continued investment in AI and content ecosystem initiatives to drive long-term growth, despite some industry headwinds.

Full Transcript

OPERATOR

Joining me today, our Chief Executive Officer Kofi Wang and our Chief Financial Officer Gui Tao. The conference call is also being broadcast on the Internet and is available through Weibo's IR website. Before the management remarks, I would like to read you the Safe harbor statement in connection with today's conference call. During today's conference call we may make forward looking statements, statements that have non-historical facts including statements of our beliefs and expectations. Forward looking statements involving risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward looking statement. Weibo assumes no obligation to update the forward looking statement in this conference call and elsewhere. Further information regarding this and other risks is included in Weibo's Annual Report on Form 20F and other filings with the SEC. All the information provided in this press release is occurring as a date here. Weibo assumes no obligation to update such information except as required under applicable law. Additionally, I would like to remind you that our discussion today includes certain non GAAP measures which include stock-based compensation and certain other expenses. We use non GAAP financial measures to gain a better understanding of Weibo's comparative operating performance and future prospects. Our non GAAP financials exclude certain expenses, gains or losses and other items that are not expected to result in future cash flows or are of a non-recurring nature or are not indicative of our core operating result and outlook. Please refer to our press release for more information about our non GAAP measures. I know you mentioned prepared remarks. We open the line to a brief Q and A session with this. I'd like to turn the call over to to our CEO Kofi Wang.

Kofi Wang (Chief Executive Officer)

Thank you. Hello everyone. Welcome to Weibo's first quarter 2026 earnings conference call earnings conference. On today's call, I'll share with you highlights on Weibo's product monetization in the first quarter 2020. Shanghai. On the user front in March 2026 Weibo's MAUs were 562 million and average DAUs reached 254 million. Our MEUs experienced a modest decline on both a year over year and a quarter by quarter basis. This was primarily driven by our strategic focus on enhancing user experience and driving user retention. We have proactively rationalized our channel budget allocation, shifting our focus towards improving the conversion rate of newly acquired users into active users. Concurrently driven by a recent effort to optimize information free product experience for our core users which includes engaged users and click oriented users. Coupled with the sustained growth in video content consumption on the platform, the scale and engagement frequency of our core users have maintained a solid trend as A result, our DAUs achieved modest growth quarter over quarter. Our total first quarter revenue reached US$421.3 million, an increase of 6% year over year. Our total ad revenues reached US$369.8 million, an increase of 9% year over year. Our non GAAP operating income is going to reach US$119.8 million, representing a non GAAP operating margin of 28%. Next I will highlight we will see development in the first quarter across user growth and engagement, content ecosystem competitiveness and monetization. On user growth and engagement in 2026, we will focus on improving user retention and building a high quality, highly engaged and sustainable user growth framework. In the first, the information CPU remained in optimization stage post the product upgrade. Last year, the related strategies began to deliver positive results starting in March with content consumption and interactive measures among our poor users beginning to improve and meanwhile the sustained growth in timestamp on our video playback pages has served as a more solid foundation for the growth of our overall user time spent and retention. Moving on to Information Feed product in 2026, the strategy focuses on the product optimization after the information feed upgrade which aligns with our long term direction. Building on Weibo's strength in social network and hard chain discussion will further enhance the distribution capabilities of Weibo's distinctive native content, establish a more stable and consistent content consumption experience and continue to strengthen users trust in the information feed.

