Weibo Q4 Highlights: 27% Revenue Decline, Margin Contraction Due To China's COVID Measures

Weibo Corp (NASDAQ: WB) reported a fourth-quarter FY22 revenue decline of 27% year-on-year to $448 million, missing the consensus of $448.69 million. Revenue declined 20% Y/Y on a CC basis.
Segments: Weibo's Advertising and marketing revenues fell 29.1% Y/Y to $390.54 million. Value-added service (VAS) revenues decreased 12.2% Y/Y to $57.45 million.
Advertising and marketing revenues excluding ad revenues from Alibaba Group Holding Limited BABA, were $348.3 million, down by 31% Y/Y, primarily due to disruptions in the company and its advertisers from COVID-19 control measures and infections in significant areas of China during the quarter.
Drivers: Monthly active users (MAUs) increased by 13 million Y/Y to 586 million in December 2022, while Average daily active users (DAUs) rose 3 million Y/Y to 252 million.
Margin: The non-GAAP operating margin contracted 200 bps to 34% as non-GAAP income from operations fell 30.8% Y/Y.
Non-GAAP EPS of $0.75 beat the consensus of $0.52.
Weibo held $3.17 billion in cash and equivalents and generated $158.7 million in operating cash flow.
"We navigated through the challenging 2022 with solid operating efficiency," said Gaofei Wang, CEO of Weibo. "Our community remained healthy and engaged, mainly attributable to the optimization of social product and effective channel investment. On monetization, our advertising business has exhibited recovery trend in the second half of 2022, although macro challenges continuously weighed on the overall advertising demand. We are pleased to see the operating efficiency that we achieved throughout this year, with non-GAAP operating margin reaching 33% for 2022. As we entered into 2023, we will embrace the broad recovery of the advertising business post China's reopening and drive value for our advertisers through our ecosystem based integrated marketing solution."
Price Action: WB shares traded higher by 3.38% at $21.38 in the premarket session on the last check Wednesday.

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