Weibo Company (WB) This autumn 2023 Earnings Name Transcript

Weibo Company (NASDAQ:WB) This autumn 2023 Outcomes Convention Name March 14, 2024 7:00 AM ET

Firm Contributors

Sandra Zhang – Investor Relations

Gaofei Wang – CEO & Director

Fei Cao – Chief Monetary Officer

Convention Name Contributors

Timothy Zhao – Goldman Sachs

Thomas Chong – Jefferies

Xueqing Zhang – CICC

Operator

Good day and thanks for standing by. Welcome to Weibo Reviews Fourth Quarter and Fiscal Yr 2023 Monetary Outcomes Convention name.

Right now, all contributors are in a listen-only mode. After the audio system’ presentation, there will probably be a question-and-answer session. [Operator Instructions] Please be suggested that at present’s convention is being recorded.

I’d now like to show the decision over to the primary speaker at present, Ms. Sandra Zhang from Weibo Company. Thanks. Please go forward.

Sandra Zhang

Thanks, operator. Welcome to Weibo’s fourth quarter and full yr 2023 earnings convention name.

Becoming a member of me at present are Chief Government Officer, Gaofei Wang; and our Chief Monetary Officer, Fei Cao. The convention name can also be being broadcasted on Web and is obtainable via Weibo’s IR web site.

Earlier than the administration remarks, I wish to learn you the Secure Harbor assertion in reference to at present’s convention name. Throughout at present’s convention name, we could make forward-looking statements, statements that aren’t historic info, together with statements of our beliefs and expectations. Ahead-looking statements contain inherent dangers and uncertainties. A variety of vital elements may trigger precise outcomes to vary materially from these contained in any forward-looking statements. Weibo assumes no obligation to replace the forward-looking assertion on this convention name and elsewhere.

Additional info relating to this and different dangers is included in Weibo’s Annual Report on Kind 20-F and different filings with the SEC. All the data supplied on this press launch is going on as of the date hereof. Weibo assumes no obligation to replace such info besides as required underneath relevant regulation. Moreover, I wish to remind you that our dialogue at present contains sure non-GAAP measures, which excludes stock-based compensation and sure different bills. We use non-GAAP monetary measures to realize a greater understanding of Weibo’s comparative working outcomes, efficiency and future prospects. Our non-GAAP financials exclude sure bills, positive factors or losses, and different objects that aren’t anticipated to lead to future money fee or are non-recurring in nature, or should not indicative of our core working outcomes and outlook. Please discuss with our press launch for extra details about our non-GAAP measures.

Following the administration ready remarks, we’ll open the strains for a short Q&A session.

With this, I wish to flip the decision over to our CEO, Gaofei Wang.

Gaofei Wang

Thanks. Hi there, everybody. Welcome to Weibo’s fourth quarter and full yr 2023 earnings convention name.

On at present’s name, I am going to share with you highlights on Weibo’s product and monetization, evaluate the progress made in 2023, and elaborate our methods for 2024.

Ranging from our monetary efficiency within the fourth quarter. Within the fourth quarter of 2023, our efforts to enhance consumer acquisition and engagement of high-value customers continued to repay. As well as, we beef-up our initiatives to additional get well the video content material ecosystem, strengthen content material operations, and improve our capacity to serve possibility advertising. Because of this, regardless of the general sluggish finish market, our whole income within the fourth quarter reached $463.7 million, a rise of three% year-over-year and 5% quarter-over-quarter. Our whole advert revenues reached $403.7 million, a rise of three% year-over-year and 4% quarter-over-quarter. On a continuing foreign money foundation, each our whole revenues and advert revenues within the fourth quarter would have elevated 5% year-over-year. Our non-GAAP working earnings within the fourth quarter reached $145.9 million, representing a non-GAAP working margin of 31%.

Turning to our full yr monetary efficiency. In 2023, as a result of uncertainties of the macro and {industry} surroundings, the restoration of advert demand was a bit unstable. It resulted in decrease than anticipated annual advertising price range for some shoppers in key industries in contrast with our expectation originally of the yr, which weighed down the expansion of our advert enterprise. For full yr 2023, our whole revenues reached $1.76 billion, a lower of 4% year-over-year. Our whole advert revenues reached $1.53 billion, a lower of 4% year-over-year. On a continuing foreign money foundation, each of our whole revenues and advert revenues would have elevated 1% year-over-year. This yr we concentrate on bettering our product’s core competitiveness and enhancing working effectivity to navigate via challenges from an exterior surroundings. For full yr 2023, our non-GAAP working earnings reached $592.1 million, representing a non-GAAP working margin of 34%.

On the consumer entrance, Weibo’s MAUs reached 598 million and common every day customers reached 257 million within the fourth quarter, including roughly 11 million and 5 million customers year-over-year, respectively.

Subsequent, let me elaborate our progress made on product operation and monetization within the fourth quarter and our key methods for 2024.