Gaussian Wang

Specifically, in the first quarter we focused on a series of optimization initiatives aimed at balancing the distribution of social content, trending topics and vertical interest based content for Weibo's engage the core users while ensuring their consumption of social content. We also prioritize improving recommendation efficiency for trending and interest based content. Meanwhile, we further strengthen the distribution of content from authentic accounts, high quality original content and reposted content while stepping up governance over low quality and overly promotional content to enhance the consumption experience within our information feeds. These strategies were gradually rolled out throughout the first quarter and began to make positive impacts in March. Looking at the preliminary results, the skill, time spent and engagement modeling of the socially engaged users within our information feed have all shown month over month improvement demonstrating that our strategy is more effective in retaining and sharing business specific use cohort. This preliminary result has boosted our confidence to further advance optimization of information feed product in the second quarter. Building upon the experience improvement for our socially engaged users, we have placed greater focus on user groups that rely more heavily on the recommendation fees and have higher expectations for content matching efficiency through the continued optimization of product strategies and content matching algorithms. We aim to improve the seamless content consumption for these users within the recommendation feed and further strengthen Weibo's competitiveness in recommendation driven content consumption scenarios. Moving on to Video Our video business is set to serve as a crucial driver for increasing user time spent and retention throughout 2026. In the first quarter, we continue with the proven path established in the second half of 2025 and so continued improvement of video consumption during the first quarter Total time spent on the video playback pages achieved double digit year over year growth while also maintaining an upward trend quarter over quarter. Notably, the growth in per capita timestamp on video playback pages was even more pronounced. Specifically during the first quarter, Video based business initiatives center around two key aspects, distribution and supply. On the distribution side, we continue to optimize the recommendation conversion efficiency for videos across core scenarios such as information feed and trending feeds. At the same time, we reduce the distribution weight of repetitive low quality and excessively commercialized content. This ensures that the growth in video watch time is increasingly driven by high quality content and the rise in users meaningful viewing behaviors. On the supply side, we further strengthen the supply of high quality video content by investing more resources to attract high quality video content creators incentivize their content production. This includes celebrity and top-tier live vlogs, trending topic analysis and derivative creation of popular content, all of which are distinctive to our platforms and strategically skewed our traffic distribution toward these high quality offerings. In the first quarter, both the number of top tier accounts e.g. the Golden and Orange verified accounts publishing original videos and the number of original videos post recorded double digit year over year growth. Meanwhile, we are also exploring and validating the introduction of more diverse video content formats such as short plays and video podcasts. In the first quarter, leveraging the continued iteration of our video AI large models, we further built on the platform strength in vertical integration by opening up AI creation tools to the creators, enabling them to produce derivative video content and expand IP related content. As of April, we have made copyright materials available from over 20 top tier TV drama and variety show IPs on the platform and have actively collaborated with partners to launch AI driven content recreation initiatives which have attracted nearly 3,000 creators and generated nearly 8,000 pieces of AI content created. Meanwhile, we further enhanced Weibo's AI creation platform by providing creators with resources such as graphic text generation tools, trending topic creation tools, video generation capabilities, copyright material and campaign templates. This empowers creators with richer materials and inspiration allowing them to translate their content expertise and creative ideas into publishable videos and text based posts at a significantly lower cost. This in turn has helped improve content production efficiency for Weibo creators. Moving on to Content ecosystem competitiveness throughout 2026 we will continue to focus on our three core business trending topics, social network and search while further enhancing the health and core competitiveness of our content ecosystem. In the first quarter our focus within the content ecosystem was on enhancing the quality of trending topic consumption, deepening community interactions and advancing our AI search capabilities. Through these efforts we aim to significantly improve users content consumption efficiency and their overall engagement experience on the platform. With respect to hot trends in the first quarter we focus on strengthening the influence and credibility of our trending list. We optimized the ranking mechanism, improved the quality of content presented on the list and enriched the content supply and discussion atmosphere on the landing pages. These efforts drove higher content consumption and more vibrant discussion under the hot trend scenarios. Compared with the fourth quarter last year, both average timestamp and average discussion volume per user under the hot trend scenarios increased in the first quarter. The strengthened thickness of user engagement around Houchran further reinforced Wayward's competitive position as a go to platform for how trend discovery and public discussion. On social attributes. In 2026 we aim to deepen user engagement and increase revisit intention within interest based communities, leveraging