Ladies and gentlemen, thank you for standing by. And welcome to the Weibo Reports Fourth Quarter and Fiscal Year 2016 Financial Results Conference Call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your first speaker today, Ms. Lydia Yu, Investor Relations for Weibo. Thank you. Please go ahead.

Thank you, operator. Welcome to Weibo’s fourth quarter earnings conference call. Joining me today are Chairman of the Board, Charles Chao; our Chief Executive Officer, Gaofei Wang; and our Chief Financial Officer, Herman Yu. The conference call is also being broadcasted 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 statements. Weibo assumes no obligation to update the forward-looking statements in this conference call and elsewhere. Further information regarding these and other risks is included in Weibo’s annual report on Form 20-F for the fiscal year ended December 31, 2015 filed with the SEC on April 28, 2016 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 expenses. We use non-GAAP financial measures to gain a better understanding of Weibo’s comparative operating performance and future prospects. Our non-GAAP financial excludes certain expenses, gains or losses, and other items that are not expected to result in future cash payments or that are non-recurring in nature and will not be indicative of our core operating results and 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.

[Foreign Language] Thank you, hello everyone and welcome to Weibo’s earnings call. [Foreign Language] On today’s call I will share a few key developments in Weibo’s product, user growth and monetization, review the progress that we have made in 2016 and share with you our plan for 2017. [Foreign Language] Let me first discuss fourth quarter financial results. We continue to see strong revenue and user growth in the fourth quarter of 2016. Our total revenue reached 212.7 million, up 43% year over year. Advertising and marketing revenue reached 187.9 million, up 45% year over year with 68% of our ad revenue coming from mobile. Non-GAAP net income was 77 million, up 134% year-over-year. [Foreign Language] Weibo’s total revenue for fiscal year 2016 reached 655.8 million, up 31% year over year. Advertising and marketing revenue reached 571 million, up 42% year over year. SME and KA advertising revenue reached 513 million, up 98% year over year. Non-GAAP net income reached 183.5 million, up 167% year over year. [Foreign Language] Weibo’s robust revenue growth and operational efficiency in 2016 are derived from the following three areas. First, continuous user growth and increase in user engagement has made Weibo an essential element of mobile marketing in China. Second, as our monetization taking shape, we offer a full spectrum of advertising and marketing solutions such as brand ads and performance ads, tailored to a different customer segment from individual, small and medium sized enterprises to key accounts. Lastly, Weibo’s business model as a social platform is starting to take shape in 2016 effectively enhancing through operational efficiency and monetization. [Foreign Language] On the user front, Weibo’s monthly active users reached 313 million at December, up 33% year-over-year. Average daily active users in December reached 139 million, up 30% year-on-year. In December, 90% of…

Thank you, Gaofei. Welcome to Weibo’s fourth quarter 2016 earnings call. Let me go through our financial highlights for the fourth quarter and full year 2016. For the fourth quarter, Weibo’s total revenue reached $212.7 million, up 43% year-over-year or 53% on a constant currency basis, exceeding the company’s guidance between $205 million and $210 million. Non-GAAP net income attributed to Weibo reached $77 million, up 134% year-over-year. Non-GAAP diluted EPS was $0.34 compared to $0.15 a year ago. With revenue peaking in our seasonally high fourth quarter, our adjusted EBITDA reached $78.2 million, up 111% year-over-year and adjusted EBITDA margin reached 37% compared to 25% last year. For fiscal 2016, Weibo’s total revenue reached $655.8 million, up 37% year-over-year or 45% on a constant currency basis. Our SME and KA businesses together make up 90% of Weibo’s advertising revenues. Each grew robustly in 2016 and 98% year-over-year or 110% on a constant currency basis. Non-GAAP net income attributed to Weibo in 2016 reached $183.5 million, up 167% year-over-year. Non-GAAP diluted EPS was $0.82 compared to $0.32 a year ago. Adjusted EBITDA reached $193.7 million, up 126% year-over-year and adjusted EBITDA margin reached 30% compared to 18% in 2015. Since turning profitable in 2015, we have seen continuous margin expansion illustrating a strong operating leverage of Weibo as a social media platform that connects content to audience. We believe there is significant opportunity for operating margin to grow, especially over the long-term as we further scale our users, content creators and customers. Let me give you more color on our fourth quarter revenues. Advertising and marketing revenue for the fourth quarter reached $187.9 million, up 45% year over year or 55% on a constant currency basis. Mobile ad revenue made up 68% of total ad revenues and was up 53%…

[Operator Instructions] Our first question today comes from the line of Alicia Yap from Citigroup. Please ask your question.

