Q2 2021 Weibo Corp Earnings Call
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Good day and thank you for standing by welcome to the Weibo reports second quarter of 2021 financial results conference call. At this time all participants are in listen only mode. Now so the speaker's presentation. There will be a question and answer session to ask a question. During the session you need to press star one on your telephone and things.
Be advised that today's conference is being recorded.
If you require any food assistance. Please press star zero now like to hand, the conference over to your first speaker for today Ms. Flores Sun. Thank you. Please go ahead.
Thank you operator, welcome to Weibo's second quarter, 'twenty or 'twenty, One earnings conference call joining our call today, our Chief Executive Officer, Godfrey Walton and our Chief Financial Officer Phase out. The conference call is also being broadcast on the Internet and there's a billable through Weibo's IR website before the management.
Remarks, I'd like to read you the safe Harbor statement in connection with today's conference call. During today's conference call. We may make forward looking statements statements that are not gets particle facts, including statements of our beliefs and expectations.
Looking statements involve inherent risks and uncertainties.
Important factors could cause actual results could differ materially from those contained in any forward looking statements. We assume no obligation to update our forward looking statements in this conference call and elsewhere.
Other information regarding this and other risks is included in Weibo's annual report on form 20-F, and other filings with the SEC all the information provided in this press release is occurring as of the date hereof.
We will assume no obligation to update such information, except as required under applicable law. Additionally, I like to remind you that our discussion today includes certain non-GAAP measures, which excludes stock based compensation and certain other expenses, we use non-GAAP financial measures to gain a better understanding.
Of Weibo's comparative operating performance and future prospects, our non-GAAP financials exclude certain expenses gains or losses and other items that are not expected to result in future cash payment or non recurring in nature, we're not indicators of our core operating results and outlook. Please.
First of all our press release for more information about our non-GAAP measures. Following management's prepared remarks, we'll open the lines for a brief Q&A session with this I would like to turn the call over to our CEO Godfrey Walton.
But all claimed 10 job he bought Avi. Thank you Hello, everyone and welcome to Weibo's second quarter 2021 earnings conference call and should have all of it or something like that.
Tony.
In Q2.
You're talking about from an agenda on Covid.
Today's call I will share with you highlights in Weibo's user product and monetization in the second quarter of 2021.
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On the user front Weibo's MAU reached $566 million and average he's raised 246 million and June 2021, adding approximately 43 million and 16 million users year over year and quarter over quarter, respectively, which represented the highest net addition number among the reasons.
Four quarters.
June 94% of Weibo's Meus came from mobile.
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Are you meeting on the monetization from leveraging further optimization in our competitiveness strategy and add product offering supporting industries. Our total revenues reached 574 I believe in the second quarter, an increase of 48% year over year advertising and marketing revenues.
Raised five countries and $2.3 million, an increase of 47% year over year, 94% of our AD revenues came from mobile our non-GAAP operating income in the second quarter reached $223.2 million.
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Next let me elaborate on the progress made in the areas of product and the monetization in Q2.
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On the product front, starting from 2021 with further enhance weibo's differentiated 10 patents in key features such as social functions and how trends coupled with effective channel strategies, we have further growing our user base and engagement.
While well be thoughtful investments in video products three fourth users mindset of using Weibo home video posting in consumption. So as we enhance our product competitiveness.
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The channel brand with backup all we're channeling investment was focused on improving user engagement leveraging weibo's advantage in user acquisition costs. Meanwhile, really enforced the synergy between channel investment and subsequent content consumption, and thereby improving user engagement and retention with battery consumption experience.
And spend and retention of our China users were setup cooperation with major channel partners, such as handset manufacturers and operators in the area of social features how trans and vertical content measure in the second quarter.
He was a tall such partnership which will not only increase weibo's user acquisition scale for a major channels and elevate our brand new for us, but also create synergies to both parties ecosystems, which enabled us to further strengthen our partnership.
Result, the number of users we acquire from channel partners more than doubled in children year over year was nice user engagement levels.
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I'm a product brown I would like to share with you our key initiatives, our weibo's information feed and need you on information fees. Our core strategy in 2021 is to enhance labor.
Social features and competitiveness and thus drive user's thickness and interactions among weibo's core user group.
The relationship based feed in the second quarter with further strengthened the data mining and distribution bulk quality social content and thus improve our content diversity in the consumption of an experience with stronger social attributes, we're pleased to see significantly higher social interaction level, leading to better consumption in Europe.
