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    WB
    Earnings call· Mar 2026(Q1 FY26)

    WEIBO Q1 FY26 earnings call WB

    May 28, 2026 Source

    Executive summary

    Weibo Q1 FY26 — Ad Revenue Growth Driven by AI and Strategic Shifts

    Weibo delivered solid Q1 FY26 ad revenue growth, fueled by strategic shifts towards user quality, information feed optimization, and robust AI integration across products and monetization. Despite a modest decline in MAUs, DAUs showed resilience, supported by enhanced video consumption and core user retention. The company continues to balance investment in AI and content ecosystems with profitability, navigating uncertain macro consumption sentiment and industry competition.

    Highlights

    5

    • Total net revenues increased 6% year-over-year to $421.3 million.

    • Total advertising and marketing revenues grew 9% year-over-year to $369.8 million, driven by Internet services, local services, and automotive verticals.

    • Average daily active users (DAUs) achieved modest quarter-over-quarter growth, reaching 254 million.

    • Total time spent on video playback pages achieved double-digit year-over-year growth.

    • MSCI ESG rating was upgraded from BB to AA, recognizing sustainability progress.

    Concerns

    5

    • Monthly active users (MAUs) experienced a modest decline year-on-year and quarter-on-quarter, reaching 562 million.

    • Non-GAAP operating margin decreased to 28% from 33% in the prior year, primarily due to increased investments.

    • Value-added services revenues decreased 11% year-over-year to $51.6 million, mainly due to a decline in game-related revenue.

    • Advertising revenues from Alibaba decreased 4% year-over-year on a constant currency basis to $43.3 million.

    • Intensified competition in the handset market and rising component costs may weigh on ad budgets from this sector.

    Segment performance

    2
    SegmentRevenueYoYQoQMargin
    Advertising and Marketing
    Revenue growth was supported by improving demand from selected verticals and continued execution in content marketing and performance-based ad products. Internet services, automobile, and local services were major contributors, while FMCG faced a year-over-year gap and online game sector was on a descending trend.
    Constant currency growth: 3%Largest verticals: FMCG, e-commerce, 3C productsMajor growth contributors: Internet services, automobile, local servicesAlibaba ad revenue: $43.3 millionAlibaba ad revenue YoY growth: 2%Alibaba ad revenue constant currency YoY growth: -4%Promoted feeds ad: largest, solid growth
    		$369.8 million9%——
    Value-Added Services
    The decrease was primarily attributable to a decline in game-related revenue.
    Constant currency growth: -15%
    		$51.6 million-11%——

    Operational metrics

    16
    Non-GAAP operating income
    $119.8 million
    Q1 FY26

    Represents a non-GAAP operating margin of 28%.

    Non-GAAP operating margin
    28%vs 33% in Q1 FY25
    Q1 FY26

    Operating margin declined year-over-year due to investments in monetization-related initiatives.

    Net income attributable to Weibo
    $91.9 million
    Q1 FY26

    Representing a net margin of 22%.

    Diluted EPS
    $0.34
    Q1 FY26

    Diluted earnings per share.

    Cash, cash equivalents and short-term investments
    $2.59 billionvs $2.41 billion as of December 31, 2025
    March 31, 2026

    Balance as of the end of the quarter.

    Cash provided by operating activities
    $164 million
    Q1 FY26

    Cash generated from operating activities during the quarter.

    Depreciation and amortization expenses
    $15.5 million
    Q1 FY26

    Expenses for depreciation and amortization.

    Annual cash dividend
    $0.34 per share
    FY25

    Completed distribution for fiscal year 2025.

    MSCI ESG rating
    AAupgraded from BB
    April 2026

    Recognizing progress in sustainability, innovation, and social responsibility.

    AI-generated ad material consumption rate
    40%
    Q1 FY26

    Primary consumption rate for AI-generated ad materials.

    AI-focused professional content creators growth
    >30%vs January 2026
    May 2026

    Increase in number of AI-focused professional content creators.

    AI-related hot trends (daily avg) growth
    >30%vs January 2026
    May 2026

    Increase in average daily number of AI-related hot trends.

    AI content discussion volume growth
    >30%vs January 2026
    May 2026

    Increase in discussion volume of AI content.

    AI interactive dialogue-based search users growth
    100%
    Q1 FY26

    Growth in users and adoption for the interactive dialogue-based search feature, which was made available in Q4 FY25.

    Total cost and expenses
    $301.5 millionincreased 13%
    Q1 FY26

    Mainly due to higher ad production cost and marketing expense, partially offset by decrease in general and administration expense.

    Income tax expenses
    $15.7 millionvs $24.3 million last year
    Q1 FY26

    Mainly due to a decrease in deferred tax liability related to equity pickup adjustment.

    Industry KPIs

    5
    MetricValueDetails
    Family dap dau562 million MAU, 254 million DAUusers
    CAPEX compute commitments$11.9 millionUSD
    Search query volume trend1 million usersusers
    Advertising revenue by segment$369.8 millionUSD
    Ai feature adoption monetization40%%

    Product announcements

    3
    ProductTypeDetails
    AI Creation Tools for Creatorsexpansion
    Weibo Intelligent Search Functionupdate
    AI Content Creating Centerlaunch

    Risks & headwinds

    8
    Modest decline in Monthly Active Users (MAUs)Q1 FY26

    562 million MAUs in March 2026, modest decline YoY and QoQ

    Mitigation: Strategic focus on enhancing user experience, driving retention, rationalizing channel budget allocation, and optimizing information feed products.

