Welcome to the Weibo Corporation Fourth Quarter 2014 Conference Call. [Operator Instructions]. I would now like to turn the conference over to [indiscernible] IR representative. Please go ahead.

Thank you. Good morning. Welcome to Weibo's fourth quarter earnings conference call. Joining today are our Chairman, Charles Chao, our Chief Executive Officer, Gaofei Wang and our Chief Financial Officer, Herman Yu. The conference call is also being broadcast on the Internet and is available through Weibo's IR website. Before the management's presentation, I would like to read you the Safe Harbor statement in connection with today's conference call. During the course of this conference call, we may make forward-looking statements, statements that are not historical facts, including statements about our beliefs and expectations. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Weibo assumes no obligation to update the forward-looking statements in this conference call and elsewhere. Further information regarding this and other risks is included in Weibo's registration statement filed on April 17, 2014 and other filings with the SEC. Additionally, I would like to remind you that our discussion today includes certain non-GAAP measures, which excludes stock-based compensation and certain other items. We use non-GAAP financial measures to gain a better understanding of Weibo's comparative operating performance and future prospects. Our non-GAAP measures exclude certain expenses, gains, losses and other items that are not expected to result in future cash payments or that are non-recurring in nature or will not be indicative of our operating results and business outlook. Please refer to our press release for more information about our non-GAAP measures. Following management's prepared remarks, we will open the lines for a brief Q&A session. With this I would like to turn the call over to our Chief Executive Officer, Gaofei Wang.

Thank you. Good morning everyone. Welcome to Weibo's fourth quarter 2014 earnings conference call. During today's conference call let me share with you the progress we have made during Weibo as a leading social media in China as well as the progress made on our Weibo's native offerings. We refer to social media as a social platform that is mainly used to enable open information sharing as opposed to social networking services and instant messaging which are generally used to precipitate private communication and networking. First let me start with our fourth quarter performance, in the fourth quarter of '14 Weibo continued to achieve strong revenue growth. Weibo's total revenue grew 47% year-over-year to 105 million, Ad revenues grew 57% year-over-year to 18 million. This mobile ad revenues for the first time exceeding a majority to 54% of our total ad revenues. In addition we’re experiencing continuous top line improvement with non-GAAP net income in fourth quarter risen [ph] 9.4 million. Turning to our operating results. In December we both marked active users which were 176 million up 36% from the same period last year, while daily active users reached 81 million up 31% from same period last year, 80% of Weibo's MA used for mobile in December. On our last conference call we discussed Weibo's goal to serve as a major sharing search platform and to offer wide range of tools and services to our users and other potential customers to empower them to conduct business on our search media platform. To serve this purpose and following industry trends we have placed significant efforts to enable the creation, sharing and consumption of multi-media contents. On top of text based contents, we aim to continue our leadership in social media in China by offering better use experience for multi-media contents.…

Thank you, Gaofei for the introduction and good morning everyone. It's quite exciting to be back at Weibo. In the past year Weibo's business has grown to a large scale. As Gaofei mentioned, Weibo's monthly active users reached 176 million in December up 36% year-over-year. For 2014 which is our second full year of monetization Weibo's revenues grew to $334 million up 77% year-over-year. The scale that Weibo has achieved enable us to narrow Weibo's non-GAAP loss in 2014 to $1.7 million from a loss of $30.8 million the year before. On a non-GAAP adjusted EBITDA basis Weibo made $16.1 million in 2014 compared to a loss of $6.3 million for 2013. Now let me walk you through our financial highlights for the fourth quarter. Since our IPO in April we have had solid execution with fourth quarter of 2014 Weibo's total revenues reached a historical milestone surpassing $100 million per quarter to reach $105.2 million representing a 47% growth year-over-year. Non-GAAP net income was $9.4 million growing 142% from the same period last year. Non-GAAP EBITDA was $16.2 million compared to $8.7 million for the same period last year. Weibo's advertising and marketing revenues for the fourth quarter of 2014 was $88 million up 57% from the same period last year. We saw robust growth coming from all customer segments. For example Weibo's small, medium sized enterprise business generate $23.5 million in revenues which more than doubled from the $9.9 million with the same period last year. We continue to see strong momentum in the adoption Weibo marketing solution from SME customers as a total number of SME customers exceeded 14,000 in the fourth quarter up 59% from the same period last year. Although Weibo -- SME marketing services are mainly sold through distributors we included in our SME…

[Operator Instructions]. Our first question is from Gene Munster of Piper Jaffrey. Please go ahead.

