Categories Earnings Call Transcripts, Other Industries

Weibo Corporation (WB) Q4 2021 Earnings Call Transcript

WB Earnings Call - Final Transcript

Weibo Corporation  (NASDAQ: WB) Q4 2021 earnings call dated Mar. 03, 2022

Corporate Participants:

Gaofei Wang — Chief Executive Officer

Fei Cao — Chief Financial Officer

Analysts:

Alicia Yap — Citigroup — Analyst

Miranda Zhuang — Bank of America — Analyst

Presentation:

Operator

Good day and thank you for standing by. Welcome to Weibo Corporation’s Fourth Quarter and Fiscal Year 2021 Earnings Conference Call. [Operator Instructions] After the speakers’ presentation, there will be a question-and-answer session. Please be advised that today’s conference is being recorded [Operator Instructions] And now I’d like to turn the call over to the management team of Weibo Corporation. Thank you. Please go ahead.

Unidentified Speaker —

Thank you operator and welcome to Weibo’s fourth quarter and fiscal year 2021 Earnings Conference Call. During me today are Chief Executive Officer, Gaofei Wang; and our Chief Financial Officer, Fei Cao. The conference call is also being broadcast on 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 are not historical facts including statements of our beliefs and expectations. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statements. We will assume no obligation to update the forward-looking statements in this conference call and elsewhere.

Further information regarding these and other risks is included in Weibo’s Annual Report on Form 20-F and other filings with the SEC. All the information provided in this press release is occurring as of the date hereof. We will assume 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 excludes 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 payments or are non-recurring in nature or not indicative of our core operating results and outlook. Please refer to our press release for more information about our non-GAAP measures.

Following management prepared remarks, we will open up the lines for a brief Q&A session. With this, I would like to turn the call over to our CEO, Gaofei Wang.

Gaofei Wang — Chief Executive Officer

[Foreign Speech] Thank you. Hello everyone, and welcome to Weibo’s fourth quarter 2021 earnings conference call. On today’s call, I will share with you highlights in Weibo’s user product and monetization, review the progress made in 2021 and elaborate our strategies for 2022. Let me start with our fourth quarter financial results. In the fourth quarter, we achieved solid revenue growth on both annual and quarterly basis mainly attributable to our enhanced the sales capability on key advertising industries as well as our efforts to further improve our monetization efficiency despite macro and industry headwinds on the advertising business. Our total revenue reached $616.3 million in the fourth quarter, an increase of 20% year-over-year. Advertising and marketing revenues reached $550.8 million, an increase of 21% year-over-year with 94% of our ad revenue coming from mobile. In the fourth quarter, non-GAAP operating income reached $219.8 million representing a non-GAAP operating margin of 36%. For full year 2021, Weibo’s total revenues reached $2.26 billion, an increase of 34% year-over-year. Advertising and marketing revenues were $1.98 billion, an increase of 33% year-over-year. Non-GAAP operating income reached $829.9 million, an increase of 43% year-over-year representing a non-GAAP operating margin of 37%.

On user front, Weibo’s MAU reached 573 million and average daily use reached 249 million in December 2021, an increase of 10% and 11% year-over-year respectively, 95% of Weibo’s MAU came from mobile. As we review 2021, we would navigate through industry changes and delivered solid results on user growth product and monetization leveraging our core positioning as a social media platform and deeply edge any market competitiveness. On product front, we’ve sharpened our edge in core functions like hot trend and social attributes coupled with effective channel investments. We achieved double-digit percentage growth of our user base year-over-year exceeding the peak level we achieved the during COVID-19 outbreak in 2020. Our monetization, our revenues reached $2.26 billion, up 34% year-over-year representing a strong rebound from 2020. We further increased Weibo’s share of wallet in the advertising market this year mainly attributable to traffic growth, ad efficiency improvement, stronger sales capability in key vertical as well as more competitive ad product metric. Next, let me share with you our progress made in product and monetization in the fourth quarter and lay out our key initiatives for 2022. In the fourth quarter of 2021 on product operation we focus on improving Weibo’s monetization efficiency by strengthening our competitiveness in core features such as hot trend and social attributes coupled with effective channel investment. We delivered solid user growth and deepened user engagement which in turn improve the monetization efficiency. On channel investment in the fourth quarter, we continue to leverage Weibo’s advantage in user acquisition cost and kept focusing on improving user frequency. While maintaining the number of users acquired our channel strategy has tilt towards the channels that could effective drive use of frequency and the scale of targeted users. Consequently, the number of users acquired from channel collaboration with smartphone manufacturers and operators continue to grow. And meanwhile we further improve our product offerings to better serve users acquired through channels. On the one hand, we optimized our content quality and distribution capability of interest-based video feed to improve user experience and frequency to consume content. On the other hand, we enhanced our capability to accurately identify channel user’s interest and the characteristics and tailor product strategy to gradually lead user to shift toward community-based products such as Super Topic while enhancing user’s content consumption aiming to cultivate the mindset of using Weibo and thus improve their willingness to proactively visit us and increase onboard frequency.

