Weibo Corporation (WB) Q4 2021 Earnings Report, Transcript and Summary

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 operate in 2020. Our monetization, our revenues reached $2.26 billion up 34% year-over-year, representing a strong rebound from 2020. We further increase Weibo's share of wallet in the advertising market this year. Mainly attributable to a traffic growth and efficient improvement, stronger sales capability in P vertical as well as more competitive add product metrics. Next, let me share with you our progress made in product and monetization in the fourth quarter and lay out our key initiatives for 2022. In the first quarter of 2021 on product operation, we focus on improving Weibo's monetization efficiency by strengthening our competitiveness in core features such as cultural and social attributes, coupled with effective channel investment. We deliver solid user growth and deepen user engagement which in turn improve the monetization efficiency On channel investment, in first quarter, we continue to leverage Weibo's advantage in user acquisition cost and kept focusing on improving user frequency while maintaining the number of users acquired. Our channel strategy has tilt towards channels that could effectively drive user frequency and a scale of targeted users. Consequently, the number of users acquired from Channel collaboration with multiple manufacturers and operators continue to grow. And meanwhile, we further improve our product offerings to better serve users acquired through channel. On the one hand, we optimize the content quality and distribution capability of interest based video feed to improve users experience and frequency to consume content. On the other hand, we enhance our capability to accurately identify potential users interest and characteristics and tailor product strategy to gradually lead user to shift toward community-based products such as super topics, while enhancing users content consumption, aiming to cultivate their mindset of using Weibo and thus improve their willingness to proactively visit us and increase onboard frequency. Turning to social attributes. In Q4, we continue to enhance social functions of our products aiming to sustain the scale and engagement of our core users. Our relationship is based the feed. We further enhanced capability of discovering and distributing high quality social content and effectively promoted user consumption and interaction in the relationship-based feed by product tactics, such as emphasizing social of social posts with high engagement in the top spot of the relationship-based the feed, especially among users with low and medium user frequency. And meanwhile, we continue to optimize content structure of relationship-based fees and enhanced social attributes to increase income exposure from high quality video account and super topics by optimizing the distribution mechanism in the relationship-based feed. As a result, the number of engagement per 1,000 impression delivered good double digit percentage or percentage compare with that of December 2020. On community-based product, it has, it has become an increasingly vital part within Weibo's ecosystem. Upon ensuring compliance of 10 entertainment business operations, we have largely enrich the content verticals of super topics, with emphasis on gaming, sports and campus verticals and upgrading product framework, leading to the consumption of community-based content by a broader use of -- a broader user Group and enrichment of more verticals. At this stage, the post-generated from super topics have reached nearly 20% of our total posts on a daily basis. In December 2021, we saw the number of users who consumed community based content in sports, gaming and campus verticals achieved notable growth year-over-year. This achievement give us confidence that our investment in this product will further enhance user social displays and engagement on Weibo's and create growth opportunity for us in the new area. On video front, we continue to focus on expanding the scale of video accounts and improving their engagement as well as facilitating video content creation and consumption so as to deepen user engagement. As of December 2021, there were over 25 million video accounts. And the number of video accounts uploading videos on a monthly basis increased multiple times on annual basis. On operation and user engagement, we focus on original video content creators who can better drive user engagement and interaction and incentivize them to generate contents to traffic and operational resources support, especially for those in the key content verticals. On product side, we continue to enhance video production functions and motivated top KOLs to create content through providing them with more interactive features. Meanwhile, as the number of video accounts increases, we continue to improve content quality and distribution accuracy of the recommend recommended video feed, further improving recommendation efficiency, user engagement and video ad inventories. On live streaming, we kept improving product features and user experience of join MAC live streaming in multiple scenarios. And further integrated join MAC live streaming with key IPs and events in core verticals such as entertainment, sports, and gaming in order to further cultivate users consumption behavior. In December 2021, the DAUs of Weibo's live streaming more than doubled year-over-year. Let me briefly lay out our strategy for 2022 on a product and operational front. We will strive to further grow away with user base and engagement from the following three aspects. First, on channel investment, in view of Weibo's current user scale and the competitive landscape, we will put more emphasis on keeping the balance between user acquisition cost and the monetization per user and improving ROI of users acquires to channels and thus to keep the total user acquisition costs within a reasonable range in 2022. Second, on Weibo's core competitiveness, we will continue to beef up our operational efforts around how trends and social attributes and to further solidify Weibo's competitive mode in our core features. To elaborate, for one thing, we'll strengthen our strategic cooperation with partners in the media, entertainment, gaming and sports sectors. Advocating media and IP holders to lead public discussion and facilitate the build out of social assets. So