Weibo Corporation (WB) Q1 2019 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by, and welcome to Weibo Reports First Quarter 2019 Unaudited 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 must advise you that this conference is being recorded today, Thursday, May 23, 2019. I’d like to hand the conference over to your first speaker today, Ms. Sandra Zhang. Thank you. Please go ahead.

Thank you, operator. Welcome to Weibo’s first quarter 2019 earnings conference call. Joining me today are Chairman of the Board, Charles Chao; our CEO, Gaofei Wang; our SINA Group CFO, Bonnie Zhang; and our VP Finance and Interim CFO, Fei Cao. This conference call is also being broadcast on the Internet and is available through Weibo’s IR website. Before management remarks, I’d like to read you the Safe Harbor statement in connection with today’s conference call. During today’s call, we may make forward-looking statements. Statements that are not historical facts, including statements of 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 call and elsewhere. Further 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. Weibo assumes no obligation to update such information, except as required under applicable law. Additionally, I’d like to remind you that our discussion today include certain non-GAAP measures, which include stock-based compensation and certain other expenses. We use non-GAAP financial measures to gain a better understanding of Weibo’s comparative operating results and the future prospects. Our non-GAAP financial excludes certain expenses, gains and losses and other items that are not expected to result in future cash payment or are non-recurring in nature or 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’ll open the line for a brief Q&A session. With that, I would like to turn the call over to our CEO, Gaofei Wang.