Turning to social attributes, in Q4 we continue to enhance social functions of our products aiming to sustain the scale and engagement of our core users. On the relationship-based feed, we further enhanced capability of discovering and distributing high-quality social content and effectively promoting user consumption and interaction in the relationship-based feed by product tactics such as emphasizing exposure of social posts with high engagement in the top spot of the relationship-based feed especially among users with low and medium use of frequency and meanwhile, we continue to optimize content structure of relationship-based feed and enhance the social attributes to increase in content exposure from high-quality video accounts and super topics by optimizing the distribution mechanism in the relationship-based feed. As a result, the number of the engagement per thousand impression delivered grew double digit percentage compared with that of December 2020. On community-based product, it has become an increasing vital part within Weibo’s ecosystem. Upon ensuring compliance of entertainment business operations we have largely enriched the content verticals of super topics with emphasis on gaming, sports and campus verticals and upgrading product framework, leading to the consumption of community-based content by a broader user group and enrichment of more verticals. At this stage, the post generated from Super Topic has reached nearly 20% of our total post on a daily basis. In December 2021, we saw the number of users who consume community-based contents in sports, gaming and campus verticals achieve notable growth year-over-year. These achievements give us confidence that our investment in these products will further enhance user social stickiness and engagement on Weibo and create growth opportunity for us in the new area.

On video front, we continue to focus on expanding the scale of video accounts and improving their engagement as well as facilitating video content creation and consumption so as to deepen user engagement. As of December 2021, they were over 25 million video accounts and the number of video accounts uploading videos on a monthly basis increased multiple times on an annual basis. On operation and user engagement, we focus on original video content creators who can better drive user engagement interaction and incentivize them to generate contents to traffic and operational resources support especially for those in the key content verticals. On product side, we continue to enhance video production functions and motivated top KOLs to create contents to providing them with more interactive features. Meanwhile, as the number of video accounts increases, we continue to improve content quality and distribution accuracy of the recommended video feed further improving recommendation efficiency, user engagement and video ad inventories. On live streaming, we kept improving product features and user experience of joint mic live streaming in multiple scenarios and further integrated joint mic live streaming with key IPs and events in core verticals such as entertainment, sports and gaming in order to further cultivate user’s consumption behavior. In December 2021, the DAU use of Weibo’s live streaming more than doubled year-over-year.

Let me briefly lay out our strategy for 2022 on the product and operational front. We will strive to further grow Weibo’s user base and engagement from the following three aspects. First, on channel investment. In view of Weibo’s current users scale and the competitive landscape, we will put more emphasis on keeping the balance between user acquisition costs and the monetization per user and improving ROI of users acquired through channels and thus to keep the total user acquisition cost within a reasonable range in 2022.