Taking a look at our technique from 2023. Within the first half of the yr, we began to get well consumer site visitors within the post-pandemic period within the second half of the yr, whereas sustaining our core competitiveness in [indiscernible] tradition, leisure and sports activities. We strengthened the event of vertical content material ecosystem via site visitors assist for vertical content material, which enhanced the competitiveness and well being of Weibo’s total ecosystem.

On the channel entrance, within the fourth quarter, we maintained cooperation with producers to extend channel funding for the acquisition of high-value customers via extra correct [indiscernible] and concentrating on functionality, our consumer engagement has been improved, which laid the inspiration for monetization.

On social attributes, within the fourth quarter, we proceed to execute methods to concentrate on growth of content material verticals. On the one hand, we proceed to optimize content material construction for relationship-based feed to strengthen the distribution of content material from key verticals and get well the general content material ecosystem. Then again, we proceed to complement the methods vertical KOLs work together with their mates and enhance their interplay effectivity. Because of this, KOLs from vertical areas continued to realize extra site visitors and consumer interactions and have become extra keen to generate content material. In 2023, the variety of every day interactive customers and the variety of interactions within the relationship-based feed continued to develop year-over-year. For Tremendous Subject, we launched the brand new capabilities for customers to put up and work together, boosting consumer engagement locally. Specifically, for the leisure vertical, we additional enhanced the Tremendous Subject social attributes and interplay for customers’ in-depth dialogue and content material recreation within the leisure sector, leveraging enchancment of the general sector. Because of this, consumer engagement within the leisure vertical elevated considerably in 2023 versus 2022. The variety of DAUs of Tremendous Subject elevated year-over-year and the variety of customers who put up per day and interplay of the Tremendous Subject elevated over 20% year-over-year.

On the content material entrance, within the fourth quarter, on prime of retaining the competitiveness of sizzling matters, leisure and different benefits key IP-related verticals, we linked our site visitors towards verticals to assist the {industry} market. For instance, we elevated funding in digital, car, on-line video games, vogue and wonder and healthcare verticals to reinforce {industry} companions’ notion of the platform worth and additional improve the competitiveness of our content material ecosystem.

On IP-related content material ecosystem, within the fourth quarter, for leisure vertical, we proceed to spice up the engagement and interplay of prime celebrities and elevated the dialogue round their works to strengthen our competitiveness within the followers and leisure work-related content material ecosystem. In 2023, the site visitors and interactions within the leisure vertical elevated year-over-year. Specifically, prime superstar engagement and posts elevated over 30% year-over-year, with a greater surroundings for leisure work manufacturing and launch. The site visitors across the promotion of leisure work and dialogue round these works have elevated considerably year-over-year with whole dialogue rising by greater than 50% year-over-year. The site visitors and dialogue round TV sequence on Weibo reached the document excessive. When it comes to sizzling tendencies, we encourage nationwide media to prepare discussions of sizzling tendencies within the vertical space, facilitating media’s sizzling development protection from social information to vertical sizzling tendencies to extend the media engagement within the vertical sizzling tendencies and stabilize consumer demand for consumption and dialogue of the social sizzling matters.

On industry-related content material verticals, we proceed to speculate extra assets throughout the platform within the fourth quarter. First, we strengthened the site visitors distribution of high-quality vertical content material, elevated the proportion of vertical content material on the platform, and promoted the event of prime KOLs in every content material vertical. Second, we adjusted the product mechanism to reinforce site visitors assist to vertical sizzling content material that creates sizzling development impact, bettering the notion of industry-related sizzling tendencies. Third, we improved the operation of industry-related vertical matters and occasions, leveraging Weibo’s benefits in cross-vertical operation to information media and prime cross-vertical KOLs to put up and interact with the vertical content material. All these measures contributed to the continual development of the site visitors and interplay in industry-related verticals in contrast with the third quarter. For instance, since October, we now have seen a surge in consumer curiosity in numerous respiratory ailments comparable to influenza and mycoplasma. We encourage the media accounts to actively put up content material of widespread science and likewise promote associated content material sharing from vertical KOLs from throughout verticals. Because of this, the overall consumption of the associated sizzling matters has exceeded 2 billion, attracting numerous docs to hitch and interact on Weibo. It has rapidly elevated Weibo’s affect within the medical {industry} and established consumer behavior of discovering, consuming and discussing sizzling matters within the healthcare vertical on Weibo.

Transferring on to monetization entrance. Within the fourth quarter, due to the e-commerce procuring festivals, the year-end promotion and tailwinds from sport license approval, Weibo’s advert revenues grew 3% year-over-year and 4% quarter-over-quarter, leveraging Weibo’s energy in sizzling development advertising.

