Weibo's 2023Q4 Earnings Report: Revenue Finally Returns to Growth, but Profit Performance is Poor, Growth Dilemma Remains Unresolved

In mid-March, Weibo released its Q4 2023 earnings report, reporting revenue of $463.7 million, up 5% YoY, slightly better than the market expectation of $442.2 million.$Weibo(WB.US) $NASDAQ Composite Index(.IXIC.US) $Dow Jones Industrial Average(.DJI.US) $Direxion S&P 500 Bull 3X(SPXL.US) $Hang Seng Index(00HSI.HK) $Invesco QQQ Trust(QQQ.US) $TENCENT(00700.HK) $Bilibili(BILI.US)

1. Summary of Personal Views

1. Compared to the continuous decline in revenue in previous quarters, Weibo at least achieved YoY revenue growth in Q4, showing slight improvement overall. However, profitability fluctuated significantly due to the consolidation of subsidiary financials.

2. From a business perspective, Weibo's core advertising and value-added services improved this quarter, but overall growth still lags behind other internet peers, making future development challenging.

3. Before Weibo finds a strong new growth driver, a full turnaround in performance will be extremely difficult. Additionally, risks for Chinese concept stocks remain high, so I personally do not recommend holding.

Overall, Weibo achieved YoY revenue growth in Q4 with slight improvement, but profitability fluctuated due to subsidiary consolidation. While core advertising and value-added services improved, growth still trails peers, making future development tough. Without a strong new growth driver, a performance turnaround is unlikely, and Chinese concept stock risks remain significant. Thus, I remain cautious about holding Weibo.

2. Financial Analysis: Revenue Growth Returns, but Profitability Weak

In terms of revenue, Q4 revenue reached $463.7 million, up 5% YoY, slightly better than the expected $442.2 million. Compared to previous quarters of YoY revenue decline, this quarter saw rare growth due to improvements in core advertising and value-added services.

In terms of profitability, Weibo's Q4 net profit was $83.2 million, down from $158 million YoY. EPS was $0.34, slightly below expectations. On a Non-GAAP basis, adjusted net profit was $76.4 million, down from $179 million YoY. Non-GAAP diluted EPS was $0.31, down from $0.75 YoY. Simply put, profitability dropped sharply this quarter, mainly due to the consolidation of MaskTech's financials.

3. Operational Breakdown: Profit Volatility, Core Advertising Improves but Still Weak, User Growth Steady

1. Profit Volatility

Amid stagnant revenue growth, Weibo has been controlling costs to improve profitability. However, this quarter's financial consolidation led to significant deviations from past trends.

Specifically, Q4 costs and expenses totaled $344.7 million, up 20% YoY from $287.5 million, but this increase wasn’t entirely due to operational spending. Last year’s administrative expenses were lower, and MaskTech-related compensation changes also contributed. Despite higher costs, Weibo maintained a healthy operating margin through effective cost management, demonstrating financial discipline. Adjusted operating profit was $145.9 million, down slightly from $152 million YoY, with an adjusted operating margin of around 31%.

2. Core Advertising Improves but Still Weak

Weibo's core businesses—advertising and value-added services—both grew YoY this quarter. Advertising revenue reached $403.7 million, up 3.4% YoY, remaining the main revenue driver. However, growth still lags behind peers like Tencent, Kuaishou, and Zhihu. Auto and mobile ad revenue grew YoY, while gaming and healthcare ads saw double-digit growth, showing diversification efforts.

3. Steady User Growth Continues

Weibo's user activity remains on a growth trend. MAUs reached 598 million by Q4 end, up 11 million YoY, while DAUs hit 257 million, up 5 million YoY. However, both MAUs and DAUs declined slightly QoQ (from 605M to 598M and 260M to 257M, respectively), indicating retention challenges. Weibo is strengthening content ecosystems (e.g., tech, auto, gaming, beauty, healthcare) to boost engagement. Value-added services revenue grew 4.3% YoY to $59.93 million, driven by gaming, signaling modest diversification progress.

This is my personal earnings analysis, based on my own research. Feedback is welcome. This does not constitute investment advice—please conduct your own due diligence.