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Weibo Corporation (NASDAQ:WB)
Q4 2017 Earnings Conference Call
Feb. 13, 2018, 6:00 a.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:

Operator

Ladies and gentlemen, thank you for standing by and welcome to Weibo Reports Fourth Quarter Financial Results Conference Call. At this time, all participants are in a listen-only mode. We will be taking questions at a later stage of the call, at which time you will need to press "*1" to ask a question. Now I would like to hand the conference over to your first speaker for the day, Ms. Wen Li. Over to you, ma'am.

Wen Li -- Unidentified Company Representative

Thank you, Operator. Welcome to Weibo's 2017 Fourth Quarter Earnings Conference Call. Joining me today are our Chairman of the Board, Charles Chao, our Chief Executive Officer, Gaofei Wang, and our VP of Finance, Fei Cao. The conference call is also being broadcasted on the internet and is available through Weibo's IR website.

Before the management presentation, I would like to read you the safe harbor statement in connection with today's conference call. During the course of this conference call, we may make forward-looking statements, statements that are not historical fact, including any statements about our beliefs and expectations. Forward-looking statements involve inherent risk and uncertainties. A number of important factors can cause actual results to differ materially from those contained in any forward-looking statements. Weibo assumes no obligation to update the forward-looking statements in this conference call and elsewhere. Further information regarding this and other risks is included Weibo's annual report on Form 20-F and other filings with the SEC. All information provided in this press release is occurring as [inaudible] and Weibo assumes no obligation to update this information except as required under applicable law.

Additionally, I'd like to remind you that our discussion today includes certain non-GAAP measures, which excludes the 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 financial excludes certain expenses, gains or losses, and other items that are not expected to result in future cash payments or that are non-recurring in nature and will not be indicative of our core operating results and outlook. Please refer to our press release for more information about our non-GAAP measures.

Following management's prepared remarks, we will open the line for a brief Q&A session. With this, I would like to turn the call over to our Chief Executive Officer, Gaofei Wang.

Gaofei Wang -- Chief Executive Officer

Thank you. Hello, everyone, and welcome to Weibo's Fourth Quarter and Full-Year 2017 Earnings Conference Call. On today's call, I will share with you key updates on Weibo's user growth, product development, and monetization, review the progress that we have made in 2017, and share with you our strategic plans for 2018.

Let me first discuss fourth quarter financial results. We continued to see strong revenue and user growth in the fourth quarter of 2017. Our total revenue reached $377.4 million, up 77% year-over-year. Advertising and marketing revenue reached $332.3 million, up 77% year-over-year, with a 79% of our revenue coming from mobile. Non-GAAP net income was $146 million, up 90% year-over-year.

Weibo's total revenue for fiscal year 2017 reached $1.15 billion, up 75% year-over-year, which was expected to grow since the IPO. Advertising and marketing revenue reached $996.7 million, up 75% year-over-year. Non-GAAP net income reached $405.7 million, up 121% year-over-year.

Weibo's robust revenue growth and operating efficiency in 2017 derived from the following three areas. First, continuous user growth and the diversifying social product features have made Weibo the primary channel for advertisers to execute their social marketing campaigns. Second, as a result of our efforts to further improve user engagement at Weibo and enhance our content distribution system, we offer a full spectrum of advertising and marketing products and solutions tailored to different customer segments, from individuals to SMEs to key accounts. This increases customers' recognition toward Weibo's social marketing ability and overall value proposition. Lastly, Weibo's social network effect has been further optimized in 2017, effectively enhancing our operating efficiency and monetization.

On the user front, Weibo's monthly active users reached 392 million in December, up 25% year-over-year. Average daily active users in December reached 172 million, up 24% year-over-year. In December, 93% of all Weibo's MAUs were mobile. In 2017, our mobile MAUs increased nearly 79 million and the daily use increased 33 million, representing larger user base increase than in 2016.

Throughout 2017, Weibo's position as the leading social media platform in China has been further solidified and the competitiveness of Weibo's system continues to improve, even under the increasingly competitive Chinese mobile internet market. Weibo provides a platform for millions of users to discover information, share and express their views, and engage in conversations about topics of their interest. At the same time, Weibo presents a medium for a large number of content creators to display their talents to the world and utilize the platform to monetize the content being created and ultimately capitalize their personal value through the fans they have accumulated.

