Weibo Q1 Earnings Call Highlights

Key Points

• Weibo’s Q1 revenue rose 6% year over year to $421.3 million, driven by a 9% increase in advertising revenue as internet services, autos and local services fueled growth. Non-GAAP operating income was $119.8 million, but the operating margin narrowed to 28% from 33% a year ago.
• AI and video are becoming central to the platform’s strategy. Management said AI is already helping with ad generation, search and creator tools, while video engagement continued to grow at double-digit rates and remains a key priority for boosting retention and time spent.
• Costs rose as Weibo invested in growth initiatives, with total expenses up 13% and value-added services revenue falling 11% due to lower game-related revenue. Management also flagged macro uncertainty and industry competition as ongoing risks, even as the company maintained a strong cash position of $2.59 billion.

Weibo NASDAQ: WB reported higher first-quarter 2026 revenue as advertising returned to year-over-year growth, while management said the company is focusing on user retention, video consumption, artificial intelligence tools and content marketing to support longer-term growth.

Chief Executive Officer Gaofei Wang said March monthly active users reached 562 million and average daily active users reached 254 million. Monthly active users declined modestly both year over year and quarter over quarter, which Wang attributed primarily to Weibo’s decision to rationalize channel budget allocation and focus more on converting newly acquired users into active users. Daily active users increased modestly from the prior quarter, supported by retention among core users and growth in video content consumption, he said.

First-quarter net revenue totaled $421.3 million, up 6% from a year earlier, or 1% on a constant-currency basis. Advertising and marketing revenue rose 9% to $369.8 million, or 3% on a constant-currency basis. Non-GAAP operating income was $119.8 million, representing a 28% operating margin.

Advertising Growth Led by Internet Services, Autos and Local Services

Wang said Weibo’s advertising growth was supported by its positioning around “hot trends,” social networking and content marketing, including use cases such as new product launches, Chinese New Year campaigns, sports events and celebrity marketing. He identified internet services, local services and automobiles as key contributors to first-quarter growth.

Internet services saw stronger demand from AI-related companies during the Chinese New Year period, according to Wang, as large language model companies increased marketing investment. He said Weibo’s KOL ecosystem and technology-focused discussions helped meet advertiser needs around product launches, technology education and word-of-mouth building.

Wang said AI-related activity has also become a content driver on the platform. In May, the number of AI-focused professional content creators, the average daily number of AI-related hot trends and discussion volume for AI content all increased more than 30% compared with January, he said.

The automobile sector posted double-digit year-over-year growth, driven by favorable policies, new vehicle launches and stable spending around product launches, reputation building and brand awareness. Local services also grew quickly, supported by food-delivery competition and seasonal demand from the Chinese New Year holiday. Apparel and footwear posted double-digit growth, aided by Winter Olympics-related campaigns, sports and outdoor brands and celebrity endorsements.

Management also noted areas of pressure. Handset advertising grew modestly in the quarter, but Wang said rising chip and memory costs and intensified competition could pressure handset makers’ profitability and advertising budgets. The online game sector remained in decline due to a lack of major new releases, while value-added services revenue fell 11% to $51.6 million, primarily because of lower game-related revenue.

AI Used in Ads, Search and Creator Tools

During the question-and-answer session, Wang said AI has been effective for performance-based advertising, including ad material generation, eCPM improvement and recommendations. He said the consumption rate for AI-generated advertising materials had reached about 40%, and that the information-feed ad business saw double-digit growth in areas including eCPM during the first quarter.

Wang said Weibo is also testing AI tools for brand and content marketing involving KOLs and celebrities, though he said the company is not yet pursuing broad commercialization because it is still evaluating public acceptance of AI-generated content and advertisements.

On the product side, Wang said Weibo upgraded its intelligent search function from single-query question-and-answer summaries to AI-powered multi-turn follow-up queries, with the ability to understand multimodal content such as video, images and text. He said the company has also integrated AI Agent capabilities into scenarios such as public figure search and hot trend search.

For creators, Weibo has opened AI creation tools and copyright materials tied to more than 20 top-tier TV drama and variety show IPs. As of April, those initiatives had attracted nearly 3,000 creators and generated nearly 8,000 pieces of AI content, Wang said. He also said Weibo is building an AI content creation center to help selected creators generate text, images and video.

Video Remains a Key Engagement Priority

Wang said video is expected to remain a crucial driver of time spent and user retention in 2026. In the first quarter, total time spent on video playback pages grew by double digits year over year and continued to rise quarter over quarter. Per-capita time spent on video playback pages grew at an even stronger pace, he said.

Weibo’s video strategy is focused on distribution and supply. On distribution, Wang said the company improved recommendation conversion efficiency for videos in information feeds and trending feeds while reducing the weight of repetitive, low-quality and overly commercialized content. On supply, Weibo is investing to attract high-quality video creators and support content such as celebrity and top KOL vlogs, trending-topic analysis and derivative content tied to popular IP.

The number of top-tier accounts publishing original videos and the number of original video posts both recorded double-digit year-over-year growth in the first quarter, according to Wang. He said Weibo is also exploring short plays and video podcasts.

Margins Narrow as Investments Increase

In the financial review, management said total costs and expenses rose 13% to $301.5 million, mainly because of higher ad production costs and marketing spending, partially offset by lower general and administrative expense. The company said it continued to invest in advertising product capabilities, content marketing and client service offerings while maintaining a focus on return on investment.

Non-GAAP operating margin declined to 28% from 33% a year earlier. Net income attributable to Weibo was $91.9 million, with a net margin of 22%, and diluted earnings per share were $0.34.

As of March 31, Weibo held $2.59 billion in cash, cash equivalents and short-term investments, up from $2.41 billion at the end of 2025. Operating cash flow was $164 million in the quarter, capital expenditures were $11.9 million, and depreciation and amortization totaled $15.5 million.

The company said it completed payment of its annual cash dividend of $0.31 per ordinary share or ADS for fiscal 2025 in May, totaling about $150 million. Management said it will continue to balance shareholder returns with financial flexibility for product, AI and content ecosystem initiatives.

Management Cites Uncertain Macro and Industry Conditions

Looking ahead, Wang said advertising revenue remains tied to customers’ product launch cycles and marketing strategies, particularly in autos and handsets. He said new electric vehicle launches are increasing and that Weibo is positioned to support technology and new-energy vehicle discussions. For e-commerce, he noted a high base entering the second quarter, while for FMCG he said the company aims to capture opportunities related to World Cup activity later in the year.

Management described the first quarter as a period of “continued transition and steady execution,” while noting uncertainty around macro consumption sentiment and industry competition. The company also said MSCI upgraded Weibo’s ESG rating from BB to AA following publication of its fifth ESG report.

About Weibo NASDAQ: WB

Weibo Corporation operates one of China’s leading social media and microblogging platforms under the brand name Weibo. Launched in August 2009 by Sina Corporation, Weibo enables users to create, share and engage with short-form posts in real time. The platform supports text, images, videos and live streams, and offers features such as trending topics, hashtag campaigns and public discussion forums to facilitate user interaction and content discovery.

Weibo’s product suite extends beyond basic social networking to include digital content services such as live streaming, online games, value-added messaging and e-commerce integrations.

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