Hi. Good morning, Gaofei and Herman. Thanks for taking the questions and congrats on the good quarter. My question is related to overall ad budget allocations. So among your KA customer, can you share with us how much of their total ad budget for Weibo platform currently is allocated to video format versus the performance based? And in addition within your video ads revenue, what is percentage currently coming from SME customers or is that mainly still coming from KA? Thank you.

Okay. Good morning, Alicia. First question you asked was what percentage of our advertising was from video versus performance based. The way we sell our advertising is usually in a packaged form. So we don’t sell video by ourselves. For example, when we tuck our SMEs by a video, SME typically buy performance based and they’ll probably buy video as a blender of their overall campaign, so that their performance based advertising could be more expected. So with that kind of understanding, our total advertising revenue in the fourth quarter from video is over 10%, but I don’t think it’s very meaningful to follow that percentage, specifically because really it’s kind of the driver for our overall larger budgets from the customer and also increasing the number of customers by having this unique kind of advertising. Can you repeat your second question with regards to percentage of SME revenues?

Yeah. I guess it’s just roughly the same that you answered, but I think it’s just more from KA specifically, just wanted to get a sense like whether they have an intention increasingly to allocate more towards the video ads versus previously that we will have more display and then their choices on performance, but is video increasingly attracted to them?

Hi, Alicia. This is Charles. Let me answer this question. On the video customers, we have actually the revenues from video advertising majority from KA right now and very small portion from SMEs. And in terms of interest of the video advertising going forward, I think there will be more and more KA customers who will be interested in the video advertising, partly because our video advertising is getting a lot of attraction in the market and secondly, because there is a strong demand for video advertising, but on the market itself, overall market itself, traditional TV rating is going down year by year and also there is a lot of video sites shifting towards more like membership fee based service. So, there is a whole lot decrease or lack of inventory for video to tie in the market, which give us a lot of opportunity to get more customers in this area for online advertising. So I think there will be a good demand for that. It’s a matter of how we’re going to set aside that demand in the market, but in the SMEs, I think that demand will be there, but I think that will be more from native ads, content related native ads, being video that could be more popular among SMEs and that is another area we probably will focus upon in the coming year, but in terms of dollar amount, we think the majority will still be coming from KA customers.

Our next question today comes from the line of Evan Zhou from Credit Suisse. Please ask your question.

Hi. Good morning, Charles, Gaofei and Herman for taking the question. Congrats. Question mainly regarding our own products, just wondering how you look at the overall like in feed or information fee based product competition for this year. I think everyone including like the leaders like Total, Tencent and us and Baidu is looking at as well. So just wondering like from the product perspective, you also mentioned there are like information feed, interest rate feed on your prepared remarks, how do you see the dynamics both on the user side who is gaining share losing shares or on the budget side. I guess I think everyone’s kind of budget target this year that’s pretty high? And also I think a couple of days ago, you actually announced the cooperation with EDN, and also along with [indiscernible] as well. So how do you see kind of the dynamic going forward on that front and what are kinds of edge on the product side? Thank you.

[Foreign Language] So from our product roadmap, we’re moving what -- we’ve already established relationship base and we’re now also focused on building our interest base. [Foreign Language] So there is two benefits from growing our interest base audience. One is by building our interest base information fee, it lowers the barrier for new users to come on to easily be of the consumed content and secondly, for our current medium level and high level heavy users, it can increase their time spent. [Foreign Language] So we’re seeing that in the market people who have entered the interest base fee format, product include companies like Baidu, like UCA, like Total and we believe that ultimately what it -- in order to have that competitive strength is all about user retention rate and without strong social engagement aspect of the product, very hard to actually increase our retention rate of the users. [Foreign Language] So we can see in China that it’s typical for mobile phone owner to actually switch to a new handset every 12 months. So if you don’t have that social relationship, then every time when you try to get a new user, the cost will be very expensive, whereas if you have built a social relationship with other people in the network, then we will have a less cost pressure to maintain the users. [Foreign Language] So for Weibo, we’re really a new entrant into this interest base product and we believe that the size of this market is just as big as our current size of microblog and we believe that we can actually get a reasonable market share as we enter this space if that should meet our strong social aspect of our product.

Our next question today comes from the line of Juan Lin from 86Research.