By {industry}, revenues from the car and the handset sector sustained strong year-over-year development within the fourth quarter. The expansion was primarily attributable to Weibo’s differentiated benefit of content material advertising in new product launch in addition to favorable dialogue mild within the areas of digital applied sciences and new vitality autos. As well as, the web video games and healthcare industries booked a double-digit development year-over-year within the fourth quarter. As for the healthcare sector, we’re happy to see regular development trajectory of each our {industry} affect and monetization with a surge of consumer curiosity within the healthcare {industry} put up the reopening. Our elevated funding in vertical content material ecosystem of healthcare additionally regularly bear fruit. When it comes to the web sport {industry}, with tailwinds from sport license approval and higher recognition of our content material advertising answer amongst clients, we captured the chance to advertise the brand new blockbuster titles for key shoppers within the fourth quarter, delivering sustained year-over-year income development. For instance, within the fourth quarter, Tencent’s Dream Star and NetEase Eggy Get together spent closely on Weibo for brand new sport marketing campaign. With price range allotted principally to sizzling development and content material advertising, we now have delivered robust branding impact, beating consumer’s expectation entertained by our distinctive content material advertising and repair functionality of constructing market hype for the brand new video games. Advert revenues from e-commerce sector additionally boosted year-over-year and quarter-over-quarter development within the fourth quarter, due to the mega e-commerce procuring festivals.

On the flip facet, for the sweetness and private care {industry}, even with robust site visitors assist to total content material era, prime shoppers have been nonetheless closing out stock throughout the Double 11 procuring pageant, leading to continued price range shifts in direction of performance-based platforms. Subsequently, the restoration tempo of the sweetness and private care {industry} nonetheless fell in need of our expectations, which has turn into the most important drag for the general advert development in 2023. For one factor, pushed by advert price range shifts from offline to on-line throughout the pandemic, income contributions from the sweetness and private care {industry} elevated considerably in 2020 and 2021, which created a excessive base at the moment. This [indiscernible] for an additional since 2022, clients have been shifting their gross sales channel for e-commerce stay streaming platforms, resulting in a decline in advert quantity share of social media and conventional e-commerce platforms. Moreover, we additionally must additional beef up our investments to strengthen Weibo’s competitiveness within the content material vertical of magnificence and private care. We hope to renew optimistic advert development on this sector this or subsequent yr with additional restoration of content material ecosystem and normalization in clients’ gross sales channel changes.

Trying again on 2023, we confronted challenges from fast shifts in consumer curiosity within the post-pandemic period. Particularly, we noticed a decline in content material consumption demand for information and sizzling tendencies, whereas a surge in consumption demand for vertical content material. Within the meantime, the restoration tempo of the general client market additionally fell in need of expectations, resulting in a minimize in model advert price range for sure clients. In mild of the headwinds from content material consumption and promoting demand facet, we concentrate on bettering the platform’s working effectivity in 2023. We strengthened our competitiveness in sizzling tendencies and social merchandise, additional grown our consumer group and site visitors, in addition to enhanced the monetization worth of the platform site visitors. This effort laid strong basis for us to advertise vertical site visitors and thus revitalize Weibo’s firm ecosystem and competitiveness.

General talking, though revenues from sure industries fell in need of expectation and dragged the overall income development, we delivered respectable working revenue, which additional elevated from final yr, due to strong execution of our effectivity initiatives, leveraging improved working effectivity, steady profitability and wholesome money stream additional elevated our monetary flexibility, giving us ample room to put money into vertical content material ecosystem and drive consumer development and engagement. In view of the difficult competitors panorama of vertical content material, we’ll take gradual steps to restoring our competitiveness of vertical content material ecosystem whereas concentrate on solidifying our advantageous areas. It might take 2 to three years to drive up the site visitors share of vertical content material on the platform. On this means, we may additional reinforce Weibo’s market affect, obtain wholesome growth of the content material ecosystem, and thus lay a strong basis to reinforce our monetization effectivity.

In 2024, we are going to concentrate on rising our consumer group and engagement, strengthening the competitiveness of our content material ecosystem, in addition to additional enhancing our working effectivity. In mild of the present market circumstances, we attempt to keep up regular income development and bettering the general effectivity within the meantime. On the operation entrance, we are going to beef-up our efforts to strengthen the aggressive fringe of sizzling tendencies and IPs and revitalize our vertical ecosystem on the similar time. On the monetization entrance, we goal to optimize our content material advertising and performance-based advert merchandise. We imagine the execution of those methods will lay a strong basis for our top-line restoration from the consumer, content material and monetization facet, enabling us to seize market alternatives as soon as the macro-economy will get higher and model advert demand improves.