[Foreign Language] [Interpreted] Thank you. Hello, everyone, and welcome to Weibo’s first quarter 2019 earnings conference call. On today’s call, I’ll share with you highlights in Weibo’s user growth, product and monetization, as well as progress we made on key initiatives in 2019. Let me start with our first quarter financial results. We continue to see solid growth in revenues and user base this quarter. Our total revenues reached $399.2 million, up 14% year-over-year, or 21% on a constant currency basis. Advertising and marketing revenues reached $341.1 million, up 13% year-over-year, or 20% on a constant currency basis, with 85% of our ad revenues coming from mobile. Non-GAAP net income during the first quarter was $128.5 million, up 14% year-over-year. On the user front, in March 2019, Weibo’s MAUs reached 465 million, up 13% year-over-year, representing a net addition of 54 million users on an annual basis. Average DAUs reached 203 million, up 10% year-over-year. 94% of Weibo’s MAUs came from mobile. During the Chinese New Year, we delivered solid user growth and improved user engagement through innovative grand advent of marketing and holiday-specific branded campaigns. On the monetization front, KA business continued its momentum, thanks to sales team efforts and our ongoing ad product optimization and innovation. SME business also exhibited some positive signs with product mix and customer structure revamp and ad product optimization. In discussing our operating ARPU for the first quarter, our covered areas of users’ content and customers of Weibo. Let’s start from user growth and user engagement. We have two areas of focus this year. First, our user growth. Both strived to ramp up our user scale in the third and fourth-tier cities to further user product optimization and channel investment. From a channel perspective, we continue to partner with major domestic smartphone manufacturers for user acquisition. From a product perspective, we’ll continue to enhance the location-based content consumption and create an experience to meet the specific content and social interaction demand of low-tier city users. In 2019, we’ll further drive user engagement time spend growth by boosting content consumption and social interaction of the lower-tier city users underpinned by our step-up effort in creating location-based social and content consumption context. Weibo will further penetrate into lower-tier cities, leveraging our core strength in social attributes and into film discovery, coupled with our effective channel investments. Second, on user engagement, our emphasis this year is to increase frequency of usage by each Weibo user. To achieve this purpose, our first area of focus is to drive content generation and user engagement with strengthening our cooperation with partner in public sector, including media outlets, TV stations and sports events and also launching brand campaigns that integrate vertical resources and feature participation of top content creators combined with our effort to diverse user interactive functionalities. For example, during the Chinese New Year this year, we focused on aggregation of video content and innovation of online interactive activities to enhance user engagement, leveraging our collaboration with CCTV’s Chinese New Year Gala. As a result, we are encouraged to see higher usage of Weibo in such context with speeds posted surpassing 100 million, facilitating over 300 million social interactions and over 5 billion short video reviews. These three measures all growing at double-digit percentage year-over-year. We also organized the #ChineseNewYear photography contest in concert with CCTV News encouraging users to capture moments in their life through the spring festival in the forms of pictures and videos. During the 20 days context, over 10 million related photos and video contents were generated on Weibo, with nearly 100 quality photographics – photographic work selected to be shown on CCTV programs. The topic of the context was viewed over 10 billion times on Weibo during that period. Our second area of focus is further enhance social attributes of our user products and improve social interactions among users. For instance, we have established a social interaction arena [Classic Native substance] [ph] based on secret topic communities and advanced group functions in the past two years. User penetration and user engagement generated through this two functions grew nicely year-over-year, with user interaction within secret topic community. The number of daily average users who access that group and their daily average user, all delivering double-digit growth year-over-year in March 2019. We believe, our step-up investment in the social attribute of our user product will play a critical role in growing our user base, improving user engagement and particularly enhancing Weibo users content consumption frequency. Specifically, content consumption information feed grew very robustly in 2019. Our emphasis on social attributes of our user product could enhance the competitive advantage of our product amid enhanced competition in the industry, laying a solid foundation for solid user base expansion and adding [ph] monetization efficiency underpinned by user frequency improvement on the platform. Next on content. Let’s start with content consumption. For the relationship-based feeds, we further enhance content distribution capability based on social relationship, leading to high efficiency in social content consumption and improved the user engagement. In the first quarter, the average refreshment per user for the relationship-based feed further increased year-over-year. For the interest-based feeds, we continue to optimize algorithm backing the feeds. On the one hand, the refined algorithm in enhanced exposure of contents from hot search trend and topic in interest-based feeds, leveraging stronger synergies within these two – these products. On the other hand, we enhanced our data mining and distribution capabilities of contents from mid-tier and long-tail verticals in terms of traffic viewership, which led to over 50% year-over-year growth of content exposures from this vertical in interest-based feed. Subsequently, in March, both user fill and monthly refreshment of interest-based feed continue to grow from the same period last year. From the content generation perspective, as of March 2019, Weibo’s partnership with MCN has exceeded 2,800. We will still host distinct leaderships in area of top content creators,with number of top content creators post and views generated in March 2019 all maintaining double-digit growth year-over-year. Regarding video content generation, in the first quarter, daily video post by top content creators increased almost 50% year-over-year, primarily driven by PGC video content. The robust growth of PGC video content generation was attributable to the below two factors. First, benefiting from the rich expression of short videos, we saw increasing adoption of video format among top content creators. For