richer community engagement features and stronger interaction mechanisms. In the first quarter the super topics community continued to enhance its product capabilities and standardized event based operations across categories such as celebrities, IPs and sports events which sustainably drove user engagement. As a result, both DAUs and engaged users of Supertopics recorded year over year growth with AI further integrated into product development efficiency and content understanding. We will continue to center on core needs of users of community products, accelerating iteration of interactive community products and features and thereby further improving users social fulfillment and sense of belonging on Weibo. On search products as we continue to enhance our AI capabilities in the first quarter we have upgraded our Weibo intelligence search function from a single-turn Q&A to a summary one into an AI powered multi turn follow up queries and can understand multimodal content including videos and image with text. Meanwhile, we integrated AI agent capabilities into key scenarios such as public figure search and hardtrend search and conducted product on search landing pages and comment sections. Leveraging AI agent capabilities will enhance the user search experience and efficiency and further reinforce the Weibo's differentiated value proposition in the search market. Moving on to monetization. We have continued to execute on two key strategies that have underpinned our ad product and sales team since 2025 first, driving broader adoption of Weibo's unique content marketing value across more industries and clients and second, systematically improving ad conversion effectiveness by leveraging AI capabilities. In the first quarter, Weibo's ad revenues increased 9% year over year. Overall, Weibo will continue to leverage its differentiated strength in hot trends social content marketing across proven marketing scenarios such as new product launches, Chinese New Year campaigns, sports events and celebrity marketing leading to growth across multiple key industries. By industry the main growth contributors in the first quarter were verticals such as Internet service, local service and automobiles. The Internet service sector delivered robust year over year growth primarily driven by incremental budget we captured from the Internet service companies. For example, during the Chinese New Year period, various AI large language model players ramp up their marketing investment, leveraging Weibo's strong KOL ecosystem, and professional discussion environment in the digital and technology verticals, we effectively fulfilled AI companies marketing need in areas such as new product launches, technology education and word of mouth building which resulted in a notable increase in related marketing revenues. We believe that as AI technologies and applications continue to evolve, AI related content will become a major incremental driver of Weibo's content ecosystem.. In May, the number of AI focused professional content creators, the average daily number of AI related hot trends and the discussion volume of AI content on Weibo both increased more than 30% compared with January this year. This technological transformation in AI has been continuously stimulating content creation and user discussion on our platform and will further build a flywheel between content ecosystem enrichment and monetization growth. The local service sector was also among the fast-growing sector in the first quarter, supported by ongoing competition in the food delivery as well as seasonal boost from the Chinese New Year holiday. The automobile sector delivered double digit year over year growth primarily driven by favorable policies and new vehicle launches. Relatively stable ad spend around new product launches, user reputation building and brand awareness. The handset sector recording modest year over year growth in the first quarter. But looking ahead, market competition in the sector continues to intensify despite ongoing support from trading subsidies. Rising chip and memory cost continue to put pressure on handset manufacturers profitability which may weigh on their ad budget going forward. We will closely track new product launch cycles and the client's budget dynamics and optimize our sales strategy accordingly to ensure solid coverage of key clients. Among other verticals, the apparel and footwear sector achieved double digit year over year growth in the first quarter primarily fueled by the Winter Olympics, concentrated marketing campaigns by sports and outdoor brands and celebrity endorsement activities through which advertisers effectively leverage events and celebrity moments to boost the brand awareness. As mentioned last quarter, we have seen a recovery trend in demand for celebrities and IT-based account marketing from certain brand advertisers in the first quarter. This trend continued to play out in a number of key industries and campaigns with related revenues maintaining solid year-over year growth and providing a meaningful supplement to our overall content marketing business. Celebrity marketing has always been a distinctive component of webull's content marketing capabilities. Over the past quarter we focused more on enhancing service stats and ad placement efficiency for clients in this area. Based on clients brand objectives, budget levels and target audience, we integrated Weibo resources in hot trends, IPs, celebrities and KOL ecosystems to provide more tailored resource matching, content planning and campaign execution services. This initiative enable clients to effectively achieve brand exposure and user engagement. While our products and service capabilities are still being further refined, we have already seen encouraging execution results and client feedback in some of the pilot projects. Looking forward, we will continue to advance our celebrity and IP content marketing services, positioning them as a key component to deepen collaboration with brand advertisers and enhance our content marketing competitiveness while driving greater synergy with our overall ad product portfolio. With that, let me turn the call over to Feitao for financial review.