On the consumer and engagement entrance, in 2024, our product operation will concentrate on 3 points. First, we are going to proceed to function carefully with strategic channel companions with a concentrate on bettering high-value consumer acquisition and utilization frequency. Second, we emphasize on optimizing the construction of social merchandise and additional enhancing the advice effectivity of knowledge feeds within the hope of driving user-scale, social interactions, and engagement. Third, we’ll refine the product vibe and consumer expertise of sizzling development merchandise with a purpose to reinforce the mindset and market affect of [indiscernible] customers. In the meantime, we may also attempt to create extra sizzling trend-based merchandise, enabling customers to find extra sizzling matters and tendencies enter public dialogue and thus develop the consumer scale and engagement of sizzling development merchandise.

On the content material ecosystem, we additionally spotlight 3 points in 2024. First, we are going to proceed to strengthen our main place across the ecosystem of leisure and sports activities occasions. Specifically, as for the leisure sector, we’ll strengthen the superstar followers ecosystem to extend consumer interactions and concentrate on strengthening our strategic cooperation with the promotion and distribution platform of flicks, TV sequence and selection exhibits. This is not going to solely solidify the competitiveness of leisure work-based ecosystem, but in addition drive platform site visitors and consumer engagement. Taking the film promotion throughout the 2024 Spring Competition, as instance, leveraging our cooperation with film IP holders across the sizzling development operation of film plots, superstar followers interactions and prolonged vertical matters. We’re happy to see a 50% improve in subject dialogue year-for-year giving us confidence in changing into a go-to platform for film promotion this yr. 2024 additionally marks the yr of the Olympics. Our years of cultivation across the sports activities vertical will probably be paid-off with a possibility to realize new document highs in sports-related site visitors and discussions.

Second, we are going to proceed to solidify our main place round sizzling tendencies. We hope to receiving the regular development of society and media-related sizzling matters. The secret is to raised interact the media and prime content material creators within the distribution and dialogue of sizzling matters round vertical tendencies, enabling the build-out of mega sizzling matters. These efforts would hopefully consolidate Weibo’s market affect within the sizzling development space and facilitate consumer acquisition at a big scale.

Third, we’ll additional strengthen the cultivation of vertical ecosystem in key industries. To elaborate, we are going to develop the quantity and engagement of golden and orange verified accounts, boosting the dialogue of vertical sizzling matters and thus reinforcing the synergy between firm ecosystem and monetization ecosystem, which types a virtuous self-reinforcing cycle.

Lastly, on the working effectivity, we’ll step-up our efforts in enhancing our monetization competitiveness. We are going to proceed to strengthen the popularity of Weibo’s content material and IP advertising amongst extra industries and shoppers and thus enhance our aggressive edge in capturing shoppers’ budgets. When it comes to the advert merchandise, we’ll standardize and scale-up the gross sales of our content material and IP advertising choices. As for performance-based advertisements, we attempt to enhance our service functionality round advert efficiency and content material with a concentrate on optimizing analysis of advert efficiency of key industries and prime shoppers. As an illustration, the famend down-jacket model Bosideng capitalized on its two product ideas, light-weight and skinny, and reshaping classics in winter marketing campaign of 2023, leveraging a mix of superstar endorsement and content material advertising on Weibo. Bosideng deeply bonded with sizzling matters round this model ambassador Yang Zi tapping into real-time winter-related tendencies comparable to temperature drops and white snow to firmly affiliate the model with sustained one in Bosideng. On the similar time, Bosideng leveraged the superstar’s recognition to drive e-commerce site visitors on-line whereas selling its opening of the [indiscernible] flagship retailer as a grand occasion offline. Because of this, the gross sales efficiency boosted dramatically within the fourth quarter, with gross sales quantity rising 40% year-over-year. This yr, we are going to standardize our advert merchandise and repair processes to well timed combine widespread IPs comparable to leisure and sports activities occasions with the marketing campaign objective of our shoppers, which can additional promote the monetization worth of sizzling tendencies. On prime of those initiatives to drive top-line development, we may also proceed to successfully self-discipline our value bills, strengthen the platform administration, and additional enhance the general working effectivity of our platform.

With that, let me flip the decision over to Fei Cao for a monetary evaluate for the fourth quarter of 2023 and full-year monetary outcomes.

Fei Cao

Thanks, Gaofei, and good day, everybody. Welcome to Weibo’s fourth quarter and monetary yr 2023 earnings convention name.

Let’s begin with consumer metrics. In December 2023, Weibo’s MAUs and common DAUs reached 598 million and 257 million, respectively, representing a rise of 11 million and 5 million customers on a year-over-year foundation in 2023. Our consumer group and engagement stay wholesome regardless of dealing with out of pandemic-related site visitors in addition to the continuing execution of Egypt and China funding methods.

Turning to financials. As a reminder, my ready remarks would concentrate on non-GAAP outcomes. All financial quantities are in US greenback phrases and all of the comparisons are on a year-on-year foundation until in any other case observed. We skilled happiness via our financials because of the volatility of overseas change charges all year long. Since our enterprise primarily operates in China, whereas we report our financials in US {dollars}. Our monetary efficiency was affected by antagonistic foreign money actions.

