Weibo Corporation (WB) Q4 2020 Earnings Report, Transcript and Summary

Ladies and gentlemen, thank you for standing by, and welcome to Weibo Reports Fourth Quarter and Fiscal Year 2020 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. I would now like to hand the conference over to your first speaker, Sandra Zhang, Weibo IR. Thank you. Please go ahead.

Thank you operator. Welcome to Weibo's fourth quarter and fiscal year 2020 earnings conference call. During today our Chief Executive Officer, Gaofei Wang; and our Chief Financial Officer, Fei Cao. The conference call is also being broadcast on the Internet and available through Weibo's IR website. Before the management remarks, I would like to read you the Safe Harbor statement in connection with today's conference call. During today's conference call, we will 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 conference call and elsewhere. Further information regarding this and other risks is included in Weibo's Annual Report on 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 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 excludes certain expenses, gains or losses, and other items that are not expected to result in future cash payments or are non-recurring in nature or are not indicative of our core operating results and our outlook. Please refer to our press release for more information about our non-GAAP measures. Following management 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, Gaofei Wang.

[Foreign Language] Thank you. Hello everyone and welcome to Weibo's fourth quarter and fiscal year 2020 earnings conference call. On today's call, I'll share with you highlights on Weibo's user product and monetization review the progress made in 2020 and elaborate our strategies for 2021. [Foreign Language] Let me start with our fourth quarter financial results. In the fourth quarter our total revenue increased 10% to $513.4 million, mainly attributable to less impact from COVID-19 pandemic to the advertising business as well as our efforts to optimize the competitive strategy for brand and performance ad business. Advertising and marketing revenue reached $453.5 million, an increase of 12% year-over-year with 91% of ad revenue coming from mobile. In the fourth quarter, non-GAAP operating income reached $204.1 million, an increase of 12% to 21%, year-over-year, representing a non-GAAP operating margin of 40%. [Foreign Language] For full year 2020, Weibo's total revenues reached $1.69 billion, a decrease of 4% year-over-year. Advertising and marketing revenues were $1.49 billion, a decrease of 3% year-over-year. Non-GAAP operating income reached $579.6 million, representing a non-GAAP operating margin of 34%. [Foreign Language] On the user front Weibo's MAU reached $521 million. And average DAU reached to $235 million in December 2020. 94% of Weibo's MAU came from mobile. [Foreign Language] As we review 2020, we faced two major challenges. First, on the user front, although, the pandemic in the first half of the year brought us large scale users to consume pandemic-related needs and hot trends, it had a negative impact on the content generation of entertainment vertical and certain other areas such as, tourism and sports, which resulted in less user engagement in this sector. With progress made on the pandemic control, we adjusted our strategy accordingly in the second half of this year, putting more emphasis on our core competence in hot trends, social functions and video. So far we have seen an uptick of our overall traffic in the first quarter compared to last the December. [Foreign Language] Second on monetization. The pandemic has hit some sector of our business hard early last year. However, with a well-controlled pandemic situation and the recovery of the ad demand, Weibo's social marketing value proposition earned wider recognition among brand customers, leveraging our unique marketing offerings such as hot trends, celebrity and KOL marketing, as well as brand price performance solution. As a result, our brand ad revenues delivered a solid rebound in the second half of this year and achieved double-digit growth year-over-year in Q4 with number of branding customers spending with us setting a new record. For performance ad business despite certain pressure from advertising and market competition, the decrease of our performance ad revenue in Q4 further narrowed compared with prior quarters, mainly thanks to the fully upgraded ad bidding system, super FST and continued robust growth in gaming and education sectors under the brand plus performance model. Next, let me share some color on our progress in product and monetization in Q4, as well as layout key initiatives for 2021. On the product front, starting from Q4 last year, we further enhanced Weibo's differentiated competitiveness in hot trend and social attributes. Coupled with efficient channel strategies, we stabilized our user scale and further drove user engagement. Concurrently we also beefed up our investment in the video sector to strengthen users' mind set of using Weibo for video consumption so as to enhance our competitiveness in user acquisition. On the channel front, in Q4, we optimized channel strategy for new and recalled users combined with hot trend and topic products. When hot events occur, we will encourage media accounts and KOLs to discuss around topics through product and operating mechanism, providing real-time topic-related content to users. With the optimized strategies to further enhance the platform's confidence in this recall and retention through hot trends, bringing our strength in content offering into supply. Taking the New Year's Eve as example, remember our New Year's Eve relating toward the pass $120 million, up 77%, compared with last year and recalled more than 60 million users back to our platform. On the social front, for these users recalled through hot events or channel investment, we focus on improving their consumption depth and user frequency in the relationship-based feeds. To elaborate, we focus on improving user experience in relationship-based feeds to data mining and quality social content based on several dimensions, such as intimacy of social relations, frequency of visits, and amount of discussion by followers, et cetera. With such quality content offer, we could further deepen their consumption, as well as enhance user retention. Additionally, we focused on enhancing diversity of content distribution in the information feeds in order to drive user stickiness, interaction, and consumption. For instance, in the fourth quarter, we extended real-time consumption of video content through this simultaneous distribution in our core feeds. As a result, the effective time spend per user on a post really recommendation feed increased over 30% and the effect of video views posted each recommendation increased over 10%, compared with Q3. On the video front in 2020, we reinforced our product offerings and operation mechanism and attracted a great number of quality video content creators to Weibo. In the second half of 2020, we launched the video account program to incentivize Weibo's top content creators to shift toward video content generation, so as to encourage more video production and consumption. We saw a significant uplift in the number of video accounts. Currently, the