I might have missed this in the prepared remarks but can you give us an update in terms of payment and how that’s been trending and then separately when you look at the number of SMBs that you currently have how do you think about what -- 14,000 what ultimately that addressable market could be 2, 3, 5 years down the road. Thanks. I might have missed that in the prepared remarks but any updates on payments and how is that progressing going forward?

Let me maybe address your question, on the second one regarding the potential addressable market for SMEs and I think it's very important for us to build a big base, customer base for SMEs because as you understand the nature of this advertising system especially for the ones in the information flow, it requires a lot of mention. I mean so the more customer you’ve the more inventory you’ve the more accurate the matching will be, the more efficient advertising will become. So this is when our priority is to expand our customer base in all categories for the SMEs and so we saw pretty good progress in 4Q and I think we’re going to continue to build our base in the future. I think right now 14,000 when we get to a 100,000 customers I think our advertising system will become much, much more robust in terms of efficiencies and this is the target we’re getting for the future maybe in 2 or 3 years.

Our next question is from [Technical Difficulty]. Please go ahead.

[Technical Difficulty]

Yes, let me finish the first question that Gene asked and then we can move on, so the first question that Gene asked was regards to the payments and payment so far we have at the end of last year total activated linked to Alipay was about 35 million and those were asked for user payments we had over 11 million users.

This is Eddie. Just a couple of quick questions, you mentioned quite a bit about your SME advertiser strategy but would like to get more color on the so called large account segment. Just wondering could you share more color how successful you guys have been doing cross sellings to your traditional large accounts. So could you share with us let's say proportion of your portal advertisers that have been your Weibo advertisers on a consistent basis and then related to that, could you also remind us the number of our corporate accounts registered on Weibo at the moment. Thanks.

So Eddie, with regards to having similar customers with the portal there will be more overlap in the fast moving consumer goods and auto industries which the portals are very strong at. Going into 2015 Weibo is going to focus also more on real estate and finance sector, so in these type of industry as we grow more we’re going to have more-- Yes and with regards to the V accounts, the enterprise and government accounts that we have verified, we should reach about 800,000 which is twice the amount over the same period the year before.

Our next question is from Juan Lin, 86 Research. Please go ahead.

[Technical Difficulty] very strong compared to peers, could you please breakdown these item into banner ads and promoted feed ads. My second question is related to SME revenue. In Q4 how much of the growth or how much of ad dollar for SME revenues generated by the self-serving systems? Thank you very much.

Can you repeat the first question? You got cut off.

My first question is related to ad revenue for banner ad and promoted feed ad.

Yes, okay so let me take these two. So with regards to the product breakdown of our advertising revenue. So if you exclude Alibaba for the first time I think in fourth quarter promoted fees it's over 50% of our total revenues, working guest ads with our mobile advertising now becoming very substantial. With regards to your second question. Yes with regards to your second question on self-serving service that is still a very small portion of our total SME advertising, we mentioned on the script that the purpose of this really is to allow a lot of individual as small business to try Weibo advertising to buy directly from Weibo advertising. So the purchase is very small, it's more trial size. So the idea is to let them try first and as the purchases become more significant move them to the -- so it's lot of customers with 300,000 and the total revenue amount is significantly small compared to all of their revenue.

Can I have a follow-up question if I may regarding competition scenario. So WeChat [ph] rolling out [indiscernible] enrollments in third quarter. How do you see the major move from initially impacting the ad budget plan from your key accounts?

Yes, so with [indiscernible] entering advertising I think at some level you will see some competition but I think more importantly we’re at a very early stage of mobile social advertising in China and with [indiscernible] coming in what it does is it increases overall scale of the industry and we see actually some of our customers now asking more about social marketing and mobile marketing. So I think it's going to help educate our customers both key accounts into ultimately drive you know higher demands as a result I think we should benefit from this circular trends.