In discussing our operational update for the fourth quarter, I will cover Weibo's progress in the following areas. As a reminder, the ecosystem of Weibo's platform is developed around three core components: users, content, and customers. Our regularly growing user base enables content creators to continuously build social assets and leverage our continuously improving product to pursue their monetization aspirations. This promotes the creation of higher quality content that has been shared and distributed on Weibo. Attracting more users, sparking conversation and the distribution and thereby increasing our user base and user engagement, these social and interest networks formed by the users then add as a distribution channel, through our services and the product to help us establish more effective connections between our users and the customers, increasing Weibo's marketing effectiveness. As these three components come into play and support one another, Weibo continues to increase in size and value. Fourth quarter strengthened our competitive position in the social media industry.

My operational update will elaborate on these three areas. On the user growth front, we see that the growth of the mobile internet user has become fruitful in 2017 as we are facing an increasingly competitive landscape. However, as our network, in fact, further expands and the social platform feature continues to strengthen, we were able to leverage and strengthen Weibo's competitive advantage in user acquisition to support further user growth. On the [inaudible], our strategic cooperation with smart phone manufacturers and top apps continued to deepen, benefiting from our growing marketing and the product integration, as well as resource exchanges. As a result, we have maintained a relatively lower user acquisition costs than those of our peers, even under the current competitive market conditions.

Throughout 2017, we increased our strategic efforts and investments in user product development to improve user engagement. As we gather more data from user interests and their social behaviors, our strategy to reinvest in machine learning has begun to scale and we continue to see the benefits from this investment. In December 2017, on Weibo's MAUs, the number of recalled users increased over 50% year-over-year.

On the product level, the competitive landscape toward interest-based information feeds and the use of short video has increased in the mobile internet industry in 2017. Those have been the key drivers for user growth and also will be our main focus around partner development in 2018. We completed structural change on Weibo's core information feed product in 2017 to include both social relationship-based information feeds and interest-based information feeds on the home timeline of Weibo's app. Relationship-based information feeds now prioritize content based on the photo interactions and the timeliness of content distribution, whereas interest-based information feeds are generated through user imprint on the content consumption. This trend is important to us and it has further enhanced Weibo's immense competitive advantages in the social media industry.

In 2017, we found Weibo's interest-based information feeds peaked in popularity among users to consume content. In December, the number of users who refreshed interest-based information feeds and the interest-based information feeds that were refreshed nearly doubled from last year. This has helped us rapidly enter the news media market and we have noticed a rise in the retention and engagement of users who used to be less active. Moreover, increasing the exposure of content from news media and the top content creators in interest-based information feeds enables more exposure of UGC in relationship-based information feeds. This will promote more UGC at Weibo, construct more user social relations, and strengthen our social attributes.

Moreover, we have increased our investment in UGC short video product in 2017. The scale of UGC short videos has increased the products that have Weibo stories. In December, the number of users who post to Weibo stories daily increased sequentially by more than 50% and the Weibo stories and their use have maintained rapid growth. In 2018, we will increase our investment in the UGC short video product, in effect optimizing Weibo's story content creation experience. We will focus on enhancing the user consumption experience of UGC short video using our information feeds, allowing Weibo to be more competitive in the market and better promoting user growth in lower-tier cities.

In 2018, we plan to increase our investments through the following strategy. First, we will deepen our partnership with the smart phone manufacturers, TV programs, and top apps. In addition to pre-installing the Weibo app on our smart phone, we plan to expand the collaboration and content to increase the efficiency in user acquisition. Second, we'll increase our investment in machine learning to improve the position in matching user interests to recommended accounts and the content and optimize content consumption experience for users with a learning level of engagement so as to further increase user engagement. Third, we will continue to increase our investments in products to strengthen our social attribute. That said, we will further enhance the social content production and maintain the user social relations as our top priority for content distribution to amplify the social features of the platform and to differentiate ourselves from the market.

In 2018, given the current competitive landscape, we believe the investment will expand the scale of our platform, enhance our social network effect, and balance the Weibo support over the long-term.

Turning to content, short video remains as the top priority for us this year. We foresee video to become the primary media format for our users to record, share, and communicate with one another. In 2017, short videos continued to grow rapidly, reaching more users than ever before. The number of videos shared and the views also grew meaningfully. In December, short video posts and short video views doubled from last year. One of our key focuses in 2017 was promoting the growth of the short video to strengthen our partnership with the top self-media accounts and the major media IP content organizations, working collaboratively to improve Weibo's short video content ecosystem in addition to encouraging top self-media accounts to produce more video content. We are supporting them through better traffic distribution and accumulating social assets. In December, daily short video posts from top self-media accounts grew by more than 50% year-over-year.