number of registered video accounts has surpassed a million among, which over 15,000 video accounts already have more than 1 million followers per each. By verticals, there is a good proportion of video produced by top content creators in the media and variety show verticals, but we still need to increase that to many other sections on the platform. This year, we will continue to improve the overall experience for video accounts, scale-up video content generation among top content creators, as well as strengthen the effective distribution of video content in feeds and video community, so as to boost the video content consumption and improve the platform's overall video content ecosystem. [Foreign Language] Let me briefly layout our strategies for 2021 on the product and operation front. We seek to extend user base and engagement from the following three aspects. First, on the channel investment, leveraging our competitive advantage in these acquisition costs will ensure channel investments through traditional channels, and focus more on channel investment to improve user engagement, while strengthening the synergy between channel investments, and subsequent content consumption, and thereby increasing user engagement and retention. Second, on core competence, we will continue to solidify Weibo's competitive mode as a leading social media platform. From product perspective, we will improve core features of hot trend and social interactions and improve user stickiness and interaction among users' core user groups. On accounting system side, we will step up our efforts to empower top content creators to monetize within our ecosystem, which will in turn stimulate their content generation and interaction with fans, driving Weibo's user engagement. Finally, on video content, through video accounts we will accelerate the transformation of Weibo's key content creator group toward video creation and promote the supply and consumption of Weibo's video contents. And meanwhile, we are focused on content operation on key verticals such as TV series, variety show, and gaming verticals to cultivate users' consumption behavior through our differentiated video content offerings and further strengthen users' loyalty to the platform through videos. [Foreign Language] On the monetization front, our KA ad revenues in Q4 increased 18% year-over-year. The rapid recovery of KA business in the second half of the year were mainly driven by the following factors; first of all, from the perspective of the market environment most industry sectors have returned to normal operation in the second half of the year and gradually resumed ad replacement except for few sectors such as entertainment tourism. That has not fully recovered from the pandemic. And meanwhile, the pandemic has further driven ad budget shift from offline to online. We saw top brand customers and also those emerging brands embracing Internet platforms as their major campaign arena. Secondly, KA clients have shifted more of their budget from TV and long-form video platform to social and short-video platform and lowering the user engagement shift. With this trend, social platform had more strength in KA marketing. Finally in KA advertising, Weibo highlights its marketing strategies on KOL content IP and brand plus performance offering leveraging its robust content ecosystem. But one thing, we facilitate better content marketing for top KA clients. For another, we lower ad placement barriers for brand customers, especially, mid-tier customers through brand price performance ad offerings and thus deliver better ad efficiency. For example, throughout 2020, we had nearly a 1,000 content marketing projects leveraging 100s of celebrities, 1,000s of KOLs and more than 30,000 KOCs to participate in brand content-based campaigns achieving way better results than pure branding campaigns. [Foreign Language] Moving on to SMEs. In 2020, we continue to see intense competition in the performance ad market. That said, our SME and revenues decreased 5% year-over-year in the fourth quarter improving from last quarter in terms of ad new trends. Let me briefly recap our progress made in our performance ad sector in the year of 2020. [Foreign Language] On the ad product front, first, we focus on enhancing the overall efficiency of our real-time bidding system, namely super FST and further optimizing its algorithm. Second, we launched several advertising tools such as WeiboEvents and ad solution, which enables marketing content posted by celebrity and KOLs to reach a more accurate target group instantly. Leveraging the influence of celebrities and KOLs, we can maximize the campaign effect while reducing customer cost at the same time. On the sales operation front: first, we optimized the SME sales model for key industries to directly serve more clients, so that we could respond to and fulfill clients' needs more efficiently. Secondly, we further led agency to improve their service capabilities and transform into service providers. Third, we offer industry specific ad solutions to improve ad performance for different industries, leveraging our operational capability around topic and events. With the implementation of these above mentioned strategies, we saw robust growth in gaming and education sector this year maintaining a triple-digit growth year-over-year in the fourth quarter. In the second half of the year, we gradually extended such industry specific solutions to Internet service and some offline O2O industries to capture the higher wallet from key industries. [Foreign Language] In 2021, we will continue to enhance our monetization skill and efficiency from the following aspects: first, on ad products based on Weibo's unique attributes as a social media platform with younger users, we will continue to strengthen the competitiveness of our social ad products and further capture brand plus performance budget and KOL marketing ad dollars to reach more emerging clients as well as obtain incremental budget from middle tier and top clients. Hopefully, those client member and ad part could serve as drivers of our growth. Second, on sales operation, we will further develop our industry-specific solutions and support our industry-based sales team to improve organizational efficiency from the aspects of sales policy, operational synergy, product optimization and service capability, et cetera. As such, we could improve our wallet share through more diversified drivers from an industry perspective. Finally, on ad technology. Building on the upgraded Super FST, we will continue to optimize the ad targeting and the conversion rate of OCPX, so as to increase the placement efficiency and ROI clients. Coupled with the full funnel ad optimization, Weibo is well positioned to improve our ECPM in 2021. And meanwhile, we have strengthened our video ad technology and monetization efficiency to gradually unleash the potential of video traffic monetization. To sum up, in 2021, with more monetizable traffic generated from the growth in user base and engagement, we will step up our efforts in ad products, sales operation and ad technology to increase Weibo's monetization scale, efficiency and market competitiveness. With that, let me turn the call over to Fei Cao for a financial review for the fourth quarter and fiscal year 2020.