Second, on Weibo’s core competitiveness, we will continue to beef up our operational efforts around hot trend and social attributes and further solidify Weibo’s competitive mode in our core features. To elaborate for one thing, we will strengthen our strategic cooperation with partners in the media, entertainment, gaming and sports sectors advocating media and IP holders to lead topic discussion and facilitate the build-out of social assets so as to enrich the supply of discussion materials around trending topics and IPs on our platform. For another as another key initiatives in 2022, we will upgrade product functionality for Super Topic through expanding content vertical for interest-based communities aiming to attract broader user base, especially younger generation to consume content and engage through company’s product and cash the incremental market share [Technical Issues] for this time any so much. And we made during the Beijing 2022 winter Olympic games that just concluded. The game attracted the attention and engagement from the general public leveraging strategic operation with winter sports [Technical Issues] center, we invited the all Chinese national teams and athletes to join Weibo [Technical Issues] and interact with [Technical Issues] people to create a social platform for social interaction among Chinese [Technical Issues]. During the [Technical Issues] relate to Super Topic being initiated and another two [Technical Issues] attended Tokyo Olympics [Technical Issues] accumulated for these assets and meanwhile, [Technical Issues] strengthen cooperation with partners [Technical Issues] we are pleased to see the [Technical Issues] with the positive on Weibo platform [Technical Issues] Tokyo Olympic Games [Technical Issues] and discussion around winter Olympic games with over 450 billion and nearly 300 [Technical Issues] that Weibo’ unique value proposition has enabled us to further reinforce our competitiveness on the product front.

[Technical Issues] in 2021, we added monetization capabilities for top content creators [Technical Issues] monetization and e-commerce model leading to nearly 50% growth in the number of top content creators were monetized within Weibo’s ecosystem. Looking forward to 2022, we will further optimize the monetization model and enhance monetization efficiency for top content creators to driver higher earnings for them, which would enhance more content generation and drive user engagement in near term.

Finally on the video front, we [Technical Issues] program to improve the video production experience and [Technical Issues] and thus accelerating the utilization trend among our creators. Meanwhile we [Technical Issues] operation the content generation of [Technical Issues] gaming and sport in the hope of [Technical Issues] for differentiating video consumption experience, so as to deepen user engagement.

On monetization front, our ad revenues continue to boost solid growth in Q4, up 21% year-over-year despite external factors such as the macro environment and industrial policies. The relative resilience in our advertising business was mainly attributable to two things. First, Weibo benefited from a relatively balanced industry mix with limited risk exposure to those sectors hit hard and made regulatory impact last year such as education and online finance. Secondly, our integrated brand plus performance and offerings resonate greatly with customers with branding these and position us well in the marketing competition, which not only enables us to secure our wallet share in key industries but also tap into other industries and acquire incremental clients and budgets.

From an industry perspective, despite a softer demand side and major challenges from macro environment and industry policies, our traditionally strong industries such as beauty and personal care, food and beverage, 3C products and automobiles continued to deliver solid growth in the fourth quarter underpinned by our optimization in marketing strategies and service capabilities. Meanwhile, our strategic focus on sectors such as luxury and apparel also paid off contributing decent growth this quarter. We have showcased Weibo’s differentiated value proposition to the market featuring the synergies between our product — user product and content operation. For instance, we leverage trending topics of Olympic games to build out [Phonetic] for Anta, a domestic apparel brand and we also seamless incorporated luxury brands shows to our live streaming products. Such ad offerings improve our client’s ad performance leading to notably higher ad wallet share in these industries. From a product perspective, we focus on optimizing and innovating our ad formats to offer clients diversified product portfolio while further strengthening the synergies between our product and the content operation so as to empower clients, accumulate social assets and that will reach targeted audience on Weibo. Heading into 2022 on the monetization front, underpinned by uptick in traffic, we will step up our efforts in ad product optimization and sales execution to further enhance our monetization scale efficiency as well as market competitiveness. First on ad product, leveraging Weibo’s differentiation and advantages with trends and innovation of content-based ad product launching more ad product with competitive edge such as app opening ad and hot trend products and thus driving ad demand. Additionally, we will further optimize our ad placement capabilities for our performance ad offerings uplifting the conversion efficiency and client’s ad placement experience in order to maximize our monetization efficiency of Weibo’s information feed. Second, from an industry perspective, leveraging the resilience of Weibo’s integrated brand plus performance, ad offerings in key verticals, we are dedicated to sustaining steady revenue growth in these industries while extending the marketing combo of integrated brand plus performance ad with content operation to more industries and clients aiming to attract incremental client and ad wallet as well as reinforce Weibo’s competitiveness in ad market. For instance, we plan to further upgrade our e-commerce product solution, namely Weibo Mini Shop to enable clients improve conversions in the closed-loop solution of our platform. Finally on sales execution, we will continue to optimize Weibo’s sales structure and improving synergies with the operational team and adapt to formulate industry’s specific monetization strategies which would more closely support Weibo’s marketing system and improve its overall monetization efficiency. With that, let me turn the floor over to Fei Cao for a financial review.