as to enrich the supply of discussion materials around trending topics and IPs on our platform. For another -- as another key initiative in 2022, we will upgrade product functionality for super topics through expanding content verticals for interest-based communities, aiming to attract broader user base, especially younger generation to consume content and engage to company products and capturing incremental market share from users time there. For any share some achievements we made during the 2022 Winter Olympic games that just concluded. The game attracted bigger attention and engagement from the general public leveraging strategic operation with Weibo's [indiscernible] center, we invited the old Chinese national teams and athletes to join Weibo and share moments and interact with Weibo's users, making Weibo's social problem and social interactions among Chinese athletes. During the [indiscernible] they are 176 assets related to the auditing initiated and there are 2,500 total channel rate from assets worldwide and nearly 45 million followers accumulated for these assets. And meanwhile, the over strengthened cooperation with partners at the state media and news room are [indiscernible]. As a result, we are pleased to see the overall topic in Winter Olympic on Weibo platform surpassed Tokyo Olympic games with the total number of participants and discussions around [indiscernible] reached over 450 billion and nearly 300 million homes respectively. We are confident that Weibo's unique accommodation has enabled us to further reinforce our competitiveness on the product front. Third, our company ecosystem in 2021, we elevated the monetization capabilities for top content creators with a little bit of [indiscernible] monetization and e-commerce model, leading to nearly 50% growth in the number of top content creators who monetize within Weibo's ecosystem. Looking forward to 2022, we will further optimize the monetization model and enhance monetization efficiency for top content creators to drive higher earnings for them, which would entice more quality content generation and drive this engagement in terms. Finally, on the video front, we will continue to leverage our video account problem to improve the video production experience and enthusiasm for Weibo's core content creators and thus accelerating the visualization trend among content creators. Meanwhile, we focus our operation on content creator such as TV series and variety shows, gaming and sports in the hope of cultivating users' mindset for differentiated video consumption experience so as to deepen user engagement. On monetization front, our air revenues continued to build solid growth in Q4, up 21% year-over-year despite external factors such as macro environment and industry policies. The relative resilience in our advertising business was mainly attributable to 2 things. First, we will benefit from a relatively balanced industry mix with limited risk exposure to those sectors hit hard amid late retract on last year, such as our education and online finance. Secondly, our integrated brand plus performance ad offerings resonated greatly with customers with branding needs and position us well in the marketing competition, which not only enable us to secure our wallet share in key industries, but also tap into other industries and acquire incremental clients and budget. From an industry perspective, despite a softer demand side made challenges from macro environment and industry policies, our traditionally strong industries, such as beauty and personal care, food and beverage, 3C products and automobiles continue to deliver solid growth in the fourth quarter and teams buy our optimization and marketing strategies and service capabilities. Meanwhile, our strategic focus on sectors such as luxury and apparel also paid off contributing decent growth this quarter. We have showcased Weibo's differentiated value proposition to the market featuring the synergies between our product, user product and content operation. For instance, we leverage trending topics of Olympic Games to build heart for ANTA, a domestic apparel brand, and we also seamlessly incorporated luxury brand shows to our live streaming product, such ad offerings improve our clients' ad performance, leading to notably higher ad wallet share in these industries. From ad product perspective, we focus on optimizing and innovating on ad formats to offer clients a diversified product portfolio while further strengthening the synergies between our product and content operation so as to empower clients to accumulate social assets and better reach targeted audience on Weibo. Heading into 2022. On the monetization front, underpinned by uptake in traffic we'll step up our efforts in ad product optimization and sales execution to further enhance our monetization scale, efficiency as well as market competitiveness. First, on air product, leveraging Weibo's differentiation and advantages will strengthen the innovation of content-based ad product, launching more ad products with competitive edge, such as app opening ad and [indiscernible] products and thus driving ad demand. Additionally, we will further optimize our ad placement capabilities for our performance ad offerings, uplifting the conversion efficiency and clients' ad placement experience in order to maximize the monetization efficiency of Weibo's information feed. Second, from an industry perspective, leveraging the resilience of Weibo's integrated brand plus performance ad offerings in key verticals. We are dedicated to sustaining our steady revenue growth in these industries, while extending the marketing combo of integrated brand class performance ad with content operation to more industries and clients aiming to attract incremental clients and ad wallet as well as reinforce Weibo's competitiveness in the end market. For instance, we plan to further upgrade our e-commerce product solution, namely Weibo minishop to enable clients to improve conversion through the closed-group solution on our platform. Finally, on sales execution, we will continue to optimize Weibo's sales structure and improving synergies with the operational team as step to formulate industry-specific monetization strategies, which would more closely support Weibo's marketing system and improve its overall monetization efficiency. With that, let me turn the call over to Fei Cao for financial review.

