SINA Corp. (SINA +0.00%) presented results from another better-than-expected quarter on Tuesday morning. The company sustained last quarter's torrid rates of growth thanks to the continued strength of micro-blogging site Weibo, as well as improved monetization and user growth from its core portal and media businesses.
With shares up nearly 7% today in response, let's take a closer look at how SINA finished the year, and what investors can expect from the Chinese web giant in the coming quarters.
IMAGE SOURCE: GETTY IMAGES
SINA's results: The raw numbers
| Metric |
Q4 2017 |
Q4 2016 |
Year-Over-Year Growth |
|---|---|---|---|
|
GAAP net revenue |
$503.7 million |
$313.4 million |
60.7% |
|
GAAP net income attributable to SINA |
$45.4 million |
$19.9 million |
128.1% |
|
GAAP net income per diluted share |
$0.60 |
$0.27 |
122.2% |
DATA SOURCE: SINA CORPORATION
What happened this quarter?
- On an adjusted (non-GAAP) basis -- which excludes items like stock-based compensation -- SINA's net income was $60 million, or $0.79 per share, up from $19.9 million, or $0.29 per share in the year-ago period.
- SINA exceeded analysts' expectations for revenue of $484.3 million and adjusted earnings of $0.79 per share.
- Advertising revenue climbed 58% year over year to $424.8 million, driven by 77% growth in Weibo advertising and 16% growth in portal ad revenue.
- Adjusted non-advertising revenue climbed 85% to $76.4 million, driven by new revenue from Sina's online finance business, Weibo membership fees, and live-broadcasting revenue.
- Weibo added 79 million monthly active users, bringing its total to 392 million in December 2017. 93% were mobile users.
- Generated cash from operations of $76.3 million.
What management had to say
SINA chairman and CEO Charles Chao stated:
"We closed 2017 with another strong quarter, capping off a remarkable year of growth. Weibo's momentum continued on the back of sustainable user growth and engagement. We have also made progresses in machine learning capability, content distribution efficiency and advertising system upgrade, which further fueled the strong growth of Weibo. ... For SINA business, we are delighted that it returned to the growth trajectory in 2017. Through improvement in content offering and effective channel marketing, SINA mobile media properties continuously expanded user scale, and improved user engagement and elevated monetization capability.
Looking forward
Chao further elaborated that in 2018, both Weibo and SINA will continue to drive user expansion and engagement while simultaneously investing in bolstering their content ecosystems, social media market share, and opportunities to further diversify revenue streams and monetization.
"For our emerging fintech business," Chao added, "we will navigate through the new regulation landscape and aim to achieve growth through diversified product offerings in 2018."
As such, for 2018, SINA anticipates revenue of between 14.5 billion renminbi and 15.5 billion renminbi, or roughly $2.23 billion to $2.38 billion at current exchange rates. That would produce nearly 46% year-over-year growth at the midpoint, and sits well ahead of analysts' consensus estimate of $2.15 billion.
In the end, SINA investors couldn't have hoped for a stronger finish to 2017, let alone one followed by guidance for an equally impressive 2018. So given that its shares had pulled back in recent weeks along with the broader market, it was no surprise to see SINA rallying again today.