Fei Cao — Chief Financial Officer

Thank you. Gaofei, and hello everyone. Welcome to Weibo’s fourth quarter and the fiscal year 2020 earnings conference call. As a reminder, my prepared remarks would focus on non-GAAP results. All monetary amounts are in U.S. dollar terms and all the comparisons on a year-over-year basis unless otherwise noted. Weibo had another solid quarter to finish 2021 with annual revenues surpassing the $2 billion mark, up 34% for the year despite macro and industry headwinds. On top of top line momentum, we also delivered decent operating leverage and a strong operating cash flow generating $829.2 million in operating income and $778.9 million in free cash flow.

Starting with user metrics, in December 2021, Weibo’s MAU and average DAUs reached $573 million and $249 million respectively representing a net addition of $52 million and 25 million users on a year-over-year basis. In 2021, we have achieved a solid growth of user community, leveraging our strength in serving public conversation and the effective channel investments.

Heading into 2022, Weibo focused on integrating our product roadmap to reinforce our differentiation in serving real-time public conversation while navigating through the new regulatory landscape and the making Weibo the go-to platform to find out and discuss what’s happening. Meanwhile, Weibo will up our investments in key content verticals such as sports and online gaming positioning us well to tap into a broader user community and improve user frequency and engagement.

Now, let me go through our financial highlights for the fourth quarter and fiscal year 2021. Weibo’s fourth quarter 2021 net revenues was $616.3 million, an increase of 20%. Operating income was $219.8 million, representing an operating margin of 36%. Net income attributable to Weibo reached $295.5 million representing a net margin of 32%, diluted EPS was $0.83 compared to $0.92 in 2020. For full-year 2021, total revenues reached $2.36 billion, an increase of 34%, operating income was $829.2 million, an increase of 43% representing operating margin of 37%. Net income attributable to Weibo reached $718.5 million representing a net margin of 32%, diluted EPS was $3.08 compared to $2.38 in 2020.

Let me give you more color on our fourth quarter and the full-year 2020 revenue growth. Weibo’s advertising and marketing revenues for the fourth quarter 2021 was $515.8 million, an increase of 21%. Mobile ad revenues reached $516.1 million, representing 94% of our total ad revenue, up from 81% last year. Full-year 2021 advertising and the marketing revenues reached $1.98 billion, an increase of 33% with mobile ad revenues contributing 93% of total ad revenue, up from 90% in 2020.

Let’s start with fourth quarter performance. We will close the year on a solid note sustaining double-digit growth even though the overall advertising market was tapering off amid the macro and the regulatory headwinds. In terms of revenue contribution, our top 3 verticals were FMCG, e-commerce and 3C products. In terms of growth, luxury was the fastest growing vertical, among major ones. Least consumption sectors including consumer staples and the discretionary demonstrated relative resilience against a tough market environment, speaking to Weibo’s unique value proposition in serving their integrated branding plus performance marketing needs during the e-commerce peak season[Phonetic].

From ad product perspective, promoted feeds continued to be the largest part followed by social display ad and search and the topic ad offering. With targeting over effect [Phonetic] our several ad offering such as live stream ad, our team directed to serve our customers within our ecosystem and mitigate the impact by facilitating them to switch to desirable alternative, leveraging our full spectrum of social ad products that we offer.