Second, Weibo's partnership with large media and IP content organizations have generated impressive results. For example, Weibo has become the main online platform for traditional media in China to distribute their content. Partnering with the media, such as the CCTV and People's Daily to promote nightly the CCTV national congress. During the nightly CCTV national congress, short videos posted by state media were 35% of the total content posted and related short videos reached around 3 billion views.

In entertainment vertical, in 2017, we partnered with seven top TV channels and three online video websites based on IP content of TV series and variety shows, successfully promoting various TV series and variety shows, including "The Rap of China" and drama series such as "Day and Night." In December, short videos related to TV series and variety shows grew by more than two-fold, allowing Weibo, TV channels, and online video websites to effectively partner and to collaboratively deliver content, further reinforcing Weibo's leadership in the entertainment vertical.

As we noted last year, one of our focuses has been further verticalized content, building stronger engagement through our [inaudible] level. By December, we have partnered with more or less 1,300 MCNs, growing by nearly MCNs from last quarter. In December, the number of top content creators, daily posts by top content creators, and the monthly views all maintained rapid growth from last year. Moreover, the monetization of the self-media continued to thrive on Weibo's platform in 2017. Advertising, social comments, and the pace of [inaudible] are the three main ways for top content creators to monetize on Weibo. And in 2017, their monetization scale nearly doubled year-over-year, supporting self-media accounts to accumulate social assets, allowing them to monetize, but more importantly add an incentive for them to continuously produce higher quality content to generate stronger engagement with fans, which in turn raises user engagement on Weibo.

For example, the e-commerce vertical has developed rapidly through three years of operation and the TMV generated from Weibo for fiscal year 2017 grew by over 70% year-over-year while the fans and fan engagement also grew accordingly. The improvement of our monetization ecosystem not only increases the engagement of top content creators, but also increases the fan base and the engagement. When the model is replicated in other verticals on Weibo, both the user scale and the user engagement in these verticals will further increase, impacting Weibo's competitiveness as a social media platform and the monetization potential. Moving forward, we will strive to enable more self-media accounts to monetize, thereby reinforcing Weibo's ecosystem.

In 2018, we plan to optimize our content ecosystem through the following strategies. First, we will continue to deepen our partnership with the content channels, such as variety shows, TV, news media, and competitive verticals. In securing top IP and the copyrighted content will enhance Weibo's competitiveness in premium content consumption. Second, we'll continue to operate by verticals to expand the scale of top content creators and increase their engagement to maintain Weibo's core competitiveness in the content ecosystem. Third, we will continue to increase the user base and improve the user experience of our content product matrix so as to enable users to efficiently express and explain themselves. The best in content will not only help us build a stronger content ecosystem and strengthen Weibo's competitive edge as a social media platform, it will also help us expand the horizon of the content consumption market and broaden our product offerings.

Lastly, turning to monetization, we achieved a strong revenue growth in the fourth quarter. In the fourth quarter, key accounts and revenue and the number of customers have continued to grow rapidly. Key accounts customers grew by 34% year-over-year while key accounts revenue grew by 106% year-over-year. This year, the scale of key accounts customers and ARPU have both grown meaningfully, driven by the Weibo's viral platform effect and the strong influence of [inaudible] on KOL. As a result, we will have become the primary channel for new advertisers to tap the social marketing campaign while importantly incurring customers, Weibo becomes the long-term marketing partner to further explore the cooperation in social marketing. For example, Samsung initiated a campaign targeting young Chinese users to [inaudible] CA in the fourth quarter. According to Ad Master, collaborating with three young celebrities combined with Weibo's influence on the viral nature of the short video, Samsung's brand satisfaction rose by 100%, purchase income rose by 138%, and recommendation in turn rose by 117%. Our brand advertisers have also become more diverse. In addition to strong [inaudible] advertising growth, we saw noticeable growth in auto and mobile in the advertising segments, further growing the key accounts revenue increase.