example, VLOG, which caught on last year offered content creator a better experience to express their personalities to capture daily live moments in a video format. Compared with photo and text, video format offer content creator a more vivid and immersive experience to interact with fans. In March, the number of daily post on VLOG grew over 50% on a sequential basis. Second, Weibo video community enable us to derive massive target user topic to high-quality video content creators. In the first quarter, we proactively invited content creators to generate quality video content or single out quality video contribution and then offered healthy traffic support to these video contents in interest-based feed. We saw meaningful growth in average video view of those videos being selected. Over the next two quarters, we will further strengthen traffic support mechanism through selective quality video content from two aspects. First, we’ll distribute this quality video contents through multiple feeds to ensure and enhance their content exposure. Second, we will more precisely distribute those video content to target users with different interests to various vertical channels within the video communities, which further promote this content exposure, while solidify the new things for video content consumption on Weibo. We are encouraged to see that the average daily time spent per user for those who access the video community tab more than doubled compared with that for those who didn’t. This year, we will establish an operating mechanism for video content generators to further development video community, which will fortify Weibo’s competitive edge in the PGC content area. This year, we’ll continue to execute against our vertical content strategies with a special focus on building out ecosystem around top verticals and empowering top KOLs to uplift their fans engagement and thus better monetize within our ecosystem. Through years of investment, Weibo had well established the monetization ecosystem for content creators to monetize through advertising, e-commerce, live streaming and paid subscription, et cetera. This year, we’ll facilitate more top content creators to benefit from the ecosystem, further reinforcing the platform ecosystem around the content, influence and monetization. Moreover, for mid-tier and long-tail verticals, we’ll focus on expanding the scale of top content creators and uplifting their influence. Take aviation and collection of verticals as examples. In the first quarter, the two verticals ranked among top five out of the six verticals – 60 verticals by year-over-year growth in the scale of top content creators and monthly views. In particular, the collection vertical was the most rapid growing vertical, with monthly viewership more than doubled year-over-year. Lastly, on monetization, KA revenue continue to grow robustly in the first quarter increasing 31% year-over-year with 39% on a constant currency basis. We attributed the strong growth to multiple reasons. First, in the past several years, we benefited from the radio ad partnership from offline to online for brand advertisers. Second, we will capitalize on the trend that an increasing number of trend customers desire to associate their campaign – campaigns with a blockbuster IP and also accurately measure their campaign results through data analytics afterwards, leveraging IP partnership with TV station and celebrities, as well as in new marketing program with Alibaba, Weibo continue – continuously validate this capability to satisfy customers various marketing demands. Third, we pioneered the innovation in social marketing product and ad formats in the digital ad industry and showcase desire to ROI to customers with a series of successful cases. For instance, we offer integrated social marketing solution for customers to uplift their marketing performance that associating Weibo’s ad inventory with our rich IP content resources, such as celebrities, variety shows, TV programs and films. Take the marketing campaign of Illy, the national famous dairy group as an example where Weibo worked closely with the TV program SINA on 2019 to maximize the brand and marketing effect of Illy. During the campaign for the first time, fans interaction on Weibo greatly impacted the competition rules of the TV program, effectively transforming the contestants and their fans into Illy’s endorsers. Weibo also proactively invited over 30 [in-grow] [ph] celebrities and over 100 participants [indiscernible] to generate around 500 posts, with growing 1.6 billion views, 20 million interactions, significantly uplifting Illy’s brand exposure. In total, views on topic discussion around the SINA 2019 program exceeded 20 billion. According to [indiscernible] research, the campaign drew up users’ brand preference on Illy’s promoted products by 41% and desire for consumption by 25%. SME business on the other hand will continue to face intense competition across the feed of advertising market. First, top SME customer ad spend became more scattered across platform bloating a traffic search in ad inventory release into the market. The oversupply of ad inventory also caused pricing pressure in the bidding process across the industry. And meanwhile starting from the third quarter and fourth quarter of 2018, macro uncertainties and pricing and financing environment also weighed on the growth of that entire SME end market. In response to these challenges, we took specific steps to form a separate sales team to directly serve our top SME customers aiming to improve their ad performance. We also enhanced our capability to acquire mid-tier and long-tail customers to adjustment to our sales agency structure. Overall, our SME’s business reached a thaw [ph] in March and April and started to recover in May with double-digit sequential growth in daily ad spend. As this above initiative gradually play out, we estimate that our SME ad business will be covered in a more meaningful way in the latter-half of 2019. On the ad product front, we had made plenty of optimization as well. For example, we launched an automatically recommended targeting data package on [indiscernible] system to meet customers industry-specific targeting requirements. We saw double-digit growth in ECPM and ad engagement for the same customer upon adoption of such package. We have also refined functionalities of vertical video ad product in terms of traffic direction and social interaction, leading to double the click-through rate and a higher sell-through rate, as well as customers’ purchase intention. Finally, on gaming sector, despite a resumption of gaming license approval and modest recovery of ad spend in the quarter, our view is that it will still take one or two more quarters for a market rebound In view of the current situation, we have nevertheless stepped up our operating efforts to engage more users in the gaming sector, hoping to lay a good foundation for the monetization in the future. With that, let me turn the call over to Fei Cao for a financial update.