Let me now stroll you thru our monetary highlights for the fourth quarter and monetary yr 2023. Weibo’s fourth quarter 2023 internet income was $463.7 million, a rise of three%, or 5% on a continuing foreign money foundation. Working earnings was $145.9 million, representing working margin of 31%. Web earnings attributable to Weibo reached $76.4 million and diluted EPS was $0.31.

For full yr 2023, whole income reached $1.76 billion, a lower of 4%, or a rise of 1% on a continuing foreign money foundation. Working earnings was $592.1 million, representing working margin of 34%. Web earnings attributable to Weibo reached $450.6 million and diluted EPS was $1.88. Working money stream for full yr 2023 reached $672.8 million, a rise of 19%.

Let me provide you with extra coloration on fourth quarter and full yr 2023 income efficiency. Weibo’s promoting and advertising income for the fourth quarter 2023 was $403.7 million, a rise of three%, or 5% on fixed foreign money foundation. Cellular advert income was $379.2 million, contributing roughly 94% of whole advert income. Full yr 2023 promoting and advertising income reached $1.53 billion, a lower of 4%, or a rise of 1% on fixed foreign money foundation, with cell advert income contributing 94% of whole as income.

Relating to our This autumn efficiency entrance, in step with our expectations, promoting enterprise booked a strong development total with divergent efficiency throughout our pillar advert verticals. By {industry}, our largest 3 verticals have been magnificence merchandise, FMCG and e-commerce. When it comes to development, we’re inspired to see robust momentum of handset sector proceed all year long. The handset sector delivered double-digit development for each year-over-year and quarter-over-quarter as clients embraced our platform to succeed in higher-up customers and construct market cap. The e-commerce and sport sectors additionally demonstrated a strong restoration development with double-digit development, leveraging favorable dynamics within the computation panorama and launch of blockbuster titles [indiscernible]. The FMCG class continued on the ascending trajectory. The meals and beverage sector confronted a excessive comparable base due to the World Cup marketing campaign season in 2022. In the meantime, the beauty and private care sector remained underneath stress, affected by gentle gross sales and a stringent advertising expense management amongst our multinational clients. Additionally, we continued to see advert budgets shift towards — to these platforms to serve the advertising goal of stock clearance throughout the e-commerce season.

Transferring on to full yr 2023 efficiency, as a result of macro uncertainties and consumption weak point, the restoration tempo of our promoting enterprise in 2023 proved to be tough. On a continuing foreign money foundation, our promoting and advertising income elevated 1% versus 2022. By {industry}, our largest 3 verticals have been FMCG, magnificence merchandise and e-commerce. With respect to development, magnificence merchandise was the biggest contributor to year-over-year development, adopted by e-commerce and car amongst main classes. Nevertheless, discretionary consumption classes comparable to cosmetics and private care, luxurious, attire confronted broad-based heaviness from demand development for advert merchandise. [indiscernible] was largely adopted by social show advertisements and matters and analysis. In 2023, in mild of a tepid promoting demand, we centered on revitalizing the content material ecosystem with excessive monetization potential comparable to magnificence merchandise and car. This effort has enabled us to additional strengthen our content material advertising choices and improve our market differentiation.

Advert revenues from Alibaba for the fourth quarter have been $44.9 million, a rise of 6%, or 8% on a continuing foreign money foundation, due to modest restoration of consumption market and intensified competitors throughout the mega procuring pageant. Full yr advert revenues from Alibaba have been $111.6 million, a rise of 4%, or 10% on fixed foreign money foundation, in step with Alibaba’s average pickup in advertising price range. Alibaba stepped up advertising spend this yr amid sluggish consumption surroundings, in addition to heightened competitors within the e-commerce sector.

Earlier than turning to VAS section, let me share some preliminary coloration on the [TAM] coming into 2024. With the financial system in a state of transition and geopolitical uncertainty in 2024, the macro circumstances and consumption sentiments are turning even more durable to foretell. Regardless of restricted visibility of demand set as a result of macro uncertainties, we’re cautiously optimistic on additional restoration of our promoting enterprise in 2024. We hope to additional leverage tailwinds in Weibo’s aggressive sectors, in addition to a sequence of mega sports activities occasions. Our staff will beef up gross sales execution to additional unlock the long-term [indiscernible] alternatives, underpinned by our distinctive worth proposition and diversified content material ecosystem.

Worth-added service, VAS, income was $59.9 million within the fourth quarter, a rise of 4%, or 6% on a continuing foreign money foundation, primarily as a result of increased income contribution from game-related enterprise. Full yr 2023 VAS income decreased 6%, or 1% on a continuing foreign money foundation, to $225.8 million.