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 2021, total revenues reached $2.26 billion, an increase of 34%. Operating income was $829.2 million, an increase of 43%, representing operating margin of 37%. Net income attributable to Weibo reached $718.5 million, representing a net margin of 32% and diluted EPS was $3.08 compared to $2.38 in 2020. Let me give you more color on our fourth quarter and full year 2021 revenue growth. Weibo's advertising and marketing revenues for the first quarter 2021 were $550.8 million, an increase of 21%. Mobile revenues reached $516.1 million, representing 94% of our total ad revenues, up from 91% last year. Full year 2025 advertising and marketing revenues reached $1.98 billion, an increase of 33% with mobile ad revenues contributing 93% of total ad revenue, up from 90% in 2020. Let's start with fourth quarter performance. We will close the year on a solid note sustaining double-digit growth. Even though the overall advertising market was taking off amid macro and regulatory headwinds. In terms of revenue contribution, our top 3 verticals were FMCG, e-commerce and 3C products. In terms of growth, luxury was the fastest-growing vertical among major ones. This consumption sectors, including consumer staples and the discretionary demonstrated relatively resilient against a tough market environment, speaking to Weibo's unique value proposition in serving their integrated branding class performance, marketing needs during the e-commerce peak basis from ad product perspective. Global [indiscernible] to be the largest part followed by social display ad and search and topic ad are fees. With happening oversight on several ad offerings such as large-screen ad, our team strived to serve our customers within our ecosystem and mitigate the impact by facilitating them to switch to desirable alternatives, leveraging a full spectrum of social ad products we offer. Moving on to full year 2021 performance. In 2021, we were demonstrating a strong recovery momentum delivering over 30% year-over-year growth in revenues, underpinned the added demand rebound, traffic uptick and ongoing ad optimization. We are also delighted to see stronger sales execution upon the integration between our KA and SME segment, which enable them to [indiscernible] focus on customers, industry-specific by industry. Our largest 3 verticals were FMCG, e-commerce, and 3C products. Weibo has gradually become the product of many advertisers in this consumption sector. By empowering them to leverage KOL influence and connect with generation users and thus fulfilling their integrated branding plus performance needs in 2021. Sectors like FMCG, 3C, gaming and luxury outperformed, whereas education, entertainment and real estate sectors underperformed mainly due to macro and regulatory headwinds. The ad product. promoted fees was the largest followed by social display ad and a [indiscernible] search. Our portfolio on social marketing products delivered a competitive outline and resonated greatly with brands and merchants with Weibo's depreciated ad offerings such as search and topic leading the growth. Overall speaking, in 2021, from a demand perspective, we navigated through our traditional landscape and increased our ad ward share from customers with resilience in the challenging environment from a supply perspective. The growth of ad revenues was primarily driven by traffic and sell-through rate, demonstrating higher monetization efficiency and stronger sales capability. Ad revenues from Alibaba for first quarter decreased 24% to $45.5 million, correlation with its conservative marketing strategies in 2021. Full year ad revenues from Alibaba decreased 8% to $139.6 million broadly consistent with our expectations. The decrease is offset by inventories sold to other e-commerce platforms and brand advertisers with integrated brand plus performance marketing demand. Before turning to VAS segment, let me give some color on the trends entering 2022. Currently, we expect to see softness in the overall advertising market in light of macro and regulatory uncertainties winning on segment -- winning on sentiment. That said, we believe the headwinds could be transient rather than structural with advertising industry base and the secular growth driver reassert themselves. In 2022, our team will be our execution and work relentlessly to fulfill customers depreciating the marketing needs against the tough environment in the hope of further uplifting our monetization scale and add efficiency. Value-added service (VAS) revenue was $65.5 million in the first quarter, an increase of 9%. The increase was primarily attributable to fourth quarter revenue booked from the interactive entertainment company consolidated in November 2020, while partially offset by the decrease of revenue from live streaming business. Full year 2021, VAS revenue was $276.3 million, an increase of 36% mainly resulted from incremental revenue derived from the interactive entertainment company consolidated in November 2020 and other online gaming revenues were partially offset by the decrease of revenues from [indiscernible] business. Turning to costs and expenses, total costs and expenses for the fourth quarter was $396.5 million, an increase of 28%. The increase was primarily due to higher personnel-related costs as well as set up in ad costs, mainly associated with seasonal ad content execution. Full year cost and expenses totaled $1.43 billion compared to $1.11 billion for 2020. Operating income in the fourth quarter was $219.8 million, an increase of 8%, representing operating margin of 36% compared to 40% last year. Operating income for full year 2021 was $829.2 million, representing an operating