Moving on to full year 2021 performance. In 2021, Weibo demonstrated a strong recovery momentum delivering over 30% year-over-year growth in revenues underpinned by ad demand rebound, traffic uptick and ongoing ad optimization. We are also delighted to see stronger sales execution upon the integration between our KA and SME segment, which enables them to steadfastly focus on customer’s industry specific needs by industry. Our largest growth verticals were FMCG, e-commerce and 3C products. Weibo has gradually become the cornerstone of many advertisers in these consumption sectors. By empowering them to leverage KOLs influence and collect with generations and users and thus for feeding their integrating branding plus performance needs. In 2021, sectors like FMCG, 3C, gaming and the luxury outperformed whereas education, entertainment and the real estate sectors underperformed mainly due to macro and revenues headwinds. The ad product promoted fees was the largest followed by social display ad and topic ad search.

Our fourth quarter [Phonetic] social marketing product delivered competitive ROI and resonated greatly with brands and merchants with Weibo’s differentiated ad offerings such as search and topic leading the growth. Overall speaking in 2021 from a demand perspective, we navigated through our traditional landscape and increased our ad wallet share from customers with resilience in the challenging environment. From a supply perspective, the growth of ad revenues was primarily driven by traffic and sales-through rate demonstrating higher monetization efficiency and stronger sales capability.

Ad revenues from Alibaba for fourth quarter decreased to 24% to $45.5 million correlating with its conservative marketing strategies in 2021. Full-year ad revenues from Alibaba decreased 8% to $139.6 million broadly consistent with our expectation. The decrease is offset by inventories sold to other e-commerce platforms and brand advertisers with integrated brand plus performance marketing demand.

Before turning to last segment, let me give some color on the trends in 2022. Currently, we expect to see softness in the overall advertising market. In light of macro and the regulatory uncertainties within our segment — within our sentiment. With that said we believe the headwinds could be transient rather than structural with advertising industry rebase [Phonetic] and the secular growth driver reaffirm itself. In 2022, our team, will beat our execution and work relentlessly to fulfill customer differentiating the marketing needs against a tough environment in the hope of further uplift in our monetization scale and ad efficiency.

Value added service, VAS, revenues was $55.5 million in the fourth quarter, an increase of 9%. The increase was primarily attributable to a full quarter revenue booked from the interactive entertainment company consolidated in the November 2020 while partially offset by the decrease of revenues from that — from live streaming business. Full year 2021 last revenue was $276.3 million, an increase of 36% mainly resulted from incremental revenues derived from the interactive entertainment company consolidated in November 2020 and other online gaming revenues while partially offset by the decrease of revenues from live streaming business.

Turning to costs and expenses, total cost and expenses for the fourth quarter was $396.5 million, an increase of 28%. The increase was primarily due to higher personnel related costs as well as step up in ad costs, mainly associated with seasonal ad contents execution. Full year costs and expenses totaled $1.43 billion compared to $1.11 billion for 2020. Operating income in the fourth quarter $219.8 million, an increase of 80% [Phonetic] representing operating margin of 36% compared to 40% last year. Operating income for full year 2021 was $829.2 million representing an operating margin of 37% compared to 34% in 2020 and they continue to balance well between investment for both on the margin performance.

Turning to income tax under GAAP measure. Income tax expense for the fourth quarter with $45.6 million compared to a benefit of $25.4million last year. The increase of income tax expenses was primarily resulted from tax benefit booked in the fourth quarter of last year due to preferential tax treatment of our subsidiary as a key software enterprise, namely KSE which lapsed in 2021 and the super deduction true-up for eligible R&D expenses in the fourth quarter of 2020. Full year income tax expenses were $138.8 million compared to $61.4 million in 2020. The increase was mainly resulted from first, higher profits in 2021 versus 2020. Second, tax benefit booked in 2020 due to preferential tax treatment of our subsidiary as KSE which lapsed in 2021 and third, tax liability recognized in 2021 related to uncertain tax positions.

Net income attributable to Weibo in the fourth quarter was $195.5 million compared to $212.7 million last year. Net margin was 32% compared to 41% of same period last year. Net income for full year 2021 was $718.5 million representing a net margin of 32% flat versus 2020.

