Good day and thank you for standing by. Welcome to Weibo Corporation Fourth Quarter and Fiscal Year 2021 Earnings Conference Call. [Operator Instructions]. And now I'd like to turn the call over to the management team of Weibo Corporation. Thank you. Please go ahead.

Thank you, operator and welcome to Weibo's fourth quarter and fiscal year 2021 earnings conference call. Joining today are our Chief Executive Officer, Gaofei Wang; and our Chief Financial Officer, Fei Cao. The conference call is also being broadcast on the Internet and is available through Weibo's IR website. Before the management remarks, I would like to review the safe harbor statement in connection with today's conference call. During today's conference 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. We will assume 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 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 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 financials exclude certain expenses, gains or losses, and other items that are not expected to result in future cash payments or are nonrecurring in nature or not 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 up the lines for a brief Q&A session. With this, I would like to turn the call over to our CEO, Gaofei Wang

Thank you. Hello, everyone, and welcome to Weibo's fourth quarter 2021 earnings conference call. On today's call, I will share with you highlights in Weibo's user, products, and monetization review the progress made in 2021 and elaborate our strategies for 2022. Let me start with our first quarter financial results. In the first quarter we achieved solid revenue growth on both annual and quarterly basis. Many attributes were to our enhanced sales capability on key advertising industries as well as our efforts to further improve our monetization efficiency despite macros and industry has been on our advertising business. Our total revenue reached $616.3 million in the fourth quarter, an increase of 20% year-over-year. Advertising and marketing revenues reached $550.8 million, an increase of 21% year-over-year, with 94% of our revenue coming from mobile. In the first quarter, non-GAAP operating income reached $219.8 million representing a non-GAAP operating margin of 36%. So full year 2021, Weibo's total revenues reached $2.26 billion, an increase of 34% year-over-year. Advertising and marketing revenues were $1.98 billion, an increase of 33% year-over-year. Non-GAAP operating income reached $829.9 million, an increase of 43% year-over-year representing a non-GAAP operating margin of 37% On user front Weibo's MAU reached 573 million and average DAUs used reached 249 million in December 2021, an increase of 10% and 11% year-over-year respectively, 95% of Weibo's MAUs came from mobile. As we review 2021, Weibo navigate through industry changes and deliver solid results on user growth product and monetization. Leveraging our core positioning as a social media platform and differentiated market competitiveness. On product front, we sharpen our edge in core functions like cultural and social attributes. Coupled with effective channel investment, we achieved double digit percentage growth of our user base year-over-year. Exceeding the peak level we achieved that during COVID-19…

Thank you, Gaofei, and hello, everyone. Welcome to Weibo's Fourth Quarter and Fiscal Year 2021 Earnings Conference Call. As a reminder, my prepared remarks will focus on non-GAAP results. All monetary amounts are in U.S. dollar terms and all the comparisons on a year-over-year basis unless otherwise noted. Weibo had another solid quarter to finish 2021 with annual revenues surpassing the $2 billion mark, up 34% for the year despite macro and industry headwinds. On top of top line momentum, we also delivered decent operating leverage and a strong operating cash flow, generating $829.2 million in operating income and $778.9 million in free cash flow. Starting with user metrics, in December 2021, Weibo's MAUs and average DAUs reached $573 million and $249 million, respectively, representing a net addition of $52 million and 25 million on a year-over-year basis. In 2021, we have achieved a solid growth of user community, leveraging our strength in serving public conversation and effective channel investment. Turning into 2022, we will focus on integrating our product road map to reinforce our differentiation in serving real-time public conversation while navigating through the new regulatory landscape and making Weibo the go-to platform to find out and discuss what's happening. Meanwhile, we will pick up our investment in key content verticals such as sports and online gaming, positioning us well to tap into a broader user community and improve users' frequency and engagement. Now, let's me move you through our financial highlights for the Fourth Quarter and Fiscal Year 2021. Weibo's First Quarter 2021 net revenues was $616.3 million, an increase of 20%. Operating income was $219.8 million, representing operating margin of 36%. Net income attributable to Weibo reached $195.5 million, representing a net margin of 32%. Diluted EPS was $0.83 compared to $0.92 in 2020. For full year…

[Operator Instructions]. Our first question comes from Alicia Yap from Citigroup.

So I understand company no longer provide the official guidance after Hong Kong listing. But can management provide some colors or the direction as the latest sentiment by the advertiser, if January or February that you are seeing, is it more the same as the fourth quarter.

So first of all, I have to say that in Q1, we are seeing a very good growth in terms of the advertisement placement in terms of the industries of FMCG, the 3D products and automotive and luxury products as well. And also due to the external environment and also headwinds as well as the regulatory headwinds, some of the industries really experienced some kind of negative growth. For example, in Q4 of last year, we've been having a lot of [indiscernible] activities over the live streaming e-commerce. So originally, they plan to place some of the advertisement during the spring passive period in Q1 of this year, but actually stopped in doing so because of the headwinds of the regulation. So last year, in Q1, actually, these types of advertisement revenue accounted for about 5% of our total revenue. And also next sector vertical is about the education. So you can see that last year in Q1, they had the budget for the placement of the advertisement of actually this was heavily impacted. So apart from these 2 verticals that are heavily impacted for the other verticals, I think that we are positively enjoying a double-digit growth. And also, apart from that, we also had some of the -- a little bit headwinds on the gaming industry as well as the e-commerce. But still, overall speaking, I think the development is pretty much good.

Our next question comes from Miranda Chong from Bank of America.

Can management elaborate on the verticalization strategy for 2022, which verticals will you focus to expand? Specifically, Weibo had gained strong attraction in Olympics campaign. So what kind of strategy will company take for the sports vertical going forward this year? And also, what kind of strategy will company take for the online game vertical? And is there any impact from the Titan online game regulation environment?

So first of all, let me share some color in terms of the vertical of entertainment and also culture. So in this particular vertical of entertainment, it used to be a very important part for our accumulation of the traffic. But since the second half of last year, we've been seeing some kind of a remodeling and also rescheduling of this entertainment industry. So this did bring a negative impact to our business and performance in Q3 and Q4 and last year, specifically on the traffic part. And also in 2022, of course, we've been seeing a very good transformation of this entertainment industry that was previously generated in terms of the idle based economy to pretty much the focus on the product itself and also the production of the works. So you can see that this is the part 1. But still talking about the traffic, this is still in the process of being recovered. And of course, now in terms of the hot trend and also the hot search, we've been seeing that all those listed topics on the hot trends are all pretty much based on the product or based on the works. So in the second half of this year of 2022, we are going to see the traffic volume, which is going to be recovered to the stage before the regulation on the entertainment industry. So second part, as you have mentioned something about the sport industry. And actually, for the vertical of sport, this is also very important, as important as the entertainment as one big part of the mass public consumption. So as you can see, the last year, talking about the Tokyo Olympics, because of very much a big focus, we've been gaining a very good growth in terms of the traffic…

All right. Thank you. So we have reached the end of the question-and-answer session. I'll turn the call back to the management team for closing remarks.

Thanks, operator. This wraps up our conference call this quarter. Thank you for joining us. We'll see you next quarter.

Thank you. That does conclude our conference for today.