Based on our relationship based fee.
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Yourself, our Super toddler product continue to grow rapidly in the second quarter, particularly we're encouraged to see notable growth in verticals, such as gaming TV series and variety show and campus, etc. Demonstrating users robust demand the interest based social front the super topic products has now the only.
Drilling users' social statements on Weibo, but also shed light on our roadmap to further optimize our paid product.
But he said basically in the second quarter. Thanks to pack optimization, our recommendation system will give more weight to video content in content distribution for interest based feed to further serve users consumption. We're testing a new Virgin net interest based feed based on the revamped video recommendation system.
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The onshore videos in 2020, one we focus on accelerating the contemplated amortization for Weibo's content creators through our video accounts program and stuff increased video content generation and consumption. Meanwhile, well exercise on cultivating users' mindset of using Weibo video consumption through constant.
Migration in key verticals leveraging ongoing progress made in our video accounts program. We are pleased to see the further visualization trend among concentrated as is true the number of registered video accounts surpassed the 10 million Mark.
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Over 30000 already had more than $1 million as a result, the number of original video submission under the video account program more than doubled quarter over quarter. The substantial growth in video not only enable us to enhance video content exposure and consumption and core fee, but I'll.
So help us to continuously optimize our recommendation capabilities around video content and that's.
To further improve the overall video distribution efficiency, especially in video community and the video recommendation fees currently well pleased to see an upward users' consumption. That's in our video community and the video recommendation fees compared with the end of last year, which also broke off the increments.
It'll add inventory in video recommendation fees on lifetime will launch the feature of drive my client spending in the first quarter and are continuously refine it functions. We're encouraged to see a wider recommendation among weibo's top content creators on the product in the second quarter pulp media agencies and a number of kols.
We have already used this feature for regular content generation compute up high Pes and abuse bank statement as such format nature could we expect when we lower the barrier of video and live streaming generation products traditionally tax picture based alpha looking forward, we will step up our investment around COVID-19.
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Let me share with you more color on our monetization strategies and the progress made this quarter in 2020. One we will further strengthen our competitive edge of our social AD products solidify our industry specific marketing capabilities and unleash the potential and the efficiency of traffic monetization, so actually improve weibo's.
Monetization scale in a market competitiveness to jump on here aren't you don't need one o'clock.
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From an industry perspective, our AD revenues increased 47% year over year in the second quarter benefiting from the recovery of overall market demand as well as improvements in our industry specific offerings for key sectors, leveraging our unique competitive edge in the market will continue to deliver.
Our robust year over year growth in key sectors for example, SME Cte sectors, such as food and beverage and beauty and personal care book solid growth in the first half of the year builds upon years of experience in these key sectors and our platform value proposition Weibo has developed a unique marketing.
Playbook and refine our service capabilities and thus continuously improve our AD performance. In addition to the conventional brand industry. We have also beef up our capabilities to serve the brand plus performance marketing needs effect, such as gaming and e-commerce with a further synergies as our.
Sales and operation teams, our AD offerings, and our service earn better recognition among customers leading to strong growth in both the branding and the performance driven AD dollars from these key sectors.
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AD product front in the second quarter will continue to erase weibo's differentiated content marketing offerings, while optimizing feed AD product to enhance our monetization efficiency on content marketing in 2021, apart from sectors, such as LPG automobile and a cell phone will have also.
Gradually extended content marketing to the gaming industry, which used to be a purely performance driven sector. We help customers drive more topic discussion around their new landscape as well as accumulate social assets and engagement.
As a result, we're successfully tapped into higher at wallet in the gaming sector as best content marketing offerings resonated greatly with customers' needs. For example have four months, where upon launch of the blockbuster game, most would accumulate the views and discussions around related topics ratio around five.
Building and over one 3 million respectively.
Our stuff is official accounts increased by nearly three times within half a month.
<unk> content marketing AD offerings, effectively entice customers to raise their brand and content budget on weibo.
I'll feed AD product leveraging refined traffic distribution capabilities, we can better match traffic higher conversion potential with performance driven industry. So as to maximize our feed monetization efficiency. Moreover, we continue to improve our tech capabilities of AD products for performance based <unk>.
Three such as gaming and e-commerce, leading to our notebook growth E. CPM of each of these industries on an annual basis.
