Weibo Q1 2026 Earnings Call - Ad Revenue Growth Driven by AI and Verticals Despite MAU Decline

IR Representative, Investor Relations, Weibo: Joining me today are our Chief Executive Officer, Gaofei Wang, and our Chief Financial Officer, Fei Cao. The conference call is also being broadcasted on the internet and is 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 may make forward-looking 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 Form 20-F and other filings with the SEC.

All the information provided in this press release is current 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 exclude 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 or are non-recurring in nature, or are not indicative of our core operating results and outlook. Please refer to our press release for more information about our non-GAAP measures. Before loading management prepared remarks, we open the lines for a brief Q&A session. With this, I’d like to turn the call over to our CEO, Gaofei Wang.

Gaofei Wang, Chief Executive Officer, Weibo: 谢谢。大家好，欢迎大家参加微博财报电话会议。

IR Representative, Investor Relations, Weibo: Thank you. Hello, everyone. Welcome to Weibo’s first quarter 2026 earnings conference call.

Gaofei Wang, Chief Executive Officer, Weibo: 我给大家重点介绍微博2026年第一季度的产品运营以及商业化方面的进展。

IR Representative, Investor Relations, Weibo: On today’s call, I’ll share with you highlights on Weibo’s product and monetization in the first quarter of 2026.

Gaofei Wang, Chief Executive Officer, Weibo: 用户方面，截至一季度末，我们月活跃用户达到5.62亿，月付费用户达到2.54亿。一季度，微博MAU同环比均小幅下降，主要由于我们的策略更聚焦于用户体验与留存的增长，渠道预算的投放方向重点转向提升非活跃用户向活跃用户的转化效率。与此同时，得益于首页信息流产品对核心用户群的优化以及平台视频内容消费的持续提升，平台的核心用户，包括互动和点击消费用户的规模和使用频次保持稳健趋势。DAU环比出现小幅增长。一季度，微博总营收达到了10.213亿美金，年历年上涨6%。其中广告营收达到3.68亿美金。一季度，公司调整后营业利润为1.198亿美金，调整后营业利润率为28%。

IR Representative, Investor Relations, Weibo: On the user front, in March 2026, Weibo’s MAU 562 million and average DAUs reached 254 million. Our MAUs experienced a modest decline on both a year-over-year and a quarter-over-quarter basis. This was primarily driven by our strategic focus on enhancing user experience and driving user retention. We have proactively rationalized our channel budget allocation, shifting our focus towards improving the conversion rate of newly acquired users into active users. Concurrently, driven by a recent effort to optimize information feed product experience for our core users, which includes engaged users and click-based users. Coupled with the sustained growth in video content consumption on the platform, the scale and engagement frequency of our core users have maintained a solid trend. As a result, our DAUs achieved modest growth quarter-over-quarter. Our total quarter reached $421.3 million US, an increase of 6% year-over-year.

Our total ad revenues reached $369.8 million, an increase of 9% year-over-year. Our non-GAAP operating income for the quarter reached $119.8 million, representing a non-GAAP operating margin of 28%.

Gaofei Wang, Chief Executive Officer, Weibo: 接下来，我从用户增长及活跃、内容生态竞争力、商业化增长三个维度介绍微博一季度的重点工作进展。

IR Representative, Investor Relations, Weibo: Next, I will highlight Weibo’s key development in the first quarter across user growth and engagement, content ecosystem competitiveness, and monetization.