Turning to prices and bills, whole prices and bills for fourth quarter have been $317.8 million, a rise of seven%, primarily attributable to increased G&A bills. The rise of G&A bills was primarily resulted from decrease G&A bills booked within the fourth quarter of 2022, primarily associated to the reversal of compensation bills for Jiamian Know-how primarily based on the contingent fee association between us. Full yr prices and bills totaled $1.17 billion, a lower of 5%, primarily attributable to a positive overseas change affect on the reported numbers, in addition to a lower of personnel-related prices. This lower was partially offset by the rise of G&A bills, primarily associated to the popularity of compensation bills of Jiamian Know-how as talked about above.

Working earnings in fourth quarter was $145.9 million, representing an working margin of 31% in comparison with 34% in the identical interval final yr. Working earnings for full yr 2023 was $592.1 million, representing working margin of 34% in comparison with 33% in 2022.

Turning to earnings tax and the GAAP measures, earnings tax expense for the fourth quarter was $72.6 million in comparison with an earnings tax advantage of $18.7 million final yr. The rise was primarily as a result of 2 elements. First, we booked a reversal of tax liabilities acknowledged within the fourth quarter of 2022 associated to unsure tax positions. Second, we paid and accrued withholding tax associated to earnings remittance from the wholly-foreign owned enterprise, WFOE, to Weibo Hong Kong Restricted. The earnings distribution from onshore to offshore will fund our demand for U.S. {dollars} in enterprise operations and funds of dividends and debt, et cetera. Full yr earnings tax bills have been $145.3 million in comparison with $30.3 million final yr, primarily ensuing from improve of tax bills within the fourth quarter of tax expense.

Web earnings attributable to Weibo within the fourth quarter was $76.4 million, representing a internet margin of 16% in comparison with [30%] final yr, primarily because of the aforementioned affect from earnings tax. Web earnings for full yr 2023 was $450.6 million, representing a internet margin of 26% in comparison with 29% in final yr.

Turning to our steadiness sheet and money stream objects, as of December 31, 2023, Weibo’s money, money equal and short-term investments totaled $3.23 billion in comparison with $3.17 billion as of December 31, 2022. Within the fourth quarter, money supplied by working actions was $218.2 million, capital expenditures totaled $7.5 million, and depreciation and amortization bills amounted to $14.7 million. On a full-year foundation, money supplied by working actions was $672.8 million in comparison with $564.1 million in 2022. Capital expenditures totaled $36.8 million, and depreciation and amortization bills amounted to $58.5 million.

Earlier than turning to the Q&A session, I wish to let you recognize that we accomplished an providing of USD 330 million convertible bond in December final yr. The bond is because of 2030 with an annual coupon fee of 1.375%. We plan to make use of the web proceeds from the be aware providing to refinance a portion of the excellent 3.5% senior be aware due in July this yr. As a part of convertible be aware issuance, we may also successfully maintain [indiscernible] in US {dollars}, which supplies us extra monetary flexibility in capital allocation sooner or later.

Lastly, given our wholesome profitability and money stream era, we’re happy to announce that our Board of Administrators has permitted a particular money dividend of USD 0.82 per odd share, for ADS, to our shareholders. The combination quantity of the dividend will probably be roughly USD 200 million with the fee date anticipated to be in Could. Trying forward, we stay extremely dedicated to embracing long-term development alternatives, whereas producing extra returns to shareholders and boosting market confidence.

With that, let me now flip the decision over to the operator for the Q&A session. Thanks.

Query-and-Reply Session

Operator

[Operator Instructions] Our first query comes from the road of Timothy Zhao from Goldman Sachs.

Timothy Zhao

My query is relating to our promoting enterprise. May administration elaborate extra in your outlook for the promoting income development for this yr, together with the primary quarter? And particularly, relating to the promoting merchandise, what’s our key technique for this yr?

Gaofei Wang

Thanks for this query. So to begin with, as a result of in 2023, for a lot of completely different quarters, we had a whole lot of uncertainties for offering these explicit expectations. So we stay cautious and prudent in giving the expectations for the entire yr of 2024. So in Q1, we do see a restoration of virtually all of the industries. Nevertheless, nonetheless there are a whole lot of uncertainties and likewise challenges referring to the consumption market as a complete. Okay.

And likewise when it comes to the general demand, in 2024, nonetheless, we now have seen among the certainties for some industries, as an illustration, when it comes to the gaming — I imply, the sports activities, as an illustration, within the Olympics, which came about in July and likewise the start of August. So this has boosted among the price range of commercial for the consumption market, as an illustration, from the meals and drinks and likewise the apparels and likewise the footwear as nicely. So, in fact, in 2022, we had really a really excessive base due to the Asian Video games and likewise the World Cup. However nonetheless, we count on to have a greater second half of the yr in 2024 than the primary half of the yr. And likewise when it comes to the gaming, we do see a whole lot of uncertainties. So as an illustration, with the booming of the granting of licenses to these players — to the sport builders, we do — can leverage our benefits when it comes to the content material advertising, and we wish to leverage this benefit and likewise assist to discover and likewise assist a whole lot of new video games to be exploited. So in 2024, we count on to have a greater gaming {industry} than that of 2023. Okay.