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Each of them. So some of the UGC Dolby vision next let me share our thoughts on the regulatory impact, but I think the overall advertising industry in the first half of 2020 Watt government departments have gradually tightened regulation and allows us to bring AD format, and we have taken a proactive approach in product revenue.
Vacation accordingly in the short term, we expect that such rectification may impact on our last spring campaigns upstart and performance driven customer bad debt as a weibo revenue contribution from performance based large screen AD is relatively low and the impact on our overall advertising revenue is <unk>.
But we also believe that our industry norm on AD format workforce related to the healthy growth of Internet companies in the long run with such standards gradually affected and implemented in the income.
Higher market also let's talk about the education in a content contract stuff more rigid compliance requirements facing the overall internet industry. The tightened regulation on K 12 educators it impacts all of their marketing demand with top tier education customers cut back or even sees their campaigns.
That's that the education sector, only took less than 2% of our total AD revenue in the first half of the year as best our race is Pilgrim's is quite limited.
In light of recent policy.
We'll take steps to further optimize our sales structure for customers in the internet sector and beef up our efforts to tap into the incremental AD wallet of the emerging consumption economy.
Finally, we point it out to Apple's new idea for a policy as a potential headwind last quarter and let me give you an update so far leveraging model training and optimization. Our alternative approach delivered a solid attribution results and thus have earned recognition among our customers gradually.
As such the impact from <unk> way changes has been less about widely feared as well as our own expectations.
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Lastly, let me take this opportunity to share with you the momentum we've seen during the recent Tokyo Olympic games, leveraging weibo's unique positioning to serve the public conversation and our massive user scale. We're encouraged to see strong momentum in key metrics, such as how trends topic of discussion and engagement house athletes.
Built upon years of calculation on our sports ecosystem around Aslib media and professionals Weibo has become the go to platform for Chinese Olympic team to drilling and for our users buying a media update and discuss around Olympics related topics as a result, where it was.
He is traffic and action all reached record high in July 2021, giving us confidence in further reinforcing our competitive mode based on our unique value proposition.
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Furthermore, on the monetization front, we are delighted to see the solid momentum in the first half of the year continuing into the third quarter for instance, our differentiated social marketing playbook by sharing how trends and isolates the endorsements resonated greatly with the Olympic games sponsors, especially I think.
Which enabled us to capture higher brand plus performance at customers and their wallets was such good momentum, we are well positioned to tap into incremental market opportunities in the second half of the year.
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Central Gulf pick and Hello, everyone.
Welcome to the second quarter of 'twenty kind of that earnings conference call.
Let's start with user metrics.
In June trying to tell you what we.
We bought <unk> and average daily use.
The first time to the $66 million and $246 million, respectively, both the past and with the peak level in March 'twenty hunting during the pandemic outbreak.
On annual basis, we had a net addition of approximately $43 million I mean use.
And the SEC 10 million Teu.
Notable acceleration compared with Plavix with her.
Leveraging our strength in serving public conversation initiative with our video product as well as in fact with the China investment.
Turning to financials.
Amanda My prepared remarks will focus on non-GAAP results and all the comparison on a year over year basis, unless otherwise noted.
Now, let me walk you through our financial highlights for the second quarter of time anytime you want.
Well it was second quarter time, Youre talking about math revenue were 574.5 million an increase of 48 port that is.
Beating the high end of our guidance.
Operating income was 220.312 million, an increase of 83% representing operating margin of 39%.
Net income up tripled to LIBOR <unk> hundred and 82.8 million.
The increase of SEC tape outset, representing a nice margin of 32%.
Diluted EPS was <unk> 19 was sorry it was.
17 life as compared to 15, five in second quarter plenty plenty.
Now, let me give you more color on revenue.
Weibo's advertising and marketing revenue for the second quarter plenty plenty, what equates to 47%.
So $502.5 million mobile AD revenue well for five of the $17.3 million accountability approximately 94% of total AD revenue up from 18, 8% last year.
On top of good use of momentum way.
We bought the Levered jaw AD revenue growth with monetization scale reached a record high.
We're delighted to see broad based strength across key where they call it.
In terms of revenue contribution are.
Our top three verticals well FMC G e-commerce.
Great food products.
Leveraging the E Commerce peak season.
Revenue for us is unique value proposition to advertisers in studying very integrated branding plus performance needs.
That tap into incremental AD wallet.
Please pillar industry.
In terms of growth.
The fastest growing vertical with luxury I'm, sorry C products.