Our next question is from Jin Yoon, Mizuho Securities. Please go ahead.

Now that the company has hit profitability on a non-GAAP basis do you expect that trajectory to continue in the next few quarters? Is there any plans to accelerate further invest, or accelerate investments in R&D or sales and marketing. Can you just talk about how you look at kind of the cost structure and investments going forward? Thanks.

Let me talk about it with regards to the next quarter and then the whole year for 2015, if you look at Q4 and then looking at the first quarter, our cost is pretty much fixed. So if you look at our guidance so if you look at our guidance revenue is going to be down on a quarter-over-quarter basis but in terms of our cost and expenses much of that is fixed cost. You’re not going to see a much savings. With regards to the whole year 2015 you actually see a pretty consistent ramp up in 2014 and we should see that trend going into 2015. I think for the whole year you will see that Weibo has gotten to a certain scale where revenue growth should be outpacing the overall cost and expense percentage growth.

Our next question is from Jialong Shi of Credit Suisse. Please go ahead.

My question is also about the competitive landscape for social ads from another angle, your another mobile social peer, Momo, also started serving social ads to both local and Alibaba merchants recently so I just wonder if management can provide any colors on your competitive edge when trying to bid for ad dollar from the same advertisers.

So far we have not seen competitive pressure from Momo, Momo being a local base advertising and for us working with Alibaba with our payments solutions I don’t think we have a conflict right now. So far we don’t see competitive pressure from that.

Our next question is from George Meng, Morgan Stanley. Please go ahead.

My question is actually on the user and user products, first of all I noticed that you guys started to so called clean up some of the inactive fans starting from January. So I just wonder what's the latest user stats trend you started that kind of initiative. That’s my first question. And I’ve a follow-up, thanks.

Yes, so we have been having ongoing clean-up of user -- fans, and what we see during events such as the November 11th, some enterprise accounts and celebrities have ways of increasing their fans in which we have penalized these enterprises and celebrities as they are increasing these what we call fake fans. So we will continue to do these type of clean-ups going forward and we haven't really seen them impacting user usage.

And my second question is regarding your strategy to roll-out for example some separate apps like Weibo [indiscernible] and Weibo camera and also maybe try to promote again your video sharing app. So just wondering can you elaborate a little more on that, do you think like maintaining a metrics of different separate apps is more beneficial to use than just maintain a single app and adding or emphasizing some of the functions and also you mentioned that you’re going to cooperate with some of the third party photo sharing apps. So I just wonder going forward are you going to just focus on your Weibo camera app. And then maybe turn that into Instagram in China or you have other plans, just can't share with us, more thought on that. Thanks.

Yes, so overall in our prepared remark we talked about that in 2015 we will put more focus on trading a separate app for photo and for video. We see Weibo as a platform that aggregates and to share rich content and we see these individual apps as apps that can create very rich content. So we think that these two type of apps are complimentary and some of the feature sets that we build in these individual apps you can also have seen them in Weibo. So in 2015 we should still see most of these rich media photos and videos being captured directly from Weibo, we also want to promote some of these professional and semi-professional as they are creating content to use individual apps which will have better quality and have more better feature sets for creating photos and videos.

Our next question is from Tian Hou of TH Capital. Please go ahead.

I’ve a question related to your users. So we saw your users growing quarter-by-quarter particularly in the 2014 pretty nicely. However most of the users are really came from lower tier cities like second tier cities and when we do some kind of investigation or survey we found that to the users in the Tier 1 cities seems like turn their back to Weibo. So I wonder if you see the same speculation and also I wonder in your strategy for future development how do you want to address this issue? How do you want to -- users in Tier 1 cities to pick up? That’s my question.

Tier 1 users as a percentage of total user base is still the largest. When we compare on an annual basis Tier 1, Tier 2, Tier 3, all the tiers versus prior year we actually see them pretty stable. We see tier one growing around 10% and then another than Tier 1 we see growing around 20% to 30%. So it's still a pretty stable for Tier 1. And for 2015 we should see most of the growth still coming outside of Tier 1 cities because if we you look at the penetration rate outside of Tier 1 it's much lower than Tier 1 cities.

This concludes the question and answer session and conference call. Thank you for attending today's presentation. You may now disconnect.