Turning to SMEs, in the fourth quarter, SME revenue increased 64% from the prior year, where customers grew 31% year-over-year. The growth was mainly driven by the continuous enhancements we have made on our advertising platform. For example, we implemented the negative feedback strategy, providing users with the ability to comment on advertisements, ultimately leading advertisers to improve their ad quality. Moreover, we implemented a dynamic analog strategy to optimize the user consumption experience. Based on the specific user's engagement level and the specific ad's interest, we address a specific ad exposure to the user. By applying the new strategy, we saw [inaudible] experienced a double-digit decrease and moving forward we will implement this strategy to cover our core feeds. Our goal is to better manage our ad products to improve our efficiency. In the fourth quarter, ECPM and engagement rates have continued to rise from the last quarter.

As I have mentioned before, self-media grew rapidly in 2017 and we will continue to support this growth in 2018. As KO advertising has become an important portal for social marketing, we will embrace more self-media in our monetization ecosystem, focused on innovating ad products and the content and the video we distribute. We believe the mutual beneficial relationship between the self-media advertising and our existing advertising both help advertisers to reach more of the right users, enable the coverage of marketing a wider spectrum, and supports Weibo's monetization ecosystem.

In 2018, we plan to increase the competitiveness of Weibo's ad products through the following strategies. First, we will increase our investment in user product to drive more user engagement on Weibo and enhance our social viral network effect. Second, we will further increase our customer base through educating them about successful case studies of Weibo's social marketing. At the same time, we will continue to innovate and optimize our well-run set of social marketing products, focusing on rising variety, set accumulation, and app conversion. Both will help to raise Weibo's value and competitiveness and further scaling customer growth.

Third, we will continue to enhance our ad algorithms. After Super Fanstop was released, we have noticed there is still a lot of data to mine and the motion learnings improvements we can make to enhance advertising efficiency. At the same time, we will step up our cooperation with third parties to continue to improve photo interest graphs of our users and optimize our measurement system, further increasing advertisers' recognition of the value of Weibo's social marketing. Fourth, we will further combine high-quality content creators, such as celebrities, content producing organizations, self-media, and the media alike to launch a well-established monetization ecosystem that delivers better content, drives innovative new advertising formats, provides monetization value of the content, and expands Weibo's quality app inventory.

Overall, heading into 2018, we expect to face an increasingly competitive landscape in the mobile internet industry with mostly certain international competitors. Therefore, we will significantly increase our investment into market channels, content ecosystem improvement, and expanding our product offerings. All of this may come as a short-term impact toward our margin expansion. However, we are certain that the investment we commit will be critical for expanding Weibo's platform and the market share. At the same time, this will help us more in the short video market, enhance our network effect, and ensure Weibo's competitive edge to grow in the long-term.

With that, let me turn the call over to Fei Cao for a financial update.

Fei Cao -- Vice President, Finance

Thank you, Gaofei. Let me go through our financial highlights. For the fourth quarter of 2017, Weibo's total revenue grew to $377.4 million, up 77% year-over-year, exceeding the prior year's guidance. Non-GAAP net income attributable to Weibo was $146 million, up 90% year-over-year. Non-GAAP diluted EPS were $0.64 compared to $0.34 a year ago.

With revenue peaking in our high season Q4, we delivered adjusted EBITDA of $161.9 million, up 107% year-over-year, and adjusted EBITDA margin was 43% compared to 37% last year. We are also pleased to announce that we have achieved an important milestone, as our total revenue for full-year 2017 surpassed $1 billion to $1.15 billion, up 75% compared to 2016.

Our [inaudible] businesses put together represented 92% of Weibo's advertising value. Each grew [inaudible] in 2017 at 85% and 73% year-over-year respectively. Non-GAAP net income attributable to Weibo was $405.7 million for 2017, up 121% compared to 2016. Non-GAAP diluted EPS was $1.80 compared to $0.82 in 2016. Adjusted EBITDA was $471.3 million, up 143% year-over-year, and adjusted EBITDA margin was 41% compared to 30% in 2016.

As a result of our continued efforts to drive revenue growth and operating efficiency, we continued to expand our margin throughout 2017. We delivered non-GAAP net margin of 35% for the year compared to 28% in 2016. Factoring in the high income tax rate we had to pay in 2017, the 7% increase in net margin once again demonstrates the strong operating leverage of Weibo as a unique and dependable social media platform.

In 2018, we will continue to drive operational and financial improvements across our business and we are confident that we are positioned for long-term growth as our users, content creators, and customers continue to scale up.