Gaofei Wang, Chief Executive Officer, Weibo: 在用户增长以及活跃层面，2026年我们将重点提升用户的留存质量，构建高质量、高粘性、可持续的增长体系。一季度，首页信息流仍处于去年升级后的体验优化阶段，相关策略在三月起开始体现增量效果。核心用户的内容消费和互动表现开始改善。同时，视频业务的播放时长持续提升，对用户的时长和留存形成更明显的支撑。

IR Representative, Investor Relations, Weibo: On user growth and engagement. In 2026, we will focus on improving user retention and building a high quality, highly engaged, and sustainable user growth framework. In the first-Information feed 仍处于优化阶段，直到去年产品升级。相关的策略从3月开始带来积极的效果，用户的使用时间和平衡指标开始逐步改善。同时，视频播放页面的观看时间稳步增长，为整体用户使用时间的提升和留存提供了更坚实的基础。

Gaofei Wang, Chief Executive Officer, Weibo: 首页信息流产品，2026年我们继续围绕升级后的长期方向推进优化。在发挥微博社交关系和热点讨论优势的基础上，进一步强化微博特色内容的分发能力，建立更稳定、可预期的内容消费体验，持续提升用户对首页信息流产品的信任感。

IR Representative, Investor Relations, Weibo: Moving on to information feed product. In 2026, the strategy focuses on the product optimization after the information feed upgrade, which aligns with our long-term direction. Building on Weibo strength in social network and hot trend discussion, we will further enhance the distribution capabilities of Weibo’s distinctive native content, establish a more stable and consistent content consumption experience, and continue to strengthen users trust in the information feed.

Gaofei Wang, Chief Executive Officer, Weibo: 具体来看，一季度我们围绕社交内容、热点内容和垂直兴趣内容的分发平衡，集中推进了一系列的策略优化工作。针对微博核心的社交互动型用户，我们在保障其社交关系内容消费的同时，重点提升热点和兴趣内容的推荐效率。同时重点强化真人账号、优质原创以及转发内容的分发，并对低质内容和过度营销的内容加强治理，改善用户在首页信息流的内容消费体验。相关策略在一季度逐步上线。从阶段性效果看，3月开始看到一定的正向表现。使用首页信息流的社交互动型用户的规模、时长和互动量均呈现逐月改善。相关策略正在对该部分用户群体产生更有效的成绩。

IR Representative, Investor Relations, Weibo: Specifically, in the first quarter, we focused on a series of optimization initiatives aimed at balancing the distribution of social content, trending topics, and vertical interest-based content. For Weibo’s engaged core users, while ensuring their consumption of social content, we also prioritize improving recommendation efficiency for trending and interest-based content. Meanwhile, we further strengthen the distribution of content from authentic accounts, high-quality original content, and reposted content, while stepping up governance over low-quality and overly promotional content to enhance the consumption experience within our information feeds. These strategies were gradually rolled out throughout the first quarter and began to make positive impacts in March. Looking at the preliminary results, the scale, time spent, and engagement volume of the socially engaged users within our information feed have all shown month-over-month improvement, demonstrating that our strategy is more effectively retaining and serving this specific user cohort.

Gaofei Wang, Chief Executive Officer, Weibo: 这些效果也增强了我们继续推进首页信息流优化的信心。二季度，我们会在社交互动用户体验优化的基础上，重点针对平台上对推荐流消费占比更高、对内容匹配效率要求更高的用户群体，通过产品策略和内容匹配算法的优化，提升这部分用户在推荐流的连续消费内容体验，增强微博在推荐内容消费场景的竞争力。

IR Representative, Investor Relations, Weibo: These preliminary results have bolstered our confidence to further advance the optimization of information feed product. In the second quarter, building upon the experience improvement for our socially engaged users, we will place greater focus on user groups that rely more heavily on the recommendation feeds and have higher expectation for content matching efficiency. Through the continued optimization of product strategies and content matching algorithms, we aim to improve the seamless content consumption for these users within the recommendation feed, and further strengthen Weibo’s competitiveness in recommendation-driven content consumption scenarios.