Hi. Good morning, Charles, Gaofei and Herman. Thank you for taking the questions. My question is related to monetization particularly ad load. I am wondering what is the current level for total load and what is the ad load for video other than feed and discovery channel, whether we expect ad load to increase this year and to which level we think ad load will normalize? And then secondly, the question is on brand advertising versus SME. Brand advertising has been outgrowing SME for two quarters. So whether the trend will continue and what kind of products and the sales strategy we have put on enhancing the brand ad growth? Thank you.

Hi, Juan. Good morning. On our last call, we actually explained the fact that because our product is diversifying from relationship to interest base also with video and so forth, you’re actually seeing a lot of different information feeds that we have introduced. When you look at ad load, for example this quarter, our ad loads actually were slightly lower than last quarter, still above 4%. But I think ad load percentage is just one of the many metrics, we talked about impact to the overall revenue growth, including for example CTR. If you look at a lot of the new products that we have including leads and so forth, all of these play into this. So we talked about last quarter that going forward, we’re not going to specifically disclose ad loads, especially on a product basis because it’s not as meaningful. You need to look at all the metrics as a whole. But to answer your question that our ad loads went up by over 4% and it’s lower than last quarter.

[Foreign Language] So this year, we will see a trend that our KA is growing faster than our SME. A major reason for this is the product that’s available to these different customer segments, whereas the SMEs, they can only buy promoted fee as for the KAs in addition to promoted fees, we can also buy many other different type of advertising such as topics, such as event base, such as brand advertising, such as app opening and so forth. So because of that broad array of products that we offer to the KAs, we’re able to actually have a more stronger growth this year. [Foreign Language] So going forward, the way we look at this is from a brand advertising offering aspect, we see ourselves having a stronger offering, so we’re very competitive in this space, but with regards to performance based advertising, there is quite a few competitors in this market such as Baidu, such as [indiscernible] and so forth. So with respect to the offering, we’re stronger at the brand advertising versus performance based. [Foreign Language] On the other hand, we’re seeing that the demand from SME is becoming very strong. So I think over the next one or two years, it’s hard to gauge which one will be growing faster. I think it really, at the end of the day, is our ability to actually offer very competitive products in this base. So we’ll have to see.

And our last question today comes from the line of Alex Yao from JPMorgan. Please ask your question.

Hi. Good morning, everyone. Thank you for taking my question. I have two questions regarding the KOL monetization. So you guys discussed three major categories that you’re monetizing in the prepared remarks, such as fashion, apparel and the financial services. So across the 50 content categories that you guys have on Weibo, to what extent have you monetized those categories from KOL perspective? And then around available monetization model for the KOL themselves such as e-commerce, ad placement, et cetera, what are the key monetization vehicles for them? So what I wanted to establish is, as we think about the KOL monetization, sustainability and scalability in the next two years? And then second question is regarding the user growth outlook for this year. You guys have gone a good job in terms of building the user and driving the engagement over the past few years. How do you think about the user growth outlook and user acquisition strategy for this year, given that the population dividend of mobile Internet has come in to an end? Thank you.

[Foreign Language] So for self-media or this big vertical KOLs, our monetization model for them will not change in the short term. It will be basically advertising, it will be e-commerce, it will be subscription of their content. [Foreign Language] So in the last two years, we’ve first focused on maybe the one-third of the industry’s where we think it’s easier to help them monetize. Over the next year or two, we’re going to start expanding into KOLs of other industries and help them find a way to be able to monetize the social assets on Weibo.

So Alex, the question you were asking is monetization, when we think about allowing the self-media to big KOLs on Weibo’s monetization, Weibo is really not about growing revenues in this space. It’s really about allowing these KOLs to be able to share premium content on to Weibo at the same time be able to get a return from all the efforts that they’ve put in. So it’s, when we’re talking about monetization, it’s really helping them find a way to get the return for the content that they’ve created.

And this is a very important part of Weibo’s ecosystem, which means that we actually try to generate organic demand for advertising for the [indiscernible] in the process becoming more infringed and Weibo platform, there is a need or demand for advertising for increase in content coverage to I mean increase their financial asset in the process and once they become more infringed on the platform, when they start to monetize, they would have demand for advertising again for the monetization. So this is actually a very important part when we say organic demand from Weibo advertising. This is what we’re talking about and this is very important part of the ecosystem for Weibo and the foundation for a lot of future demand.

That concludes the question-and-answer session for today’s call. I’ll now like to hand the conference back to Ms. Yu for closing remarks.

Thanks, everyone. That concludes today’s conference call.