On Tuesday night, Weibo (WB +0.52%) reported results for the fourth quarter of 2017. The China-based social network operator exceeded its own revenue targets thanks to a surge in user additions.
Weibo's fourth-quarter results: The raw numbers
|
Metric |
Q4 2017 |
Q4 2016 |
Year-Over-Year Change |
|---|---|---|---|
|
Revenue |
$377 million |
$213 million |
77% |
|
Net income |
$131 million |
$43 million |
205% |
|
GAAP earnings per share (diluted) |
$0.58 |
$0.19 |
205% |
Data source: Weibo.
What happened with Weibo this quarter?
- Three months ago, Weibo set its fourth-quarter sights on sales near $360 million. The company exceeded that target by a fair margin.
- After adding 79 million net new monthly active users year over year, Weibo had 392 million active users by the end of December 2017. Sixteen million monthly users signed on in the fourth quarter alone, 93% of whom reached Weibo through their mobile devices, up from 92% in the third quarter and 90% at the end of 2016.
- Weibo counts its online advertising sales in two buckets: Chinese e-commerce giant Alibaba (BABA +0.82%) and everyone else. In the fourth quarter, Alibaba's revenue contribution grew 55% year over year to $38 million. For other clients, ad sales rushed 80% higher to land at $394 million.
Image source: Weibo.
What management had to say
"We are pleased to announce that we have achieved an important milestone as our total revenues for full-year 2017 surpassed $1 billion," said Weibo CEO Gaofei Wang in a prepared statement. "Weibo's powerful network effect combined with our continued user growth and user engagements as well as breadth of ad offerings have solidified Weibo as an essential element of mobile marketing in China."
Looking ahead
In the first quarter of 2018, Weibo expects to record revenue of approximately $340 million. Hitting that target would amount to a 70% year-over-year sales increase.
In order to keep the good times rolling, Weibo is negotiating partnerships with leading Chinese smartphone makers with the goal of giving users easy access to Weibo's social network right of the box for every new device. The company is also adding artificial intelligence smarts to improve users' individualized content feeds.
If that's not enough, Weibo is also investing in its short-form video-sharing platform. Expect the company to double down on its in-house content creation efforts as the video market matures.