Thank you, Gaofei, and hello, everyone. Welcome to Weibo’s first quarter 2019 earnings conference call. Before the detailed financial review, I would like to remind you that my prepared remarks will focus on non-GAAP results and all the comparisons on a year-over-year basis unless otherwise noted. Now let me walk you through our financial highlights for the first quarter 2019. Weibo’s first quarter 2019 net revenue was $399.2 million, up 13%, or 21% on a constant currency basis. Operating income reached $136.8 million, representing operating margin of 34%. Net income attributable to Weibo was $128.5 million, representing a net margin of 32%. Diluted EPS was $0.56 compared to $0.50 last year. Let me give you more color on our first quarter 2019 revenue growth. Advertising and marketing revenues for the first quarter 2019 reached $341.1 million, up 13%, or 20% on a constant currency basis. Mobile ad revenue was $288.4 million, up 19%, or 26% on a constant currency basis, representing 85% of total ad revenue, up from 18% last year. Let’s start with KA. In the first quarter, our KA ad revenue reached $168.8 million, up 31%, or 39% on a constant currency basis. Despite macroeconomic completion and a highly competitive digital advertising market in China, our KA sector continued a strong momentum and demonstrated the resilience we grabbed from Weibo’s unique value proposition to brand advertisers as indispensible platform for mobile and social marketing demands. Among various brand industries that Weibo covers, we’re particularly impressed with strong performance of FMCG sector, as Weibo consistently adjust value for these customers to target broader audience to enhance brand awareness and deliver better ad performance through our differentiated social marketing tools and the powerful KOLs’ influence. Turning to SMEs. In the first quarter, Weibo’s SME ad revenue reached $155.7 million, up 5%, or 12% on a constant currency basis. We’re pleased to see solid growth from our field sectors such as e-commerce, many attributable to team’s efforts to optimize targeting capability and improve our ad content for these customers. This positive move we continue to face challenges from [indiscernible] segment, especially high ARPU categories amid macro uncertainties, as well as from attrition in the performance ad market. Ad revenue from Alibaba was 16 – was sorry – ad revenues from Alibaba were $16.6 million, a decrease of 37%, or 33% on a constant currency basis. This decrease is partially resulted from a tougher comparable base in the same period last year, where Alibaba actively invested in marketing campaign, which will run out for fourth quarter 2018, such as a sponsorship for 2018 Chinese Lunar Year Gala and the Winter Olympic Games. On top of this, as we mentioned in the third quarter, the ad spend from Alibaba highly correlated to its marketing strategy, which may change time from time. Value-Added Service. VAS revenues was $58 million in the first quarter, up 24%, or 31% on a constant currency basis. This growth was primarily driven by increased revenue contribution from live streaming business. Turning to costs and expenses. Total cost and expenses for the first quarter was $262.4 million, up 14%. The increase in cost and expenses was primarily due to the incremental half of revenue share we incurred in that live streaming business and increase in personnel-related costs and expenses. Sales and marketing expenses remained flat year-over-year and the sales and marketing expenses as a percentage of revenue decreased 4 percentage points from the same period last year, reflecting further operating efficiency, mainly achieved through more disciplined channel investments. Operating income in the first quarter was $136.8 million versus an operating margin of 34% at similar level compared with last year. Turning to income tax. Under GAAP measure, income tax expense for the first quarter was $21.1 million, compared to $18.3 million last year. Net income attributable to Weibo in the first quarter increased 14% to $128.5 million, representing a net margin of 32% last year. Turning to our balance sheet and the cash flow items. As of March 31, 2019, Weibo’s cash, cash equivalents and short-term investments totaled $1.49 billion. In the first quarter, cash provided by operating activities was $18.8 million. Capital expenditures totaled $7.7 million and depreciation and amortization expenses amounted to $6.2 million. Now let me turn to our financial outlook. We anticipate our second quarter of 2019 revenues to be in the range of $427 million and $437 million, or an increase of 7% to 20% year-over-year on a constant currency basis. This assumes currency rate of RMB6.9 to US$1. This forecast reflects Weibo’s current and preliminary view and is subject to change. With that, let me now turn the call over to the operator for Q&A session.

Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Your first question comes from the line of Binbin Ding from JPMorgan. Please ask your question.

Good evening, management. Thanks for taking my question. My question is about SME advertising revenue. As you and many other Internet companies indicated in their 1Q earnings report, condition in the inventory surprise. So one major reason leading to the [indiscernible] of the performance as growth. I’m just wondering if management can share some color regarding your current views in terms of the competition intensity on Weibo’s SME advertising versus last year? And what kind of measures are you going to take in response to this competition? Lastly, how should we think about the long-term growth rate of SME advertising revenue, say, in two to three years? Thank you.

[Foreign Language] [Interpreted] Based on our ad industry tracking and their peer operating results, virtually, we see the overall ad market growth is significantly slowing down or even a cutback in the first-half of 2019. This was mainly caused by the macro and the regulation headwinds, as well as the competition on the inventory supply side. For us, we saw sluggish ad growth from some of our top SME customers since the latter part of 2018, particularly in those industries hit hard by macro and the regulation factors. On top of that, pricing pressure across the industry caused by the oversupply of inventory in the market, the growth of our SME business was short of expectations. Also, I think, just for particular industry, on the gaming part, the hope of the licensing approval for gaming happened in Q2 2018, which means gaming customers still contribute a very meaningful revenue to us in the first quarter of 2018. So the tough comp was another reason for the deceleration in our SME business. So coming back to our results, in response to the external environment analytics competitions, we have been focusing on three areas since fourth quarter 2018 and we are – start to see some initial progress. One is, we introduced the social marketing playbook to SME as well, such as the KOL marketing to highlight our unique value proposition in the market. Number two, we beefed up our efforts in optimizing our advertising algorithm, so that we could improve our targeting and ad conversion and ultimately customer ROI. This is very essential for both our customer acquisition and retention. As – to give you some color, our e-commerce customer, particularly Taobao merchant, ramped up – ramp up their ad spending on our platform in Q1 2019, mainly to cause a better targeting on our platform, as are indicated in the prepared remarks as we have introduced the target data package to them. The other thing is we initiated a series of adjustments to better line up our agency or distribution channel structure and incentive mechanism to encourage them to develop the new industry and customers. We started to provide direct service to our top customers to give you an update since 2019 Q1, we saw higher percentage of revenue coming from new customers, as their spending also continue to increase in Q2. But I think that will be – take a while and – to see meaningful ARPA to go up for those new customers. So this is quite typical as new customer generally have low ARPA in the initial stage. So for us in the coming quarters, our net step is to further work on our service and the targeting gradually to drive up their spending. Just try to give a more updated information. We – if we revisit all the monthly figures, we believe the revenue growth for SME costs is the bottom for the month of February, March and April. We saw relative meaningful rebound in May, even though we continue to experiencing price decline in our ad service. Our daily ad spend has grown over 20% on a Q-over-Q basis. Having said that, I think, we still need more time to fully execute against these strategies to drive a more considerable growth. So currently, our task is focusing – or currently, our take is that we will probably take more – two more quarters for SME vendors to return to a healthy growth rate with our focusing – with our focus much more on the new customers and then grow ARPA versus the CPM itself. We believe the customer structure change and the product optimization are essential for our platform in the longer run. For the gaming sector, which, I think most – a lot of people asking questions, we see initial recovery, so ad spend from gaming sector was still – at its relatively historical low level in Q1 2019. We are encouraged to see some resumption of gaming license approval in a gradual turnaround in the industry and our ad from the gaming sectors will be better in Q2 as well. However, we believe that in the second-half, our gaming revenue will be returned to the first two meaningful percentage of first-half 2018. So that still – will still take a little bit more time to get there.

May I have a quick follow-up on the expansion into the new customer base in new category. So are there any specific industries are we going to focus in the next few quarters and we – these new initiatives bring some support to your revenue growth in 2019? Thank you.

[Foreign Language] [Interpreted] I think in terms of the segments for new customers, it continues to be relatively broad. So we’re talking about auto, we’re talking about e-commerce, even the gaming sector. Historically, our key SME customers, I mean, meaning those top SME customers takes relative large percentage of our total SME revenue. However, we are slowly adjust – we’re slowly making adjustments with this composition. Now we are giving priority to new customers for certain new inventories. So for us, scale and the market share being the key focus at this point.

Great. Thank you for the color. Thank you.

Your next question comes from the line of Binnie Wong from HSBC. Please ask your question.

Hello, this is Freya on behalf of Binnie Wong. My question is regarding the user growth strategy. So the company mentioned that we are going to increase the online video sector exposure. So I was wondering like what is – especially, like investment we’re going to make in this sector and how we expect our user to grow in the rest of the year? Thank you. [Foreign Language]

[Foreign Language] Interpreted] Even though I mentioned that our engagement – user engagement was primarily benefiting – user engagement and time spend growth has been major benefit – benefiting from our new video tab. But for the scale growth on the platform, it’s more coming from our social – our efforts in enhancing the social attributes on the product. I’ll probably go back to look at fiscal 2018. If you are familiar with our results, particularly our increased investments on user growth in 2018 through the channels. We have achieved a relative solid user scale in 2018 by means of our increased investments. However, these new users came to our platform, our total user scale expansion lagged behind the growth of user engagement, especially the growth of the users’ social interaction as our platform core competence lies on our users’ social relations and interaction. Our data tracking through the user behavior of new user versus the – like old user or loyalty users has proved that. As a result, in the first-half of 2019, we will put more emphasis on promoting our user engagement and the frequency of usage by each user through enhancing their user social interaction. Along with the increase of user frequency, we believe our monetization scale and efficiency could also grow. For – if you look at our DAU versus MAU percentage, you might have noted that our -- such percent in the number has to – has moved to a higher percentage level sequentially. And for the – from operation key performance – KPI perspective, the user content consumption frequency and the volume of their content consumption will be our key focus or the key KPI for right now. From user growth perspective, there’s still a large room for us to further penetrate into lower-tier city. However, as I indicated, the first-half of 2019, we will be focusing to increase the user engagement level of those customers we acquired in last year. So we tend to convert those new users from pure content consumption users to users that will be engaging in social interaction on the platform. In terms whether we will or we’ll not adjust our user growth strategy, that depends on how the progress we’re making in terms of user engagement growth performance on the operation. So there’s a possibility we will adjust our channel marketing strategy, particularly in the lower-tier city in the second-half as we judge on the market condition, as well as to develop our current user base.