And likewise in 2022, we did see the enhancement of our competitiveness and likewise the share of the advert price range in opposition to the overall income — in opposition to the overall price range of the advertisements of our clients is definitely rising as nicely. However nonetheless in 2024, whether or not these industries are nonetheless going to get pleasure from the identical momentum in Weibo, it’s just about unsure and likewise difficult. As an illustration, take the examples of the headsets and likewise the automotive industries. So, as an illustration, in 2023, we had an excellent development when it comes to the handset {industry}, which was double digit. And likewise, we had a rise of the overall advert price range share allotted to Weibo in 2023. However nonetheless, in 2024, we nonetheless stay cautious when it comes to sustaining the identical momentum of the expansion for the handset {industry} versus that of 2022. Nonetheless, we now have seen a better-than-expected cargo of the handset {industry} in Q1. However nonetheless all through the entire yr of 2024, there’s a huge uncertainty about this.

And turning to the automotive {industry}, we now have gained a pure benefit in serving to to advertise these merchandise of latest vitality autos. However nonetheless because of the worth battle and a price range decreased for the advertisements for the ICE autos, nonetheless we discovered it fairly difficult to keep up the identical momentum of the expansion of our enterprise within the automotive {industry} than that of final yr. However nonetheless, total talking, we’re nonetheless maintaining an excellent momentum of sustaining a really excessive competitiveness and likewise the attraction of a better price range of the advertisements from our clients. Okay.

And likewise, final however not least, I wish to share among the colours on the industries of the sweetness and beauty merchandise. In 2022 and 2023, we had suffered from among the challenges due to the {industry} itself. So in 2021, due to the COVID and likewise due to our excessive focus in selling the leisure and likewise the site visitors attraction, so we had a reasonably good yr in 2021 and likewise 2022. However fairly talking, there are a whole lot of challenges happening and headwinds happening within the cosmetics and wonder merchandise industries, as an illustration, the excessive competitiveness and likewise the value battle engaged by nearly all of the manufacturers. And likewise, they have been reducing their allocation of the advert price range, total talking. And likewise, you possibly can see that there are a little bit bit switch of the price range from the business or the normal e-commerce {industry} to the stay stream. So this gave us a whole lot of pressures when it comes to the allocation of price range to the brand-based efficiency, brand-based advert, or the e-commerce-based advert. So nonetheless, there are nonetheless a whole lot of challenges.

And likewise in 2024, initially, we want to have a stabilized efficiency of the sweetness and cosmetics {industry} and allocation of the advert price range. However nonetheless, in Q1, we thought that was lower than anticipated and likewise lower than optimum — and optimized. So you possibly can see that, for these worldwide manufacturers, nonetheless they’re a little bit bit far-off from their full restoration. And likewise, we do see the restoration of the home manufacturers, however nonetheless, it’s not the time for them to extend their advert price range. So in fact, total talking, we nonetheless want that we may have a really steady vertical just like the cosmetics and wonder merchandise. However nonetheless, thus far, we expect that this {industry} continues to be essentially the most difficult {industry} in opposition to our whole enterprise portfolio. Okay.

And likewise lastly, I wish to say that when it comes to the general technique, as we now have already acknowledged in our ready script, you possibly can see that our focus of this yr will probably be nonetheless emphasizing on these IP sizzling tendencies, and likewise the content material advertising in order that we are able to improve our competitiveness and likewise acquire more cash and likewise price range from the overall price range of our clients. And likewise, second of all, we wish to additional enlarge the consumer base and likewise the overall scale of that and specializing in these monetizable site visitors. In order a complete, in 2024, nonetheless very a lot focus and likewise the principle driver for us to develop additional is to getting extra price range from our clients and likewise thus we are able to develop our total enterprise.

Operator

The subsequent query comes from the road of Thomas Chong from Jefferies.

Thomas Chong

My query is about our methods in 2024 with regard to customers and our content material ecosystem. And then again, how ought to we take into consideration our AIGC methods?

Gaofei Wang

And likewise for this query, to begin with, let me discuss to you concerning the total consumer technique in 2024. So in 2024, nonetheless, we’re going to preserve the identical price range for the advertising actions that of 2023. So for the handset {industry} in 2023, we do see a lower of our whole shipments, however nonetheless we had a internet acquire of MAU of over 10 million and likewise over 5 million of internet acquire of DAUs due to a really deep strategic collaboration with the handset makers, so as to see that we are able to have a really low consumer acquisition value. And likewise, total talking, by specializing in the leisure and likewise the new tendencies and sizzling matters, we now have additionally an excellent positioning in getting the customers from exterior of the Weibo.