margin of 37% compared to 34% in 2020 as we continue to balance well between investment for growth and margin performance. Turning to income tax and the GAAP measure, income tax expense for the first quarter was $45.6 million compared to a benefit of $25.3 million last year. The increase of income tax expenses was primarily resulted from tax benefits booked in the first quarter of last year due to preferential tax treatment of our subsidiary as a Key Software Enterprise namely KSE, which lapsed in 2021 and the super deduction true-up for adds for R&D expenses in the fourth quarter of 2020. Full year income tax expenses were $138.8 million compared to $61.3 million in 2020. The increase was mainly resulted from first higher profit in 2021 versus 2020. Second, tax benefits booked in 2020 due to preferential tax treatment of our subsidiary as a KSE which lapsed in 2021. And third, tax liability recognized in 2021 related to uncertain tax positions. Net income attributable to Weibo in the first quarter was $195.5 million compared to $211.7 million last year. Net margin was 32% compared to 31% in the same period last year. Net income for full year 2021 was $718.5 million, representing a net margin of 32%, flat versus 2020. Turning to our balance sheet and cash flow items. As of December 31, 2021, Weibo's cash, cash equivalents and short-term investments totaled $3.1 billion compared to $3.13 billion as of December 31, 2020. The decrease was primarily resulted from investment activities we made and was partially offset by cash provided by operating opportunities and proceeds from our global offering. In the first quarter, cash provided by operating activities was $249.7 million. Capital expenditures totaled $11.3 million and depreciation and amortization expenses amounted to $14.8 million. On full year basis, cash provided by operating activities was $814 million, capital expenditures totaled $35.1 million, and a depreciation and amortization expenses amounted to $55 million. We delivered approximately $778.9 million free cash flow in 2021, an increase of 10% year-over-year, representing our profitability of delivering high profitability and generating strong operating cash flow. Lastly, on December 8, 2021, we successfully listed on the main board of Hong Kong Stock Exchange under the stock code 9898 through a global offering of 11 million Class A ordinary shares. As a newly listed company on Hong Kong Stock Exchange, we need to comply with regulations and followed common practice adopted by public companies in the Hong Kong market. Therefore, we will no longer provide financial guidance on net revenue growth going forward. That said, we remain committed to delivering sustainable growth of our revenue with decent profitability and free cash flow generation and driving shareholder value in the long run. With that, let me now turn the call to the operator for the Q&A session.

[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 and also the number of users of using Weibo. And also, for this year's Winter Olympics in Beijing, we've been seeing that in terms of traffic and also the number of -- this is almost reaching the status of the Tokyo Olympics. And this is, to be honest with you, out of our expectation. And also in 2022, this is a big year for all the sports event. For example, in the second half of the year, we're going to have all Asia games and also at the end of 2022, the World Cup as well. So that we are going to focus on the investment on the content, so that we're going to gain a very good growth in terms of the traffic and also the number of users as well on this one. And also, last year, in the Tokyo Olympics, we've been finding that some of the sponsors and also the sponsors of the assets, et cetera. We've been gaining around 40-plus more customers of placing their ads with us. so that this is not a kind of a very good growth. So previously, we had quite conserved or conservative expectation on the performance during the Winter Olympics period. So we really believe that in the future, in terms of the budget of those advertisers, we're going to have a big room for further improvement. So this is a very important year in terms of the sports verticals. And also third of all, in terms of the vertical of gaming. So now our focus is on the operation of the e-sport and tournaments. So you can see that this has been showing a very good results and performance driven in Q4 of last year during the S-11 [indiscernible] tournament series. And also another focus is on the investment to the e-Sport teams. So this is going to further provide excellent content as well as the services to attract the young users. And also third thing is that this year, we're going to dedicate ourselves continuously to the tournaments and the sport games as well. So of course, all those e-sport events are pretty much based on the mature and also the existing games. So we don't think that whether or not the licenses are granted to the new games and whether or not the new games are pretty much launched in a massive way or less massive way in this year, we'll have a big impact on the traffic volume. But of course, it is going to a little bit impact the budget gaining abilities for us. But because the percentage of the revenue contribution from the gaming sector is actually a little bit small to our total revenue. So we've been seeing a lot big impact in Q1 of this year. But of course, as long as we are going to focus on the attractions of the new users and also paying attention to the activities of the users and time spend with Weibo of those young users, we're going to have a very big room for further improvement.

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.