Turning to our balance sheet and the cash flow items. As of December 31, 2021 Weibo’s cash, cash equivalent and the short-term investments totaled $3.1 billion compared to $3.7 billion as of December 31, 2020. The decrease was primarily resulted from the investment activities we made and was partially offset by cash provided by operating activities and the proceeds from our global offering in the fourth quarter, cash provided by operating activities was $249.7 million. Capital expenditures totaled $11.3 and the depreciation and amortization expenses amounted to $14.8 million. On full year basis, cash provided by operating activities was $814 million, capital expenditures totaled $35.1 million and depreciation and amortization expenses amounted to $55 million. We delivered approximately $778.9 million free cash flow in 2021, an increase of 10% year-over-year representing our capability of delivering high profitability and the generating strong operating cash flow.

Lastly, on December 8, 2021 we successfully listed on the main board of the Hong Kong Stock Exchange under the stock code 9898 through our global offering of 11 million Class A ordinary shares. As a newly listed to the company on Hong Kong Stock Exchange, we need to comply with regulations and the follow common practice adopted by public companies in the Hong Kong market. Therefore, we will no longer provide financial guidance on that revenue growth going forward. That said, we remain committed to delivering sustainable growth of our revenue with pace in the profitability and free cash flow generation and driving shareholder value in the long run.

With that, let me now turn the call to the operator for the Q&A session.

Questions and Answers:

Operator

Thank you. [Operator Instructions] Our first question comes from Alicia Yap from Citigroup. Please ask your question.

Alicia Yap — Citigroup — Analyst

Hi, thank you.

[Foreign Speech]. So I understand company no longer provides official guidance after Hong Kong listing but can management provide some colors or the directions as the latest sentiments by the advertiser, if January or February that you are seeing, is it more of the same as the fourth quarter. Thank you.

Gaofei Wang — Chief Executive Officer

[Foreign Speech] Alright, thank you. Thank you very much for your question. So first of all, I have to say that in Q1, we have seen a very good growth in terms of the advertisements placement in terms of the industries of FMCG. the 3C products and automotive and luxury products as well and also due to the external environment and also headwinds as well as the regulatory headwinds, some of the industries really experienced some kind of an active growth. For example in Q4 of last year, we’ve been having a lot of that regulatory activities over the livestreaming eCommerce. So originally, they plan to replace some of advertisements during the spring festival period in Q1 of this year, but actually they stopped been — doing so because of those headwinds of the regulation. So last year in Q1 actually this types of advertisement revenue had kind of grew about 5% of our total revenue and also next sector or vertical is about the education. So you can see that last year in Q1, they had the budget for the placement of the advertisement but actually this was heavily impacted. So apart from these two verticals that are heavily impacted for the other verticals, I think that we are positively enjoying a double-digit growth and also apart from that, we also had some of the — a little bit headwinds on the gaming industry as well as the e-commerce but still overall speaking, I think the development, it’s pretty much good.

Operator

Alright, thank you. Our next question comes from Miranda Zhuang from Bank of America. Please ask your question.

Miranda Zhuang — Bank of America — Analyst

[Foreign Speech] Thank you for taking my question. Can management elaborate on the verticalization strategy for 2022? Which verticals will you focus to expand, specifically, that will go ahead and gain strong traction in Olympics campaign. So what kind of strategy will company to take for the sports vertical going forward this year and also what kind of strategy will company to take for the online game vertical and is there any impact from the titan — online game regulation involvement. Thank you.

Gaofei Wang — Chief Executive Officer

[Foreign Speech] So first of all, let me share some color in terms of the vertical of entertainment and also culture. So in this vertical of entertainment, it used to be a very important part for our accumulation of traffic. But since the second half of last year, we’ve been seeing some kind of a remodeling and also rescheduling of this entertainment industry. So this did bring an active impact to our business and performance in Q3 and Q4 last year, specifically on the traffic part and also in 2022, of course, we’ve been seeing a very good transformation of this entertainment industry that was previously generated in terms of the idol-based [Phonetic] economy to pretty much to focus on the product itself and also the production of the works. So you can see that this is the part one. But still you know I’m talking about the traffic, this is still in the process of being recovered and of course now in terms of the hot trend and also the hot search we’ve been seeing that. All those listed topics on the hot trend are all pretty much based on the product or based on the works. So in the second half of this year of 2022 we are going to see the traffic volume, which is going to be recovered to the stage before the regulation on the entertainment industry.