Your next question comes from the line of Gregory Zhao from Barclays. Please ask your question.

Hi, management, thanks for taking my questions. Two quick questions. First, can you share any colors of the user activities of your new version Weibo app? And how does the new version can help improve your user engagement? And secondly, we see your KA advertising still maintain very strong growth momentum in Q1. While consistent of some of your other peer companies, your media advertising have some very substantial differentiation. We want to understand your bargaining power in key advertising and what’s your current price trend and the contract, especially your contracts signed after the Chinese New Year compared to last year? Thank you.

[Foreign Language] [Interpreted] I think to comment on the new version, particularly on the new video community, I think, as I indicated in the prepared remarks, that has helped in the time spend of our users in a meaningful way. For us, we think the functionality of our video community is to attract KOL in the video creation area, so that PTC – the high-quality PTC video creators will be able to have a specific place to land their product – to land their products or their content. So effectively, we will have the ability to track users in the video community as well. So we have seen significant growth from video KOL content creation in the first-half – first quarter. We are in the process of – to optimize their creation and their content in an easier way for users to consume. There’s updated version likely to come out in the month of June. By then, we will push for a – we will push much harder for user –new users or user engagement at the video community tab. In terms for the lower-tier-city users, we are actually in the progress of generating a new feed to specifically targeting these users. What we have noted that users from third, fourth-tier cities, they are not typical user to consume content related to celebrities or hot topics or hot trend on Weibo. Their interest has – they have tendency to consume much more UGC content compared to people from first or second-tier cities. With that, our feed has been revised that you provide a more UGC content and we have started pilot run in selected locations. The initial test has indicated with updated content with focusing on UGC, the retention rate per user – the user retention rate in third, fourth-tier cities has doubled for those content offered for the first and second-tier city people. So that’s on the question on the user part. From the key accounts, I think, I’m just taking this question. So I think, in general, as advertising is very sensitive to economic cycles. So with the current market – current macro situation, we are tempted to take a much more cautious view on the overall growth for ad market. So despite the strong key accounts growth in first quarter 2019, we are beginning to see some signs of macro headwinds weighing on the spending from several factors. I think, those ones are – if I break into different industries, we see FMCG being very resilient, particularly in the dairy products for beverage customers. For automobile, on the contract was very vulnerable in a challenging market. I think that – well responded to the decline in the auto sales in the general market. In terms our same contract execution, it was better than we initially expected. We see meaningful growth in terms of the overall [indiscernible] contracts signed in the first and even going to the second quarter. For us, I think the key accounts continue to be a very important component for our revenue growth. And I think, in a market like this, other than the traditional marketing dollar where we try to take a cut on that, we also are tapped into key accounts in those areas that drives – tap into brand customers’ performance driven by ad budget. So these were typical, we would say, the brand e-commerce budget. This is the one area, I think, we perhaps advantage, particularly with our cooperation with Alibaba under the uni-marketing program. So that’s the – because the data existing between these platforms, our ability to promote their products and achieve good conversion results remain as very competitive in the marketplace. So that’s on the key accounts. I think, Greg, you did ask a question on the price part for the key account. I think so far we see relative stable pricing for key accounts, so there’s not so much of a change of our price mechanism at this point for this particular segment.

Thank you very much.

I would like to hand the conference back to the presenters. Please continue.

Thanks, operator. This concludes our conference call today. Thank you for joining us. See you next quarter.

Ladies and gentlemen, that does conclude the conference for today. Thank you for participating. You may all disconnect.