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SINA Smashes (Modest) Expectations on Non-Ad Growth

By Steve Symington - Aug 19, 2019 at 10:05PM

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Weibo and fintech products continued to bolster the Chinese internet media leader's results.

SINA (SINA) released second-quarter 2019 results on Monday. And while the Chinese internet media company's headline numbers might not drop any jaws at first glance, the expected struggles of its portal advertising business were nearly offset by the relative outperformance of SINA's supplementary operations and its Weibo microblogging platform.

That was enough to drive shares up more than 15% Monday in response. So let's dig deeper into what SINA had to say as it ended the first half.

SINA's results: The raw numbers


Q2 2019

Q2 2018

Growth (YOY)

GAAP net revenue

$533.1 million

$537.4 million


GAAP net income attributable to SINA

$51.4 million

$35.1 million


GAAP net income per diluted share




Data source: SINA Corp. YOY = year over year.

Three young people using smartphones and sitting on colorful beanbag chairs.


What happened with SINA this quarter?

  • On a non-GAAP (adjusted) basis, which excludes items like stock-based compensation, SINA's net income was $54 million, or $0.76 per share, down from $0.89 per share in the same year-ago period.
  • Adjusted revenue fell 1% (but would have climbed 5% had it not been for the negative impact of foreign currency exchange) to $530.4 million.
  • SINA does not provide quarterly financial guidance. So while we don't usually lend much credence to Wall Street's models, most analysts were looking for significantly lower adjusted earnings of $0.47 per share on revenue of $510 million.
  • Advertising revenue fell 5% year over year to $433.6 million, as a slight increase in advertising from Weibo (to $370.7 million) was offset by a 25.2% decline in portal ad revenue (to just under $63 million).
  • Adjusted non-advertising revenue grew 20% year over year to $96.8 million, led by Weibo's live-streaming business (which was acquired late last year) and higher sales from SINA's fintech businesses. Within the latter, SINA saw "robust" momentum from its micro-loan facilitation business.

What management had to say

During the subsequent conference call, SINA CFO Bonnie Yi Zhang noted Weibo's user growth "reaccelerated meaningfully" from last quarter; the site added roughly 21 million monthly active users in Q2 to bring its base to 486 million, and grew its daily active user base by 80 million to reach a total of 211 million.

"Leveraging our cluster of breaking news and social events initially released on Weibo during the quarter," she elaborated, "the strong user performance also pointed to the traction of our revamped user product, which empowers our community to more easily discover and consume relevant trends and topics and engage in public conversations of their interest."

Still, just as management predicted three months ago, SINA's portal ad business suffered amid ad-budget cutbacks from small and medium enterprise clients.

Looking forward

SINA did not provide updates to its full-year 2019 guidance, which was initially provided in March and calls for full-year revenue growth of 18% to 25%. Rather, as long as macroeconomic challenges restrain growth from its advertising business, management pledged to more tightly control costs on the portal side while potentially expanding investments in higher-potential market verticals like fintech and sports.

Still, given SINA's significantly better-than-expected performance in the second quarter -- even if it meant stepping over a relatively low bar -- it's hardly surprising to see the stock rallying as the market absorbs the news.

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