Weibo has become the go to platform fully expect her to capture the hearts and minds of generation Z users, who hold that lacks the generation of consumption power in China.
From the AD product perfect here.
Mortgage fees continues to be the largest part followed by social display ads and other AD offerings, such as promoted chats and topics.
Our profile, our social marketing products delivered a competitor of ours and it resonated greatly with breadth and the more test leading to a healthy growth for each of these product categories.
In particular.
Revenue was from promoted chats and the topic products.
Continued to lead growth among major AD product with.
With customers embracing the sweet spot of our traffic and utilized the differentiated a native AD format for Brad is holger.
Interests, the cultivation and the towers yet.
Additionally, they also delivered robust the video AD growth built upon a higher penetration of video content and ongoing optimization of video ad offerings.
Overall speaking we have case, the best current demand versus supply and that mix, where our AD revenue was driven by both incremental money pet both traffic and the post it here, but you say patent trend.
Over a year basis.
AD revenue from Alibaba for the second quarter, an increase of 12% to $14 million.
Moderate slowed out in terms of growth rate.
As communicated earlier asked and from Alibaba highly correlated to its own marketing strategies and that may fluctuate quarter to quarter.
That's at our cooperation with Alibaba positions us well to capitalize ongoing digitalization trend and the jetblue value for brands and the more tests on both platforms.
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Increase of 54% primarily attributable to the revenues derived from the interactive Entertainment the company acquired in November 2020.
Asking crazy revenue generated from our gaming business.
Turning to cost and expenses total cost and expenses for the second quarter was $351.2 million an increase of 32%. The increase was primarily due to step up in marketing spend and higher personnel related costs.
Operating income in the second quarter and closed 83% to 203, one to a meeting.
Operating margin was 13, 9% up from 31% last year.
Leading our expectation.
We're pleased with further operating efficiency achieved by our platform. This quarter and we are focused on keeping good balance between investment for growth and margin performance for the company's development in the long run.
Turning to income tax under GAAP income tax expense for the second quarter was $46.9 million compared to $14.7 million last year.
Net income attributable to label in the second quarter was up 182, 8 million, representing a net margin of 32% compared to 30% last year.
Turning to our balance sheet and personal items.
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Honeypot anyway, Weibo's cash cash equivalents and short term investments totaled $2.9 billion compared with great. One 5 billion as of December 31 plenty plenty.
This was primarily resulted from investment activity that may occur during the first half of 2021 and was partially offset by cash provided by operating activities.
In the second quarter of 2021 cash provided by operating activities was 94 million capital expenditures totaled nine points past meeting and depreciation and amortization expenses amounted to $13.6 million.
Lastly.
Let's talk about our financial outlook.
Anticipate our third quarter of <unk> revenue to increase by 20% to 25, such that year over year constant currency basis.
Facebook has also reflects weibo's current and preliminary view and is subject to change.
With that let me now protocol over to the operator for the Q&A session.
Yeah.
Thank you.
Later to ask a question you'd be depressed part and the number one on your telephone to withdraw your question. Please press the pound or hash key.
Please standby, while we compile the Q&A roster.
Once again these best Taiwan for your questions.
The first question is from the line up with Thomas Chong of Jefferies. Your line is open. Please go ahead.
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Management and operating my questions and congratulations on another strong set of results and strong our revenue guidance.
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So thank you very much up for your questions. So let me first of all answer the question about the drivers of the growth in the second half of this year. So as you can see that even though we had the factor that last year, we had a pandemic and they'll base number was pretty low. However, if we're talking about the year on year performance comparing with the same period in <unk>.
<unk> thousand 19, we still enjoining, 36% to 40% of the growth and also in Q1. We are also accelerating the growth overall speaking as a result, but you're going to see is that I'm talking about our strong abilities, especially talking about the commercial marketing capabilities and especially we have the marketing strategy of focusing on the content.
And hotel paid marketing and also the combination of brand and performance. So what do you guys see that enormous all industries, we enjoy pretty good growth on the app.
And especially you know in FMC G, which is a very promising industry, we enjoy over 50% of the growth and also in those not that promising kind of industries Brooks I'll point digital and also automobile. So we enjoy 50% more growth. So as a result, what you can see is that when you really focus on a lot.
Sales and also products as well and especially publishing those industries. The great demand of combination synergy between brand and performance as well. So this particular method has been a highly recognized by the customers.
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And also a second of all I would like to comment on the other aspects, especially talking about inventory and also the product of the us. So we can see is that in the remarks, we already mentioned that in the first half.