Thank you, Gaofei, and hello everyone. Welcome to Weibo's fourth quarter and fiscal year 2020 earnings conference call. Let's start with user metrics. In December 2020, Weibo's MAUs reached 521 million, representing a net addition of five million users on a year-over-year basis. Weibo's average DAUs reached 225 million, representing a net addition of three million users on year-over-year basis. Mobile MAUs represented approximately 94% of total MAUs. As a reminder, my prepared remarks would focus on non-GAAP results and all comparisons are on a year-over-year basis unless otherwise noted. Now let me walk you through our financial highlights for the fourth quarter and fiscal year 2020. Weibo's fourth quarter 2020 net revenues, was $513.4 million, an increase of 10%. Operating income was $204.1 million, an increase of 21%, representing an operating margin of 20%. Net income attributable to Weibo is $212.7 million, an increase of 21%, representing a net margin of 41%. Diluted EPS was $0.92 compared to $0.77 in 2019. For full year 2020, total revenues reached $1.69 billion, a decrease of 4%. Operating income was $579.6 million, a decrease of 12%, representing an operating margin of 24%. Net income attributable to Weibo is $547.5 million, representing a net margin of 32%. Diluted EPS $2.38 compared to $2.78 in 2019. Let me give you more color on our fourth quarter and full year 2020 revenue growth. Advertising and marketing revenues for fourth quarter 2020 was $453.5 million, an increase of 12%. Mobile ad revenues reached $413.8 million, representing 91% of our total ad revenue, up from 88% last year. Full year 2020 advertising and marketing revenues reached to $1.49 billion, a decrease of 3%. This mobile ad revenue is contributing 90% of total ad revenue, up from 87% in 2019. Beside unprecedented challenges from COVID-19 and resulted full year single-digit revenue decrease, we are pleased with the solid recovery in the second half of 2020 underpinned by the overall ad demand pickup in the domestic market, breath of new economy bringing incremental marketing demand, as well as our relative ad growth to capture new end markets and additional ad wallet share of existing fans. Let's start with KA. In the fourth quarter, our KA ad revenue was $226.8 million, an increase of 18% or 26%, excluding the impact from barter transaction. Our KA business booked accelerated year-over-year growth with the number of brand advertisers' spending in ads reaching a new record. Industry-wide, the recurring momentum for our KA business continues to be broad-based with key sectors such as FMCG and automobiles closing the year on a higher note. Our belief that entertainment, travel, and real estate sectors remained pressured as the sporadic COVID-19 cases in China in part postponed the recovery pace of new sectors in late 2020. Full year 2020 KA ad revenues reached to $741.7 million, an increase of 2% or 9%. On that percent including barter impact, representing 50% of Weibo's total ad revenue. Our KA business demonstrated resilience against tough market environment, speaking to Weibo's unique value proposition to brand customers. Weibo has gradually become the cornerstone of many advertisers' marketing spend, as we offer further marketing solutions to serve their branding plus performance needs. In 2020, we also notably captured incremental ad wallet through our differentiated KOL marketing tools, as well as unique products such as search and targeted products, as this resonated well with customers' demand. Looking forward, with continuous recovery of ad demand and opportunities brought forth by new economy, we continue to see headroom to incenting our customer base, as well as potential to tap into incremental ad wallet. We believe we are well positioned to solidify and further uplift our competitiveness in the brand advertising market. Turning to SMEs. In the fourth quarter Weibo's SME ad revenues was $167.2 million, a decrease of 5%. We continued to narrow the year-over-year decline rate, leveraging the nice momentum of online sectors, particularly gaming, education and e-commerce. That said, certain offline customers continued to face headwinds, particularly amid sporadic outbreak of COVID-19 cases in multiple areas in China. Full-year SME ad revenues were $592.7 million, a decrease of 16%, representing approximately 40% of Weibo's total ad revenues, mainly due to significant impact from COVID-19, especially from offline sector as well as competition headwind. Although, the performance ad market in 2020 was challenging in many ways, we made strides in expanding OCPX coverage, driving video ad