Feitao

Thank you golfing and hello everyone. Welcome to Weibo's first quarter 2026 earnings conference call. Let's start with user metrics. In March 2026, Weibo's MAUs and average DUs reached 552 million and 254 million respectively. During the first quarter we continued to focus on user quality, retention and engagement. Maus saw a modest sequential decline, mainly reflecting our ongoing rationalization of channel investment and the transition following our information feed revamp. At the same time, DUS remained resilient and improved slightly quarter over quarter. Supported by better retention of core users, continued optimization of the homepage feed experience and improving video consumption. AI continued to serve as an important enabler across our product content and monetization systems. On the monetization set, AI powered targeting, bidding and ad creative generation continued to support promoted fees and real time bidding ad products. Internally, we are also expanding the use of AI tools to improve execution efficiency across product operations and sales teams. Turning to financials as a reminder, my prepared remarks would focus on non-GAAP results. Monetary amounts are in US dollar term and all comparisons are on a year over year basis unless otherwise noted. Now let me walk you through our financial highlights for the first quarter 2026. Weibo's first quarter 2026 net revenues were US$421.3 million, an increase of 6% or 1% on a constant currency basis. Operating income was US$119.8 million representing operating margin of 28%. Net income attributable to Weibo reached US$91.9 million and diluted EPS was US$0.34 US$. Let me give you more color on the first quarter 2026 revenue performance we started the year with our advertising business returning to year over year growth supported by improving demand from selected verticals and continued execution in content marketing and performance based ad products. We both advertising and marketing revenues for the first quarter 2026 was US$369.8 million, an increase of 9% or 3% on a constant currency basis by industry. Our largest three verticals were FMCG, E commerce and 3C products. In terms of growth, Internet services, automobile and local services were the major contributors. Advertising revenues from Internet companies increased primarily due to incremental advertising spend from leading players in the sector. The automobile sector also saw substantial growth supported by auto related content ecosystem and ad spend from electric vehicles. For Hyundai sector advertising revenues recorded modest growth, but we remain mindful that their marketing budgets may face pressure amid intensified competition with the Hang Sen market as well as rising component costs. As for areas facing headwinds, FMCG continued to face a year over year gap although we saw sequential recovery as certain advertisers resumed spending in celebrity and KOL marketing campaigns. The online game sector was still on a descending trend due to lack of blockbuster release this quarter by ad product promoted fees ad was the largest followed by social display and search and topic promoted feeds delivered solid growth benefiting from better ad matching in revamped information feed, continued demand for Weibos, differentiated IP and content marketing solutions, and deeper AI integration in targeting, bidding and creative generation. These product improvements helped advertisers combined brand exposure with more measurable conversion objectives. Ad revenues from Alibaba for the fourth quarter were US$43.3 million, an increase of 2% year over year or a decrease of 4% on a constant currency basis. The modest decline of revenues from Alibaba was primarily due to high base last year, which included the burn off revenues from promotional ad budget for Alibaba's sponsorship of Spring Festival in 2025 and AI related budget in the first quarter last year expand from Alibaba highly correlated to its own marketing strategies, which may fluctuate with Alibaba's campaign priorities and product launch schedule, etc. Value added service revenues were US$51.6 million in the first quarter, a decrease of 11% or 15% on a constant currency basis. The decrease was primarily attributable to decline in game related revenue. Turning to Cost and expenses, total cost and expenses for the first quarter were US$301.5 million, an increase of 13% mainly due to higher ad production cost and marketing spends, partially offset by the decrease of general and administrative expenses. During the quarter, we continued to make major investments in selected monetization related initiatives primarily around advertising, product capabilities, content marketing ecosystem and client service offerings. We will continue to manage the pace of these investments with ROI discipline and within a controllable budget framework. Operating income in the fourth quarter was US$119.8 million representing operating margin of 28% compared to 33% in the same period last year. While operating margin declined year over year due to these investments, we remain focused on balancing near term execution needs with sustainable profitability and healthy cash flow generation. Turning to income tax under GAAP, income tax expenses for the first quarter were US$15.7 million compared to US$24.3 million last year, mainly due to decrease in deferred tax liability related to equity pickup adjustment. Net income attributable to weibo in the first quarter was US$91.9 million representing a net margin of 22%. Turning to our balance sheet and cash flow Items, as of March 31, 2026, Weibo's cash, cash equivalents and short term investments totaled US$2.59 billion compared to US$2.41 billion as of December 31, 2025. In the first quarter, cash provided by operating activities was 164 million, capital expenditures totaled US$11.9 million and the depreciation and amortization expenses amounted to US$15.5 million. Let me share some color on our shareholder returns. We have completed the distribution of the annual cash dividend of US$0.31 for ordinary share or ADS for the fiscal year 2025 with aggregate amount of approximately US$150 million in May 2026. We will continue to take a disciplined approach to capital allocation. balancing shareholder returns with the financial flexibility needed to fund our long term product AI and the content ecosystem initiatives. Overall first quarter was a quarter of continued transition and steady execution while macro consumption sentiment and industry competition remain uncertain. With the initial signs of stabilization in core user engagement and advertising demand. We will continue to balance investment needs with operating efficiency and healthy cash flow generation as we build a more sustainable foundation for long term development. Before turning to the Q and A session, let me provide you a brief update on ESG front In April, we published our fifth ESG report highlighting our efforts across social value, tech empowerment, information security, development, content ecosystem and grain operations. MSCI also recently upgraded our ESG rating from a BB to aa, recognizing our progress in sustainability, innovation and social responsibility. Please visit our IR website for more information. With that, let me now turn the call over to the operator for the Q and A session.