Actually a very good inventory created God, the because of the increase on the video part and the video consumption and also the AD load et cetera of that particular, new inventory is very hot and also another thing is that for the Tokyo Olympics, which happened in July and also August what you can see is that we reach the <unk>.
Historical high and also a peak on the topic and data and also this particular topic is still increasing even after the pandemic I mean Olympics and also this is a very good direction for the future and also sort of all we are talking about the kind of products. So not only we are talking about the particular AD products also combining.
AD performance and also the branding as well, but also we're talking about the marketing related ads for brand and content as well. This has been also highly recognized by our customers and also becoming one of the major drivers for our further growth.
Okay.
Jamba for me anytime.
Charbonneau Museum equation with Sean from Australia.
Sure. So you do that.
Harold <unk> Kumar <unk> 13 National Mi and those that are going on show with electrification Yoshi human syndrome, he or she.
<unk> seen a shrunken show with me, it's a huge Oklahoma, Oklahoma tiny achievable. Fortunately so here how many of the easier in Q3 revenue.
Yes.
Good day, Bushnell golf content in Q2 with him.
Toby Bosher back from Europe, partnering with somebody from the future.
Hmm.
And also a wood you're going to see is about the price. So things the second half of last year or what you can see is that we were increasing the demand from the core industries and also because of the improvement of our since we don't have 30, where you can see that the performance increase and also talking about those others.
Our performance driven.
Industries like gaming and also e-commerce, because we have optimized our technologies and also service provided we can see a very good growth on the ECM and especially in joining a double digit growth on the ECM alright.
Alright.
Okay.
<unk> seven inhibition in Ghana to garner issue.
Yes sure.
Okay.
Sometimes I'm sure kind of there.
Revenue on the corporate or even whether you talk to your policy.
During the shutdown the contacts.
And to the Ocean.
Okay Andrew.
Competing.
Usually the articles corner.
Okay jumping.
Yes.
And also as you have talked to us about some factors happening in the second half.
Especially to the education Ministry and also real estate. So of course that it is true that we have been seeing a decrease over the planning on the customers in those industries in terms of their marketing plans.
As I have already stated for example, agitation industry on accounted for about only less than 2% of our total product. So I think that this particular impact was pretty much controllable.
Okay.
Meanwhile, Joey cutting bar and Grill Panda chemical and introduce your grades are comparable to what you think the.
Thank you for your time.
Due to the shutdown.
Sure with us on the coal co founder Dr. Byrne from LIBOR, Susan Jiang what are kind of on a woman.
Oh cool.
So you can change languages semiconductor character.
Sure.
You show your thoughts on the coming about what can be done.
Sure.
Okay.
And also lastly, talking about the flash.
Flash ads or pop up ads, so I think that.
It is true that the ratification of this pop up ads really had a big impact or some of the impact over the whole industry, including Weibo. So mainly reflected in the factor that the click rate actually has been reduced and also that is primarily impacting.
Impacting and influencing those customers with the performance oriented plan.
However, what you can see is that our major customers are still focusing on the branding and also the final effectiveness. So they would like to tell more about exposure rather than the clicks.
And also a percentage wise is pretty much limited. So as a result, I think that the impact is pretty much within the control of scope.
Okay.
So only board Susan gentlemen, I don't want <unk>.
And we tend to do.
Well she consequentially.
And I believe we're talking about kind of paying some of the telecom gone up for China.
Sounds good too unusual format.
London essence, you tell me in terms of material.
No woman to the entire two one leverage on that kind of on your <unk> polymer in Fujian and Guangdong motion fusion.
<unk> shown the type and whatnot.
Chinook.
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The tables on account.
I think that's the important OXXO assortments actually being able to call. It this year couldn't have done that.
Hmm mm.
And also a problem the weibo's own perspective, I think that in the guidance that are covering the Q3 performance. We have already I know truthfully, we reflected and also evaluated the most strict regulations happening now in the education industry and also the pop up AD industry. So that it is.
Say that you know are without.
Without those kind of effect as we should've been enjoying a higher and stronger growth in Q3, and also second half of 2021.
However, still from the Weibo's perspective, we're going to continue the optimization of our AD model, especially when I'm talking about.
The pop up ads, we're going to have a better research over the new models and also the new recommendation algorithms for example try to minimize the impact to the lowest level. So while of course that those kind of our plans are still in the implementation and research in place so that we're not showing them in the new <unk>.