penetration, as well as developing integrated industry specific ad solutions, which all aim to enhance our ad performance. We're delighted to see these initiatives already bear fruit in early stage with the gaming and education sectors, booking triple-digit growth this year. The early momentum for these two sectors demonstrated Weibo's potential in delivering relatively competitive our ad in the market, leveraging our uniqueness in integrating Weibo's resources in content, KOLs and traffic. Ad revenues from Alibaba in the fourth quarter was $59.5 million, an increase of 57%, reflecting our cooperation with Alibaba to drive value from both platforms' brands and merchants during the peak e-commerce promotional season. Full-year ad revenues from Alibaba were $152 million, an increase of 55%. Apart from the fact that 2019 was relatively low base, the momentum of Alibaba ad revenue also reflected our efforts in serving integrated marketing demand for both platforms' brands and merchants. That said, ad spend from Alibaba highly correlated to its own business operations, especially its marketing strategies which may change from time-to-time. As communicated earlier, we cannot assure that such robust growth will be sustainable in the future. Value added service, VAS revenues was $59.9 million in the fourth quarter, a decrease of 4%. The decrease was primarily resulted from the decrease of live streaming business and was partially offset by the revenue contribution from the interactive entertainment company acquired and consolidated into the company in November 2020. Full-year 2020 VAS revenues was $203.8 million, a decrease of 14%, mainly resulting from a decrease in live streaming revenue. Turning to costs and expenses, total cost and expenses for fourth quarter was $309.3 million, an increase of 3%. The increase was primarily due to higher personnel-related costs and step-up in marketing spend and was partially offset by decreased general and administrative expenses. Full-year costs and expenses totaled $1.11 billion compared to $1.10 billion for 2019. Operating income in the fourth quarter was $204.1 million, an increase of 21%, representing an operating margin of 40%, compared to 36% last year, reflecting our solid recovery post-COVID-19 and our capability of delivering decent margin profile amid the market competition. Operating income for full-year 2020 was $579.6 million, representing an operating margin of 34% compared to 37% in 2019. Turning to income tax under GAAP measure, income tax benefit for fourth quarter was $25.3 million, compared to an expense of $31.1 million last year. The income tax benefit was primarily due to the recognition of preferential tax treatment for certain of the company's PRC subsidiaries, as well as reverse of recognition of deferred tax liabilities in prior periods related to certain investments. Full-year income tax expenses was $61.3 million compared to $109.6 million in 2019. The decrease was primarily resulting from changes in deferred tax liabilities related to fair value change on investments. Net income attributable to Weibo in fourth quarter was $212.7 million, compared to $176.7 million last year. Net margin was 41%, compared to 38% same period last year. Net income for full-year 2020 was $547.5 million, representing a net margin of 32% compared to 36% in 2019. Turning to our balance sheet and cash flow items. As of December 31, 2020, Weibo's cash, cash equivalents and short-term investments totaled $1.5 billion, compared to $2.4 billion as of December 31, 2019. The increase was primarily due to net proceeds from $750 million senior notes issued in July 2020 for general corporate purpose and cash provided by operating activities and was partially offset by the investment activities we made during 2020. In the fourth quarter, cash provided by operating activities was $321.2 million, capital expenditures totaled $8.4 million, and depreciation and amortization expense amounted to $10.7 million. On full-year basis, cash provided by operating activities was $741.6 million, capital expenditures totaled $34.8 million, and depreciation and amortization expenses amounted to $32.1 million. We delivered approximately $706.8 million free cash flow in 2020, an increase of 30% year-over-year, representing our capability of delivering high profitability and generating strong operating cash flow. Lastly, let's talk about our financial outlook. We anticipate our first quarter of 2021 revenue to increase by 25% to 30% year-over-year on a constant currency basis. This forecast also 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 the Q&A session.

Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. [Operator Instructions] Your first question comes from the line of Tian Hou of TH Capital. Please ask your question.

[Foreign Language] Gaofei has already elaborated our 2021 strategy, can you elaborate a little bit in detail about your outlook in user growth and as well as your channel strategy? Thank you.

[Foreign Language] So relating to this question, before answering the question about 2021 let's talk about the issues that we had in 2020. So, for example, due to the COVID-19 that we really had a historical high or reaching a peak of those number of users in Q1. But actually, normally in the past, after consuming some of our products like the hot topic products or hot trend products, those consumers or those users are going to be with us and retain with us, to further consume the entertainment and also the other vertical related products. But actually, because of the COVID-19, in the second half of 2020, we had a very good management and also the restrictions on the entertainment-related product consumption. So the retention rate, of those, kind of customers or users dropped. So those are the major reasons of causing us to have a decreased number of users in Q2 and Q3, majorly. So in Q4, we have been doing some kind of a work, for example, increasing the investment to the user acquisition cost. And also, we really increased some kind of productization, in order to attract and also retain those, kind of users. [Foreign Language] And also, you can see that, we have been doing some kind of things, right now, because rather than paying attention to MAU, now we pay more attention to the total consumption as well as the frequency of the consumption specific. So, we can interpret that into the following kind of parameters, for example, DAU, and also some kind of frequency of the consumption, and also the total scale of the consumption. So that is actually going to really help us to improve our competitiveness as well as our kind of inventory of the monetization. [Foreign Language] And also, in terms of our strategy in the future, in 2021, we would like to focus on the following items. So first of all, we had our traditional advantage in terms of acquiring those users through our hot trends. So in the past in 2020, actually we had some of the issues occurred in terms of increasing retention ratio and also helping the users to actually stay with us more and consume more frequently. So actually in 2021, in Q1, and also later this year, we are going to further emphasize on these two particular points. So that is to say, first of all, emphasizing on the consumptions related to the relationship-based feed. And also, we are going to encourage those video accounts to actually publish more videos. And also help and trigger the consumption around the videos by the users. So actually, through these, kind of ways especially through videos, we are going to really help to increase their retention ratio of our users. So actually we are very confident to overcome the difficulty and also get ourselves improved in later this year. [Foreign Language] And also lastly, I want to say that in terms of the 2021 trend. So first of all, talking about the year-on-year comparison, because we had a very high historical figure in Q1 of 2020, so it's not that meaningful for us to compare. But actually we are very confident to realize a month-to-month growth in 2021 Q1. And also another thing is that in terms of our channel strategy, we are going to really focus on increasing the retention ratio of our users and also really help to build a very good and also healthy growth on the number of users. So we are very much confident in driving the traffic and also driving the activity and also the retention ratio of the users in 2021.

Very helpful. Thank you. That's all my question.

Your next question comes from the line of Miranda Zhuang of Bank of America. Please ask your question.

[Foreign Language] Thank you for taking my question. So my question is, can you please share the ad spend outlook for the 2021? And what, kind of, your ad products and services will particularly gain traction and gain incremental budget allocations among your KA and SME clients across different industry sectors? Thank you.