And likewise, in 2024, because of this, we had nearly a flat, or a little bit bit extra price range allotted to this space than in 2023. We do see an excellent restoration of the social sizzling tendencies and likewise the leisure {industry} and improved by the efficiency throughout the Chinese language New Yr interval. And so, thus, we’re very assured to have an excellent consumer acquire and likewise consumer scale in 2024 than of 2023 and likewise a a lot better one. Additionally, the interior challenges nonetheless are that, to begin with, we wish to concentrate on a shift of the site visitors of leisure and social sizzling matters to the verticals as a result of by having extra site visitors of the vertical or vertical traffics, we’re capable of improve the consumer stickiness and improve our monetization effectivity and likewise enhance our competitiveness. So earlier than the COVID, earlier than 2019, we had nearly 58% of our site visitors allotted to vertical traffics. However nonetheless, throughout the COVID interval, we had a lower to nearly round 47% to 48% by the top of 2022. We had an excellent technique to get well that after that, however nonetheless — it’s nonetheless at a degree of round 50%. So within the subsequent 2 to three years of time, by specializing in extra efforts taken on this space, we hope to extend the overall vertical site visitors because the — quantity of the overall site visitors to about 60% or extra in order that we’re capable of improve the consumer stickiness, the effectivity of monetization and likewise our total competitiveness as a complete. Okay.

And likewise referring to AIGC, we now have acknowledged a couple of feedback already up to now annual efficiency or among the quarterly efficiency bulletins. Nonetheless, now we wish to have openmindedness to make use of the LLMs and likewise specializing in the purposes of these giant language fashions. So as an illustration, in 2024, nonetheless we now have among the instructions of the appliance. To begin with, when it comes to the AI assistants, aiding the interactions between the brand new followers and followers and likewise the KOLs, we now have been doing quite a bit to essentially improve the interactiveness between the brand new followers and among the followers and likewise their KOLs. So now, you possibly can see that round 5% to 10% of the general interactions between the followers and KOLs are literally supported by the AI assistants.

And likewise second of all, when it comes to completely different verticals, so final yr, we just about centered on the verticals of magnificence and beauty merchandise and likewise to facilitating the era and the manufacturing of the content material on this space. And likewise this yr, we wish to additional broaden the appliance of the content material era to a different 4 to five completely different verticals. So final yr, 8% of the contents on this cosmetics and wonder merchandise space was generated by the AI instruments. And likewise this yr, we hope to have round 10% to fifteen% of the content material generated by AIGC facilitations, which continues to be difficult to say. And likewise for the opposite areas, as an illustration, the AI robots and likewise among the commercializations or monetizations utilizing AI to assist, it’s nonetheless in an experimental part. So we do not have a really detailed goal or a determine to be shared with everybody. Okay.

Operator

Our final query comes from the road of Xueqing Zhang from CICC.

Xueqing Zhang

We observed that the corporate introduced particular dividend this quarter. So with the capital allocation and shareholder return plan this yr, can administration share extra on the share buyback and dividend plan sooner or later?

Fei Cao

Xueqing, thanks to your query. That is Fei. As talked about in my ready remarks, Weibo maintained an honest profitability and comparatively robust functionality to generate working money flows. In 2023, our non-GAAP working earnings reached $592 million, representing a non-GAAP working margin of 34%. We generated working money stream of roughly $673 million in 2023, representing a year-over-year improve of 19%. So if you happen to can keep in mind final yr, once we distributed a particular money dividend for the primary time, final Could, we talked about sure ideas we might adhere to in use of our money. To begin with, we at all times prioritize supporting enterprise development and strengthening our platform’s aggressive benefits comparable to investing in content material ecosystem, in vertical areas and AIGC, and any alternatives which carefully associated to our enterprise. After which, along with investing in our personal enterprise growth, we actually want to make sure shareholder returns. In order you recognize, our Board of Administrators has permitted the distribution of one other $200 million particular money dividend, after we made the USD 200 million money dividend final yr. So going ahead, we count on to proceed paying out dividends to our shareholders and regularly formulate a brand new money dividend distribution coverage. The Board would primarily cite the dividend quantity primarily based on the — our firm’s revenue efficiency within the earlier fiscal yr, whereas additionally contemplating elements comparable to our money stream, our monetary situation and the capital necessities. So trying forward, we are going to proceed to discover numerous methods to reward our buyers, our shareholders, together with the dividend payouts and the inventory repurchases. These measures will probably be fastidiously thought-about and aligned with our core targets and topic to our Board approval. We are going to talk the progress with market and with our buyers in a well timed method. So I hope this may deal with your query.

Operator

There aren’t any additional questions presently. I wish to hand the decision again to administration for closing.

Sandra Zhang

Thanks all for becoming a member of us, and we are going to see you subsequent time.

Operator

That does conclude at present’s convention name. Thanks to your participation. It’s possible you’ll now disconnect your strains.