<unk> for the future growth.
Okay. Okay.
Thank you and congratulation again.
Yeah.
Thank you. Our next question is from the line of IDEXX call Morgan Stanley. Your line is open.
Please go ahead.
She said want anytime you want you're going to see way more challenging.
Not women.
Gotcha.
Going through your accelerates so anytime soon okay Sunshine challenge and shoot about Europe comes.
Comes out at you shed some color on Julian shop onion.
Women's homes, yet so we don't a reporter gene touched on a bunch of engines.
Switching went took a day women shop on it.
Yeah sure.
Sure well.
Let me translate into English. So thank you management for taking my question and congrats on the solid results. So on the user front, we had a strong quarter with accelerated pace of growth can management share what we have observed quarter to date and the expectation in the following quarters. We're also aware we bought recently.
Launched a rectification on fandom, so how would that impact the user growth and traffic in the second half of this year.
<unk>.
Yeah.
Susan since you're having someone in Oklahoma machining.
I told you about such as who choose opinions chances are you'll kind of scrutiny in China will continue.
What's your comment <unk> hinder you from into Peru.
The wound GE booth.
That's very helpful.
Our income above which Alex on the ATP.
Some of them.
Pushing Greenwood <unk> in Canada.
Okay.
It won't be a kind of English coming in from Gucci clearly what it was really the children.
Zynga something like on the shutdown phase them in future of course, you don't have too many of that Alitalia honestly. It wasn't good identifying that don't hit it Hooping me, what you're going to be.
You mentioned that you were trying to come in Georgia, there sure.
For me.
Hum.
And also first of all I'd like to comment on the very first part of the question, especially you know we're talking about.
The growth in the <unk>.
Talking about our traffic and also the future users. So since Q4 of last year. We have already stated that we are going to invest and also focus more on the user's acquisition as well as the years as a cost cost of acquisition and then also the retention as well so first of all.
In terms of the channels, we have been collaborating more widely with those different brands and also operators as well as the other apps. So the user volume from this particular channel has been increased core about two times and also.
Next thing is that you know in terms of the strategy optimization as well as our improvement over the user retention et cetera, we have been reducing the overall cost of the user acquisition. So as a result, we can see is not a significant increase in terms of investment paid into this particular area.
Okay.
I mean for me and I know in the home.
Oh contacts come your choice of opinion, and essentially the big and tall cotton being called into question.
Whether you go to that portfolio income.
Okay.
So we feel like I'm not trying to go the extra day in Shanghai.
Oh man, that's going to go quickly.
So people are counting with Shanghai to recreate.
Again, the Shoal Creek.
Chicago Gartner picking up all the time.
It won't be a critical and valuable shut off what should you know who they're going to call. The question.
Okay.
So we are kind of evolving with it years until that issue off the country's figure that women don't hear that kind of on the <unk> portfolio.
No the street on wave, one which meant that from Oklahoma Central Louisiana I don't know if you took all those ships.
And I'll say the way, both with Houston, and Washington, Thats using pool.
Revenue for telecom sheet.
With our tissue that agenda.
And also.
Well, we can see is that talking about the products. So as we have already stated that because of the generation of the interest fees and also the super topic and also growth on that as well as the very good growth over the relation ship based feed we can see is that we have further improved the activity and engagement.
Users as well as the total kind of a user numbers.
For example, because of the hot topics and also some of the big events happening or we can see is that comparing with those platforms offering short videos all on videos on Weibo. We can have a better attention tracked to the customers and also users and also we are going to trigger a better discussion and why did this.
Question and more focus on Weibo on those super topics and imported beds. So that is the result that after the analytics, where you can actually do have a very good retention of the users and also a very good increase on the usage volume.
Well, what we can see is that we can forecast a pretty good results. In this particular area in Q3 and also your going forward. So I'm better to say that even though weibo already had a pretty high internet penetration. However, still we think it's quite promising <unk> grow the user and also the <unk>.
Our retention in the second half and also in the medium to long term.
Alright.
So we went on an inch.
One is on oxygen.
Hmm.
And <unk> bookings I think I'm Gonna finally, Archie Goldman clinical about Sunshine and women to enable our children.
Shinhan aren't you do hear the R&R Archie do we assume kind of the 20 <unk>.
Ascension, the ECF resilient because of children and women that assumption.
Okay, Shanghai <unk> most of the bulk of its upon Cleveland Gluttony, EG Greenwashing tiny tumor nalco combination wage.