Now, let me give you more color on our fourth quarter revenue. Advertising and marketing revenue for the fourth quarter grew to $332.3, up 77% year-over-year. Mobile ad value in Q4 was $262.9 million, up 105% year-over-year, representing 79% of our total ad revenue. Weibo continued to capitalize on rapid growth of the mobile advertising market in China, with 94% of mobile MAUs. We are leveraging our robust ecosystem of users, content providers, and advertisers to deliver a strong value proposition to each participant. This powerful network effect combined with continued growth of Weibo's user base and user engagement has solidified Weibo as an essential element of mobile marketing in China and further strengthens Weibo's leading position in the social media industry at large.

Total advertisers in Q4 remained stable compared to Q3 and up 31% year-over-year. It is worth noting that Q4 is peak season for major e-commerce sales in China. Our SME advertisers have remained relatively stable and have continued to effectively compete for inventory with e-commerce big brand advertisers.

Moving on to SMEs. In Q4, Weibo's SME ad business delivered revenue of $156.6 million, up 64% year-over-year, continuing strong momentum throughout 2017. Revenues from both channel and [inaudible] had strong growth year-over-year. Key industry sectors contributing to strong revenue growth include ad downloads, e-commerce, and [inaudible].

Weibo has been able to attract more long-term SME customers to our platform. As Gaofei mentioned, with the introduction of Super Fanstop in late August in 2017, we have further optimized the advertising system to include an active feedback strategy and a dynamic analog. How can we make our ads more relevant and effective? The optimization also helped encourage SMEs to increase the quality of their ads and help advertisers show their ads to people who are likely to spend more with them. This is an important improvement to us. We want to make sure that every dollar from our advertisers' budget is well-spent.

Moving on to KAs, our key accounts business, made up of mostly large brand advertisers, is another pillar of Weibo's growth engine. In Q4, our KA value is $127.4 million, up 106% year-over-year. The number of KA customers reached another historical high, growing 35% year-over-year in this quarter. Socials ads are continuing to grow and are becoming a must-have to many of our advertisers. As more KA customers see the impressive results from their Weibo social marketing campaigns, more brand advertisers have recognized an increasing marketing value gain through Weibo's unique content, innovative social nature, and the benefit to attract long user engagement.

This year, we have made continued efforts in diversifying our ad offerings and promoting celebrities and the [inaudible] on Weibo have also emphasized the impact of social ads. Weibo has also become a top promotion channel for [inaudible], helping to increase brand affection in the quarter for promoted products. Revenue attributable to Alibaba was $38.4 million, up 55% year-over-year. As pointed out in our first quarter conference call, we are a key platform for Alibaba in the fields of e-commerce, marketing, [inaudible] action. Alibaba continued to be a key strategic partner given its ad spending as well as the value derived from other areas of Alibaba's business, including social e-commerce, payment solutions, entertainment, and videos. This continues to be a strong partnership and we are confident in its continued success for driving value for both Weibo and Alibaba.

Value-added service, revenue was $45.1 million in Q4, up 81% year-over-year. Membership fees, which include individual membership and enterprise account verification, was up 117% year-over-year, and the fees for licensing was up 37% year-over-year. The top gatherer made up more than 15% of Weibo's VAS revenue.

Turning to costs and expenses, total net costs and expenses were $220 million, up 58% year-over-year, primarily due to increased marketing and development expense as well as higher turnover tax, which is related to revenue growth. In Q4, we continued to focus our efforts to drive user acquisition and retention. As such, sales and marketing expenses grew at a faster rate compared to Q4 2016, basically attributable to increased internal marketing funding and brand promotion of Weibo Stories.

Moving forward, as we think about user acquisition and retention over the longer term and the competitive landscape, we plan to be more aggressive in user acquisition and retention in multiple channels in 2018. We believe this strategic reinvestment will enable us to solidify our market leadership as a top social media platform in China.

This quarter we also stepped up our spending on R&D, mostly on user video experience optimization. As a technology-driven company, Weibo will continue to focus on developing innovative user and ad products as well as facilitating a better user experience.

Non-GAAP operating income was $157.5 million in Q4, up 114% year-over-year. Non-GAAP operating margin in Q4 was 42% compared to 35% last year. Our non-GAAP operating margin for full-year 2017 was 40% compared to 27% last year. As Gaofei mentioned, our current and relatively high profit margin provide Weibo with the flexibility to further invest in user scale and build a higher threshold for the content ecosystem. We expect our non-GAAP operating margin for the full year of 2018 to maintain a similar level or to be slightly better compared to 2017.