OPERATOR

Thank you so much. Dear participants, As a reminder, if you wish to ask a question, please press star 11 on your telephone keypad and wait for your name to be announced. To withdraw a question, please press Star one and one again, please stand by. We'll compile the Q&A roster. This will take a few moments. Once again, if you would like to ask a question, please press Star one one and now we're going to take our first question and it comes line of Thomas Chong from Jeffries. Your line is open. Please ask your question.

Thomas Chong (Equity Analyst)

Hi, good evening. Thanks management for taking my questions. Based on the trend so far we see in Q1 and recent months, can management comment about Weibo advertising outlook in Q2? In addition, can management also comment about our advertising strategies? Any updates for the full year and separate today on AI, can management share about how it benefits advertising and monetization? Thank you.

OPERATOR

Thank you. Now we're going to take our next question. Just give us a moment. And the question comes Line of Jenny Yuan from ubs, your line is open. Please ask a question.

Jenny Yuan

So thanks management for taking my question. Could you please share some updates on the impact of the state revamp on user growth? Last quarter we highlighted video strategy as a key focus for this year. Could you please provide an update on the progress so far as well as the key priorities and targets for the next phase. And lastly, could you please also share recent developments on the AI front in terms of user facing Codex. Thank you,

OPERATOR

Thank you. Dear participants, due to time constraints of today's call, we will not be addressing any further questions. Thank you very much for your participation. You may now all disconnect. Have a nice day.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.

Weibo Q1 2026 Earnings Call: Complete Transcript