People can die from China.
The other one.
Two machine.
Jim how about question kind of downtime between unions one surgeon.
As of April Q2, you mentioned.
I'm going to have.
John here.
And also second of all you have mentioned something about the eradication of the fandom. So what we can see is that if you pay close attention to the announcement made by Weibo, we do not start paying attention to this particular, Panama reputation starting from this year, but after you know from 2012.
Q2, where it started to pay attention and started ratification over to send them. In this particular industry. So that is to say that so you know for example, we are already changing and adjusting the operation.
All of this particular area, especially if we're managing those.
Athens Madison.
Our funds as well so we are encouraging more kols to really participate in those sort of charity programs and activities as well as those positive energy oriented activities. So that is to say that as of.
Medium of last year until as of now we have been already publishing over 40 different announcements of the working related to the ratification of the sign up.
Then the cheaters battery Doctor <unk> session times are you won't come in.
Each of the people working on it.
So it's a woman to Infineon Cindy you know how he is with us.
And they put the 10 P M.
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Shifting to ensure no search.
Search Union Siobhan, yet, but you know how many and when the time.
Gonna be tomahawk.
Your bulk water in China, each year since we don't have a plenty of country and told me about at home as well.
What's your true those Obama Europe Assembly at Arizona opinion bouncing back into the center of all of that in the Fisher.
Jinyan arguably you're talking about by powerful fishish with any learnings on that so we don't usually use on their shirts union or somebody else who are opinion.
Somebody in Egypt.
One quick handoff, telling me you got silicones or young people that can do that.
Good luck.
Sure.
Hum.
And also weibo.
It is true that our weibo is actually a kind of our ecosystem and also a kind of a use a platform that is pretty much focusing on one of the important verticals, which is entertainment.
And of course things last year, we've been seeing that because of this justification and adjustment made on those functions as well as the new launch of some of the products. We did receive some of the impacts to this particular entertainment and also to our performance because of something happening in the entertainment industry.
The thing is that you know I'm talking about for example last year second half and also Q1 of this year, we've been closing down some of the accounts and also you know tried to rectify the content and also try to manage the fans and also the kols et cetera. So that is to say that a very good example would be.
That's among the Harte research and hot topics entertainment accounted for used to accounted for about 30% to 40%, but now in Q2 of this year and attainment topics only accounted for about 25% of those are hot research and hot such as so that it would say that from the second half of last year.
Until the Q1, we did receive some of the impacts, but we believe that this pretty good reputation and also regulation is pretty much important to really strengthen and try to regulate the whole ecosystem that weibo has.
Okay.
Hum.
And as with each year.
Hello, Hi, equivalent natural sugar equivalent.
So what it means.
I'm on with her domain, it's probably going to change.
Should you fufu agenda.
10 development of a gym, Glenn could you elaborate on the quarter.
No.
Any magnitude of soup and simple.
So the courtroom.
Thank you Pat.
Sure until you shut down.
Sure.
Chosen one of the Premier view, let me assure you seem to hit really due yet, but under a wash or a team with a.
The teams.
So you put them on some good pin kind of trigger that you feel either.
Yeah.
And also.
No I'm talking about this particular eradication of defend them.
I think that this is a very important thing happening to regulate the whole kind of an entertainment industry and also you know as a platform that is it has been our operating innocent and there's a world for about 10 years already we have been already witnessing the fluctuations in ups and downs of the entertain.
Industry and also you know what we are trying to do is also try to observe a further optimized regulation postal post against this the entertainment industry and also joined the past 10 years or so we've been collaborating actively and communicated actively with the government to really trying to understand the later.
China and also trying to understand the latest requirements post upon the ecosystem that we have so we are very much proactively optimizing and also no change in our operating strategies. So not only this is really helpful for us to regulate weibo internally, but also this is a very good thing to regulators.
Our industry and also beneficial to the whole industry to really grow on a sustainable cost.
Okay.
Uh huh.
Thank you.
Our next question is from the line of Bill and there's one of Bank of America. Please go.
[noise] ahead.
Thank you.
Sometimes you just alluded to you know photography Joseph downtown.
He says he <unk> know what you mean, when he should claim on their shipping now.
And it sounds you can go through a couple of things that go into a quantity could go away or shipping sure Tyler you should do.
So shipping champion San Diego opinionated towards that yeah, no. She opinion on the contour entrepreneur and the time for them.