    Decline in Non-GAAP operating marginQ1 FY26

    28% in Q1 FY26 vs 33% in Q1 FY25

    Mitigation: Increased investments in monetization-related initiatives, balancing near-term execution with sustainable profitability and healthy cash flow generation.

    Decline in Value-Added Services (VAS) revenuesQ1 FY26

    $51.6 million, -11% YoY (-15% constant currency)

    Mitigation: Primarily attributed to decline in game-related revenue; no specific mitigation mentioned beyond overall strategic focus.

    Decline in advertising revenues from AlibabaQ1 FY26

    $43.3 million, -4% YoY on a constant currency basis

    Mitigation: Fluctuations correlated to Alibaba's marketing strategies, campaign priorities, and product launch schedule. No specific mitigation mentioned.

    Intensified competition and rising costs in handset marketOngoing, looking ahead

    May weigh on ad budgets from handset manufacturers

    Mitigation: Closely tracking new product launch cycles and client budget dynamics, optimizing sales strategy to ensure solid coverage of key clients.

    Headwinds in FMCG and online game sectorsQ1 FY26

    FMCG facing year-over-year gap; online game sector on a descending trend due to lack of blockbuster releases

    Mitigation: FMCG saw sequential recovery with celebrity/KOL marketing. For online games, no specific mitigation mentioned beyond overall strategic focus.

    Uncertain macro consumption sentiment and industry competitionOngoing

    General market uncertainty

    Mitigation: Balancing investment needs with operating efficiency and healthy cash flow generation to build a sustainable foundation for long-term development.

    Public acceptance and commercialization of AI-generated contentNear-term

    Not doing massive commercialization yet

    Mitigation: Internal testing among KOLs and waiting for public acceptance as a criterion for massive commercialization.

    Q&A highlights

    2

    What is the Q2 advertising outlook and full-year strategy? How does AI benefit advertising and monetization?

    Management noted Q1 ad revenue growth was better than expected in consumption areas, but key accounts in automotive, handset, and e-commerce face stress. Q2 outlook for automotive is positive due to new EV launches, while handset industry sales dropped in H1. E-commerce faces a high base and less intense promotional activities. AI is effective for performance-based ads, material generation, and recommendations, with 40% consumption rate for AI-generated ad materials. AI also facilitates KOLs and celebrities in content creation, but mass commercialization is pending public acceptance.

    “[Interpreted] So you can see that AI was quite useful in terms of the ad material generation, [indiscernible] and also the recommendations as well. So in terms of those generated materials for the advertisements, the primary consumption rate was already reaching to about like 40%.”

    asked by Thomas Chong from Jefferies · answered by Gaofei Wang

    2 min read5 chapters

    Detailed Narrative

    01

    User Growth and Retention Strategy

    Weibo is strategically focusing on enhancing user experience and driving retention, leading to a rationalization of channel budget allocation. While MAUs saw a modest decline to 562 million in March 2026, DAUs achieved modest quarter-over-quarter growth to 254 million, supported by optimization of information feed products and sustained video content consumption. The company aims to build a high-quality, highly engaged, and sustainable user growth framework throughout 2026.

    02

    Information Feed and Video Optimization

    Following product updates in mid-2025, the information feed optimization began yielding positive results in March 2026, improving content consumption and interactive measures for core users. In Q2, the focus will shift to users relying on recommendation feeds, aiming for seamless content consumption. The video business is a crucial driver for time spent and retention, with total time spent on video playback pages achieving double-digit year-over-year growth in Q1, driven by optimized distribution and increased supply of high-quality content.

    03

    AI Integration Across Products and Monetization

    AI continues to be a significant enabler for Weibo, supporting ad targeting, bidding, and creative generation for promoted feeds and real-time bidding products. Internally, AI tools are expanding to improve execution efficiency across product, operations, and sales teams. The company is also leveraging AI to enhance search capabilities, evolving from single-turn Q&A to multi-turn, multimodal queries, and integrating AI agent capabilities into key scenarios like public figure search.

    04

    Content Ecosystem Competitiveness

    Weibo is strengthening its core businesses of trending topics, social network, and search. Efforts in Q1 focused on enhancing the credibility of trending lists, deepening community interactions within 'super topics' (which saw YoY growth in active and engaged users), and advancing AI search. These initiatives aim to improve content consumption efficiency and overall user engagement, reinforcing Weibo's position as a platform for hot trend discovery and public discussion.

    05

    Advertising Revenue Drivers and Headwinds

    Advertising revenues increased 9% YoY, primarily driven by strong growth in Internet services, local services, and automotive sectors. AI large language model players significantly ramped up marketing investment on Weibo during Chinese New Year. However, sectors like FMCG and online gaming faced headwinds, with FMCG showing sequential recovery in celebrity/KOL marketing, and online gaming declining due to a lack of blockbuster releases. The handset market faces intensified competition and rising component costs, potentially impacting future ad budgets.

    AI-generated summary of the company’s earnings call. Not investment advice.