Gaofei Wang, Chief Executive Officer, Weibo: 视频业务将成为2026年我们提升用户使用时长和留存的重要驱动力。一季度，我们延续2025年下半年验证有效的路径，视频消费表现持续改善。第一组，多方面从消费市场同比、环比双位数增长，完播也保持提升，其中人均消费市场增长更为明显。

IR Representative, Investor Relations, Weibo: Moving on to video. Our video business is set to serve as a crucial driver for increasing user time spent and retention throughout 2026. In the first quarter, we continue with the proven path established in the second half of 2025, and saw continued improvement of video consumption. During the first quarter, total time spent on the video playback pages achieved double-digit year-over-year growth, while also maintaining an upward trend quarter-over-quarter. Notably, the growth per capita time spent on video playback pages was even more pronounced.

Gaofei Wang, Chief Executive Officer, Weibo: 具体来看，一季度视频业务重点围绕分发和供给两方面推进。分发侧，我们持续优化视频在首页信息流、热点等核心场景中的推荐效果和效率。同时，我们降低低质、重复以及营销化内容的分发权重，推动视频消费市场增长更多来自于高质量内容和有效观看行为的提升。供给侧，我们进一步加强优质视频内容的供给，投入更多资源拓展优质视频博主，并鼓励他们生产例如明星大V的生活vlog、热点解读、热门内容二创等具有微博特色的视频内容，并推动流量更多向这些优质内容集中。一季度，头部创作者的原创视频发布人数和原创视频发量同比均实现双位数增长。同时，短剧、视频播客等多元内容形态的引进，我们也看到了良好的效果。

IR Representative, Investor Relations, Weibo: Specifically, during the first quarter, our video business initiatives centered around two key aspects: distribution and supply. On the distribution side, we continued to optimize the recommendation conversion efficiency for videos across core scenarios such as information feeds and trending feeds. At the same time, we reduced the distribution weight of repetitive, low-quality, and excessively commercialized content. This ensures that the growth in video watch time is increasingly driven by high-quality content and arises in users’ meaningful viewing behaviors. On the supply side, we further strengthened the supply of high-quality video content by investing more resources to attract high-quality video content creators, incentivize their content production. This includes celebrity and top KOL live vlogs, trending topic analysis, and derivative creation of popular content, all of which are distinctive to our platforms and strategically skew our traffic distribution towards these high-quality offerings.

In the first quarter, both the number of top-tier accounts, for example, the golden and orange verified accounts, publishing original videos and the number of original videos posts recorded double-digit year-over-year growth. Meanwhile, we are also exploring and validating the introduction of more diverse video content formats, such as short plays and video podcasts.

Gaofei Wang, Chief Executive Officer, Weibo: 一季度，借助视频AI模型的持续迭代，我们也持续发挥平台在垂直IP方面的优势，向博主开放AI创作工具，支持他们围绕IP进行视频二次创作和内容延展。截至四月，平台已开放20多部头部剧综版权素材，并与合作伙伴积极共同开展AI的二创活动，累计吸引近3,000位博主参与，产出相关AI内容近8,000条。与此同时，我们进一步完善了微博AI创作平台，为创作者提供图文创作、热点创作、视频生成、版权素材、合同活动模板等资源，给博主进行了创作赋能，帮助他们获得更多的创作素材和灵感启发，并以更低的成本将其内容经验表达转化为可发布的视频及图文内容，助力博主在微博平台上的内容生产效率提升。

IR Representative, Investor Relations, Weibo: In the first quarter, leveraging the continued iteration of our video AI large models, we further built on the platform’s strength in vertical IP by opening up AI creation tools to the creators, enabling them to produce derivative video content and extend IP-related content. As of April, we had made copyright materials available from over 20 top-tier TV drama and variety show IPs on the platform, and have actively collaborated with partners to launch AI-driven content recreation initiatives, which have attracted nearly 3,000 creators and generated nearly 8,000 pieces of AI content. Meanwhile, we further enhanced Weibo’s AI creation platform by providing creators with resources such as graphic text generation tools, trending topic creation tools, video generation capabilities, copyright material, and campaign templates.