Income tax expense was $17 million compared to $15.5 million last year, primarily due to tax deduction expiring in 2017. Non-GAAP net income attributable to Weibo in Q4 was $146 million, up 90% year-over-year.

Turning to our balance sheet and cash flow items, as of December 31, 2017, Weibo's cash, cash equivalents, and short-term investments totaled $1.79 billion compared to $396 million as of December 31, 2016. Aside from earnings, the increase in cash, cash equivalents, and short-term investments was also attributed to the net proceeds we received from the issuance of $900 million convertible senior notes.

For fourth quarter, cash provided by operating activities were $198.3 million, capital expenditures totaled $9 million, and depreciation and amortization expenses amounted to $4.5 million. We delivered free cash flow of $189.3 million for the quarter, representing 149% growth year-over-year, surpassing the growth rate in net income. This further demonstrates the strong operational leverage and unique platform business features Weibo has enjoyed.

According to our ADR depositor forum, as of December 31, 2017, approximately 28% of Weibo's shares outstanding were represented by [inaudible] shares, 85% of which was considered floating share.

Turning to Weibo's first quarter 2018 guidance, we have adopted new revenue standards, ANC606, revenue from contracts with customers, which took effect on January 1, 2018, that plans to modify [inaudible] measure. Under the new accounting standard, we are required to report our revenue, net of value-added tax, and to recognize value generated through [inaudible] sections. With our preliminary assessment of the new accounting standards, the aggregate impact from the changes will not be material to our financial statement as a whole. By applying the new accounting standard, we estimate our first quarter revenue to be between $335 million and $345 million, which assumes an exchange rate of 6.50 RMB to $1.00.

With that, let me now turn the call over to the operator to begin the Q&A portion.

Questions and Answers:

Operator

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. If you wish to ask a question, please press "*1" on your telephone and wait for your name to be announced. If you wish to cancel your request, please press the "#" key. Please note, while asking all of the questions, please ask the questions in Chinese first and then ask again in English. Once again, please ask your questions in Chinese first and then ask again in English.

The first question comes from the line of Juan Lin from 86Research. Please ask your question.

Juan Lin -- 86Research -- Analyst

And management, thanks for taking my questions and congratulations on another strong '17 results. I have two questions. The first one is on our user matrix. I noticed that in 2017, we added 33 million DAUs and 75 million MAUs. I'm wondering if whether the net growth of user numbers in 2018 and going forward will be stabilizing at the current level. This is the first question. And the second question is on monetization. Now that [inaudible] has been already available for both KA and SME advertisers, I'm wondering what is the current ECPM of this versus last quarter and Q4 2016 and what is the outlook for ECPM for 2018? Thank you.

Gaofei Wang -- Chief Executive Officer

I think everybody knows the competitive landscape in the China mobile internet industry has significantly changed in the last year and the rising cost for user acquisitions through the handset manufacturers has been well-noticed in the marketplace. However, because Weibo had a long-term relationship with the handset manufacturers, top APPs, and the TV stations and other long-form video companies, we have a very unique position in the marketplace to negotiate the right costs to work with on the user acquisition front.

You look at the base number of our users, we understand it's getting harder, from a percentage point of view, to grow the new users. And this is also reflected on both the fresh new users and the recalled new users. However, our monetization capability has been rising in the last couple of years as well so we are confident that the monetization we can get from each user can well cover the costs to be incurred in the new user acquisitions.

As I indicated in my prepared remarks, we already made really good progress in the recalled customers in 2017. So heading into 2018, this is one of the areas we will continue to focus our efforts. I think on one side, because we are a social media platform, we are sort of at a natural advantage in terms of connecting and recalling customers back. And on the other side, our capability in machine learning enhancement, as well as our expansion in the video experience, also helps us to attract our users back to our platform.

I think there are two sets of ECPM worth noting. One is related to those, we'll call it pure media property. For example, the launch page ECPM. The other sets are the news feed, the feed ECPM. You look at the pure media ECPM, compared to other competitors in the marketplace, we have a certain price advantage over that. With the growing base of our users, we intend to increase our ECPM on that front in 2018. On the feed ECPM, as we introduced the Super Fanstop in the marketplace in the late third quarter last year, we have better matching with our inventory and our customer demand. And then we anticipate the ECPM for the feed in 2018 will continue to rise in the foreseeable future.