As you can get now going to call it that way bullshit, peanuts, cashews and peanuts, you draw a ku quantity junk now I'll give the family interest you sounds completes and John can talk lending shipping quite coffee and sugar.
It's just you know what I'm, saying is out with win T. Thank you management. So my question is about the video business can management elaborate more on our initiatives for Weibo's video ecosystem. For example, the expansion of the content category.
A distance for the content creation and content distribution and how that sweep or video compete with other video platforms with different value propositions and also can you provide more color on the development of the video AD monetization. Thank you.
Uh huh tissue so.
You shouldn't pay for them and they should put them in.
Should any harder to cancel them.
The feedback we are more than a tongue untoward change too.
Sure.
Okay.
So as you know it's hard.
And I don't know one of them, what kind of kind of a headwind in Tokyo and Kevin.
So longer phenomenon since down toward that one.
Archie which is good.
Have you guys actually in the envelope MP sand.
Good wishes.
You bet.
Okay.
Hey.
And also first of all I'm talking about the whole ecosystem. So as we have already stated that in 2021 or ecosystem will be pretty much focusing on the development of the video accounts and also you know we are encouraging more video creators to opening up their accounts and also further to boost the <unk>.
Sumption, that's when it's to supply of the video products. So as we have stated that we have we're exceeding 10 billion as a threshold of all the video creators and also 30000 of them had already the followers of reaching 1 million. So that is to say that in the Q2.
Quarter on quarter, we can see that so we nearly doubled this particular volume of the video is created.
Okay.
No.
She'll be gone I kind of wonder woman.
And kind of being able to be able to meet that they don't come in.
As you saw kind of nuts on girls equal attack.
Sure.
Cause you trouble, that's useful and then liquidity and of course, you all know.
Our kids fishing myself very popular promotion.
Golf Ball Corral me she called.
Okay.
No we don't.
Silicon gasoline for them, they're wishing Pat.
T shirts, it's at that level, which again it goes without saying, we bought immune sugar truly shop Asia, Dr. Kim with it should happen that a triple threat.
On the tissue triptans aren't kind of tissue paper with them, what it looks like she's on the screen.
We cannot treat other patients.
Hmm mm.
Also our next thing is about the kind of a total consumption of the videos. So that is to say that we are still leveraging the advantage of weibo as a social media platform, which is a very important one to really no trigger the consumption of the videos and also the other kinds because what do you guys see it that go along with the consumption of video is we also have.
The assumption I mean, consumptions by the users to the text and images et cetera, and also what you can see is that we.
We are really triggering more kind of topics as well as the consumption of videos are around the social media platform and also we are really encouraging more kols and also the other media to we Didnt know disseminate those knowledges and also those videos as well as the contents as well so that is to say that we.
Trying our best to diversify the content that we are providing to weibo. So a very good example is that joined the unimpaired what would you guys see as not only we can see peoples and also users consumption around the videos short videos for example, as well as the other live streaming but also all the discussions triggered by.
That is pretty much around the video as a product. So that is one of the major differentiating strategies and also our unique selling points of Weibo.
Right.
Thanks, Jimmy and pension income in Kenosha, It's really hard for me.
We teach your line is open.
Sure Sean.
So you shouldn't be I know don't you are not going to come down I think Aldo.
But we can go into cohort are you assuming 100 for example, how long ago, you would see for <unk>.
Some of them back in Banca channel champions of Coke.
Furnished with Hangzhou quick principally going to be able income shown here, we cannot chicken now Angela sitting onshore that's all from me.
Thank God that we brought.
Iran attempting that's helping us on the call.
Congratulations.
And also affordable in terms of the AD monetization and what we can see is that with the increasing of the number of video accounts and also the increasing traffic while we can see a very good contribution to our AD inventory and also we see more customers actually know post their ads on us and also in a place there at all.
So with also the enable enabling of the fourth screen ad.
We can see a kind of a more placement as well as being husband over the efficiency of the advertisements. So that I can say that in Q2, we had I enjoy a higher growth on the video ads than the other format of the App and now the video AD already accounted for about one third of our total AD products and formats.
Okay.
Alright. Thank you as there are no further questions I would like to hand, the conference back to management for closing remarks. Please continue.
Yeah. Thank you for joining us today see you next quarter.
Uh huh.
Thank you and this concludes today's conference call. Thank you for participating you may now all disconnect.
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Yes.
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Okay.
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