So, second part, as you have mentioned something about the sport industry and actually for the vertical of sport, this is also a very important, as important as the entertainment as one big part of the mass public consumption. So as you can see, the last year and talking about the Tokyo Olympics because of very much a big focus we’ve gained a very good growth in terms of the traffic and also the number of users of using Weibo and also for this year’s Winter Olympics in Beijing, we’ve been seeing that in terms of traffic and also the number of — this is almost reaching the stages of the Tokyo Olympics and this is to be honest with you, out of our expectation. And also in 2022, this is a big year for all the sport event. For example in the second half of the year, we’re going to have all Asian Games and also at the end of 2022 the World Cup as well, so that we are going to focus on the investment on the content, so that we’re going to gain a very good growth in terms of the traffics and also the number of users as well on this one. And also last year in the Tokyo Olympics and we’ve been finding that some of the sponsors and also the sponsors of the athlete, etc. we’ve been gaining around 40 plus more customers of placing their ads with us, so that this is another kind of a very good growth. So previously we had quite conserved or conservative expectation on the performance during the Winter Olympics period. So we really believe that in the future in terms of the budget of those advertisers, we are going to have a big room for further improvement. So this is a very important year in terms of the sports verticals.

And also third of all, in terms of the vertical of gaming, so now our focus is on the operation of the eSports — on tournaments. So you can see that this has been showing a very good results and performance driven in the Q4 of last year during the tournament series. And also another focus is on the investment to the eSport teams. So this is going to further provide excellent content as well as the services to attract the young users and also third thing is that this year we are going to dedicate ourselves continuously to the tournaments and these four games as well. So of course all those eSports events are pretty much based on the mature and also the existing games. So we don’t think that whether or not the licenses are granted to the new games and whether or not the new games are pretty much launched in a massive way or in less massive way this year will have a big impact on the traffic volume but of course it is going to a little bit impact the budget gaining abilities for us but because the percentage of the revenue contribution from the gaming sector is actually a little bit small to our total revenue, so we’ve been seeing not big impact in Q1 of this year. But of course, as long as we are going to focus on the attractions of the new users and also pay attention to the activities of the users and time spent with Weibo of those young users, we’re going to have a very big room for further improvement.

Operator

Alright, thank you. So we have reached the end of the question and answer session. I will turn the call back to the management team for closing remarks.

Unidentified Speaker —

Okay, thanks Operator. This wraps up our conference call this quarter. Thank you for joining us. We’ll see you next quarter.

Operator

[Operator Closing Remarks]

Disclaimer

This transcript is produced by AlphaStreet, Inc. While we strive to produce the best transcripts, it may contain misspellings and other inaccuracies. This transcript is provided as is without express or implied warranties of any kind. As with all our articles, AlphaStreet, Inc. does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company’s SEC filings. Neither the information nor any opinion expressed in this transcript constitutes a solicitation of the purchase or sale of securities or commodities. Any opinion expressed in the transcript does not necessarily reflect the views of AlphaStreet, Inc.

© COPYRIGHT 2021, AlphaStreet, Inc. All rights reserved. Any reproduction, redistribution or retransmission is expressly prohibited.

Most Popular

Beyond short-term challenges, Cisco’s (CSCO) prospects remain intact

Cisco Systems Inc. (NASDAQ: CSCO) is the undisputed leader in networking technology, but its core business has been facing challenges over the past few years. While the company faces stiff

Earnings: Applied Materials (AMAT) Q2 profit, revenue increase

Semiconductor technology company Applied Materials, Inc. (NASDAQ: AMAT) on Thursday reported higher earnings and revenues for the second quarter of 2022. However, the results missed analysts' estimates. Adjusted net income

Target (TGT) expects Q1 headwinds to continue to impact profitability in the near term

Shares of Target Corporation (NYSE: TGT) were down 4% on Thursday, yet to fully recover from the beating it took a day earlier after delivering mixed results for the first

Add Comment
Loading...
Cancel
Viewing Highlight
Loading...
Highlight
Close
Top