[Foreign Language] And so let me answer this particular question. So first of all, in 2020 Q4, we have been seeing a very good recovery of our KA ad customer, especially we returned to the triple-digit growth. And also, we although had a year-on-year decrease on SME in Q4, but still that particular decrease rate has been reduced. And also, further in 2021, we're going to really see a kind of a very good growth on the brand customers, especially at the FMCG and also automotives, as well as the luxury as well. And also, in 2021, we're going to see also a very good growth for entertainment as well. And also, next part is about the SME. So this year, for example, we have seen a very good trend for gaming or Internet service, as well as online education, et cetera, et cetera, but actually we're not quite sure, whether or not we are going to see another doubling effect or doubling results of the gaming industry this year. And also, talking about the other, traffic diverting related SMEs, without a very strong demand on branding, actually in 2020, we were talking about those O2O or e-commerce businesses. We had a little bit -- another ideal performance in 2020, but still in 2021, we are going to see a further intense competition in the area that I mentioned. And also, next part is about the products. So, based on the social nature of Weibo, so we are going to really focus continuously on the kind of the strategy of the brand plus performance and also the content and also IP-based marketing strategies. So based on this particular content and IP-based marketing, as well as the strategy of brand plus performance, we have very good advantage in gaining the budget from the top-notch customers. And also, we do see that the, kind of, short video is actually a very big competitor through the OTV area. So we can see that in this particular thing. We do see that those customers from OTV actually had a very high requirement already kind of a content, and also the IP as well as the famous KOLs in this area. So based on the unique advantage of Weibo in terms of the IP and KOLs, and celebrities, we are very much positive to actually have the advantage of those OTV converted or transferred budgets and gaining that. And also, next part is that, we had also a very good development in terms of our information flow, like the super FST has been upgraded further. So we are going to see a kind of a triple-digit growth on OCPX as well. And also, the gaming as well as the educations as two verticals are increasing dramatically and also, because of our upgraded algorithm in this particular area. And also, talking about those particular customers, they do have the requirement, not only to gain traffic, but also they would like to do some kind of a brand promotion work. So because of that we are seeing that in 2021, we're very much positive to actually have that particular development, especially talking about the customer and e-commerce and also Internet services, et cetera.

[Foreign Language] Thank you.

We'll take the final question from Alicia Yap of Citigroup. Please ask your question, Alicia.

Hi, good evening. Thank you for taking my questions. Also, congratulations on the results and the guidance. My questions is related to the ad inventory and also the competitive landscape. So, how does management elaborate the situation you are seeing in 2021 versus last year in terms of the ad pricing pressure and the supply for these ad inventory as compared to last year and even as compared to 2019? And also, any comment on the margins trend for 2021. Let me translate very quickly. [Foreign Language]

[Foreign Language] So first of all, talking about the ad inventory, so before in the first question and also to that first question I already mentioned that actually this year in terms of our strategies for the users, we are going to actually see that more of our investment and also the product-related strategies are going to focus more on the DAU and also the consumption frequency of the users and the per capita consumption traffic of the users from the previous major focus on MAU. So that's to say this particular DAU increase and also more frequency of the consumption of users will definitely drive the development and growth of the ad inventory. However, kind of, speaking based on the Q1 result it's very difficult for me to give you a kind of forecast about this particular ad inventory in 2021, especially, for Q1. And of course, we do have seen very good growth on the other video platforms, but still we are very much focused on increasing the DAU and also the frequency of consumption of users and these strategies will definitely bring a growth on the ad inventory.

In terms of your margin question, I will try to take this question. With the revenue growth as our primary goal and at the same time, we want to enhance our competitiveness of our platform so we may increase our investment in marketing channels compared to last year 2020. So on this basis we expect our operating margin can still reach well in the high level that is to say maybe no less than 30%, but there still will be a certain decline maybe the impact the decline will be single-digit maybe 5% compared to the level of last year. So in summary in this year, the company's all of strategies is mainly focused on improving our revenue growth and continue to improve the competitiveness of the platform at the user product level so the cost and expenses level. The main areas of investment will be increased will improve the marketing channel investment. In last year 2020, due to the epidemic and other impact market channel investment was conservative that is down from the year 2019. So considering the competitive user market and leveraging Weibo's relatively advantaged new user acquisition costs, we will ensure our coverage of basic channels such as free installation and focus on increasing the investment in user engagement. And another area is personnel-related costs. To maintain -- in order to maintain our competitiveness in the market in some key departments as such our advertising business department and our R&D department there are certain personnel increase, headcount increase and also the salary raise. So last year due to the impact of the pandemic, the company also enjoyed some government benefit. This will impact our margin this year. So in summary, the effect on our margin will be dropped from year-to-year.

Okay. Thank you for the color. Yes, thank you.

This concludes our conference call today. Thank you for joining. We'll see you next quarter. Bye-bye.

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