Juan Lin -- 86Research -- Analyst

Thank you, Gaofei. Very helpful.

Operator

Thank you. The next question comes from the line of Alicia Yap. Please ask your question.

Alicia Yap -- Citigroup -- Analyst

Hi. Good evening, management, and congrats on another strong set of results and thanks for taking my questions. I have a question related to the 1Q guidance. So can you explain a little bit more about the new accounting standard? Your 1Q guidance actually implies currently about 68% to 70% year-over-year growth. What will be the like-to-like growth rate if we were using the previous standards? And then related to the 1Q, can you also give us some color on the ultimate growth drivers? Will that mainly be driven by the increase at budget from the existing customer or are you actually growing more SME customer based or is it more driven by technology improvements that allow the customers to achieve it more efficiently and also leading to the higher ECPM? And then any benefit you expect to get from the Chinese New Year Gala as well as the Winter Olympics? Thank you.

Bonnie Yi Zhang -- Chief Financial Officer, Sina Corporation

Hey, Alicia, this is Bonnie. For your first question, I think in Fei Cao's prepared remarks, we made it very clear that the aggregated impact from the accounting changes on the revenue line is non-material to the financial statement as a whole. If I want to expand this a little bit, there are two parts of the new accounting standard that will have impact on Weibo moving into 2018. One is the value-added tax. Historically, we are using gross method recording whereby our revenue had included the value-added tax. With the new accounting standard, now we are required to report revenue only through a net form. That means that part of the value-added tax will be taken directly out of the revenue. So that's one part.

The second part is the accounting for the amortizing barter transactions. Prior accounting required no barter transactions can be recognized if a fair value cannot be determined in the marketplace. However, the latest new accounting standard has updated that with a transaction sort of model, where a company is required to recognize barter transactions based on a transaction sort of arrangement. With that, we anticipate we have to report the barters in 2018. But the net of these two components, they are offsetting each other because one is to reduce your revenue, the other is increasing your revenue. That's why we said that the aggregated impact from such changes would not be material. So if you're using the old method and the new method, you are coming to a very similar result for two sets of accounting standards. Hopefully that answered your first question.

The second is on the driver part. I think you already mentioned a number of those drivers as you asked the question. There will -- I don't think that there's one single set of drivers that will be predominant compared to the others. So it's a mix issue. So on the key accounts side, we're probably talking more on our budget shifting. While on the SME customer side, we're talking about more customers, a larger customer base, we're talking about higher bidding activities on the platform, so that we're anticipating the rising of the ECPM as more bidding is available to us. So I don't think we'll single out a particular component that would be the only set to drive the revenue growth. We're talking about multiple elements.

Your third question is on the Gala. Chinese New Year Gala and the Winter Olympics. You want to go ahead?

Gaofei Wang -- Chief Executive Officer

If you look at the past three years, our Q1 performance, you might be noticing that Q1 represents a very important quarter for us for acquiring new users. This is a quarter we generally work with CCTV 1 for the Chinese New Year Gala and through the Red Envelope and the participation in the Chinese New Year Gala. We expect to attract a significant portion of our new users during the year. As you may know, Weibo was the only social media partner to the CCTV 1 for the last couple of years. And even the Gala is going to happen in three days, even prior to the Gala, there are a lot of pre-events that are going on right now and we already see pretty good pick-up in new users. We're hoping this year it will be another good quarter for us to attract and to retain our users. And the Chinese New Year Gala, the collaboration between Weibo and CCTV, hopefully will become another successful event for both parties.

Alicia Yap -- Citigroup -- Analyst

Great. Thank you.

Operator

Thank you. Now I would like to hand the conference back to the speakers. Please go ahead, ma'am.

Wen Li -- Unidentified Company Representative

That concludes today's conference call. Thank you for joining us, everyone. Thank you.

Operator

Thank you. That concludes the conference call today. Thank you all for your participation. You may all disconnect the lines now. Thank you.

Duration: 66 minutes

Call participants:

Wen Li -- Unidentified Company Representative

Gaofei Wang -- Chief Executive Officer

Fei Cao -- Vice President, Finance

Bonnie Yi Zhang -- Chief Financial Officer, Sina Corporation

Juan Lin -- 86Research -- Analyst

Alicia Yap -- Citigroup -- Analyst

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