Weibo Corporation WB reported third-quarter 2019 adjusted earnings of 77 cents per share, which beat the Zacks Consensus Estimate by 2.7% and grew at the same rate year over year. Revenues of $467.8 million beat the Zacks Consensus Estimate by 0.1% and increased 1.6% year over year. At constant currency (cc), the top line improved 6%. Quarterly Details Advertising and Marketing revenues (88.2% of total revenues) increased 0.8% year over year to $412.5 million. Notably, Advertising and Marketing revenues from small and medium enterprises (SMEs) and Key Accounts (KAs) were $393.3 million, up 3%. KA ad revenues grew 6% year over year to $197.2 million on strong performance of the FMCG sector. SME ad revenues increased 1% year over year to $196.1 million driven by an increase in ad inventory.
Value Added Services (VAS) revenues (11.8% of total revenues) increased 8.6% year over year to $55.3 million on revenues earned from the live streaming business acquired in the last quarter of 2018.
Weibo improved its trend and topic products which enabled users to discover trends and hot topics more efficiently and participate in discussions. This has been instrumental in expanding the user base and enhancing user engagement. Month Active Users (MAUs) were 497 million in the reported quarter. The company added roughly 51 million users on a year-over-year basis. Mobile MAUs accounted for 94% of total MAUs. Average Daily Active Users (DAUs) were 216 million in the quarter under review. The company added nearly 21 million DAUs from the year-ago quarter. Additionally, Weibo’s collaborations with handset manufacturers to include content on the handset interface have helped it lower user acquisition costs. Operating Details Non-GAAP total costs and expenses increased 2% year over year to $277.5 million. While sales & marketing expenses contracted 8.3% to $129.4 million, general & administrative expenses surged 125.1% to $23.2 million. Additionally, product development expenses increased 4.2% year over year to $69 million. Adjusted EBITDA was $196.3 million, up 1.8% year over year. Adjusted EBITDA margin expanded 10 basis points (bps) year over year to 42%. Weibo’s non-GAAP operating income was $190.2 million, up 1.2% year over year. However, operating margin contracted 20 bps to 40.7%. Balance Sheet & Cash Flow Total cash, cash equivalents and short-term investments as of Sep 30, 2019, were $2.37 billion compared with $1.56 billion as of Jun 30, 2019. Net cash from operating activities was $164.8 million in the third quarter compared with $132.8 million in the preceding quarter. Fourth-Quarter Guidance Weibo expects revenue growth in the range of 0-3% year over year for the fourth quarter, on a constant-currency basis. The conservative growth outlook reflects macroeconomic headwinds and stiff market competition in the near term. Zacks Rank & Stocks to Consider Weibo currently has a Zacks Rank #3 (Hold). Alteryx ( AYX Quick Quote AYX - Free Report) , Cirrus Logic CRUS and Marchex MCHX are a few better-ranked stocks in the broader computer and technology sector. All three sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. While long-term earnings growth rate for Alteryx is pegged at 39.9%, both Cirrus Logic and Marchex’s earnings are expected to grow 15%. Free: Zacks’ Single Best Stock Set to Double Today you are invited to download our just-released Special Report that reveals 5 stocks with the most potential to gain +100% or more in 2020. From those 5, Zacks Director of Research, Sheraz Mian hand-picks one to have the most explosive upside of all. This pioneering tech ticker had soared to all-time highs and then subsided to a price that is irresistible. Now a pending acquisition could super-charge the company’s drive past competitors in the development of true Artificial Intelligence. The earlier you get in to this stock, the greater your potential gain. Download Free Report Now >>