This empowers creators with richer materials and inspiration, allowing them to translate their content expertise and creative ideas into publishable videos and text-based posts at a significantly lower cost. This, in turn, has helped improve content production efficiency for creators on Weibo.

Gaofei Wang, Chief Executive Officer, Weibo: 内容生态竞争力方面，2026年我们将继续围绕热点、社交、搜索三大核心业务，重点提升内容生态的健康度与核心竞争力。一季度，我们在内容生态上的提升热点消费质量、社区互动深度和AI搜索能力，增强用户在平台上的内容消费效率和参与体验。

IR Representative, Investor Relations, Weibo: Moving on to content ecosystem competitiveness. Throughout 2026, we will continue to focus on our 3 core businesses: trending topics, social network, and search, while further enhancing the health and core competitiveness of our content ecosystem. In the first quarter, our focus within the content ecosystem was on enhancing the quality of trending topic consumption, deepening community interactions, and advancing our AI search capabilities. Through these efforts, we aim to significantly improve users’ content consumption efficiency and their overall engagement experience on the platform.

Gaofei Wang, Chief Executive Officer, Weibo: 热点方面，一季度我们重点推进热搜榜单的影响力和可信度建设。我们优化榜单的排序机制，提升榜单内容质量，并改善low级内容供给和讨论氛围，带动热搜产品下内容消费和讨论活跃度的提升。相较去年四季度，一季度用户在热搜产品下的人均消费时长和人均讨论量均有所提升。用户在热搜产品下消费粘性的增强，也进一步巩固了微博作为热点发现以及公共舆论场的竞争力。

IR Representative, Investor Relations, Weibo: With respect to hot trends, in the first quarter, we focused on strengthening the influence and credibility of our trending list. We optimize the ranking mechanism, improve the quality of content presented on the list, and enrich the content supply and discussion atmosphere on the landing pages. These efforts drove higher content consumption and more vibrant discussion under the hot trend scenarios. Compared with the fourth quarter last year, both average time spent and average discussion volume per user under the hot trend scenarios increased in the first quarter. The strengthened thickness of user engagement around hot trends further reinforce Weibo’s competitive position as a go-to platform for hot trend discovery and public discussion.

Gaofei Wang, Chief Executive Officer, Weibo: 社交方面，我们今年的目标是通过更丰富的社区玩法和更强的互动机制，提升用户在兴趣圈层内的参与深度和复访意愿。一季度，产品设计继续围绕明星、IP、赛事等场景，推进产品能力的建设和活动机制的标准化运营，对用户活跃形成了持续带动。产品整体日活用规模、活跃用户同比保持增长。随着AI能力在产品研发、提效和内容理解上的应用提升，我们会继续围绕服务用户的核心需求，加速社会互动型产品和功能的迭代，进一步提升用户在微博的社交满足度和社区归属感。

IR Representative, Investor Relations, Weibo: On social attributes, in 2026, we aim to deepen user engagement and increase revisit intention within interest-based communities, leveraging richer community engagement features and stronger interaction mechanisms. In the first quarter, the Super Topics community continued to enhance its product capabilities and standardize event-based operations across categories such as celebrities, IPs, and sports events, which sustainably drove user engagement. As a result, both DAUs and engaged users of Super Topics recorded year-over-year growth. With AI further integrated into product development efficiency and content understanding, we will continue to center on core needs of users of community products, accelerating its iteration of interactive community products and features, and thereby further improving users’ social fulfillment and sense of belonging on Weibo.

Gaofei Wang, Chief Executive Officer, Weibo: 搜索方面，随着AI能力持续提升，一季度微博搜索从单一问答总结升级为支持连续追问，并能够理解视频等多种内容的智能搜索体验。同时，我们结合AI Agent能力，围绕人物搜索、热点搜索，在搜索第一页和评论区等微博核心场景开展产品验证，提升用户搜索体验和效率，强化微博商业化搜索的价值。

IR Representative, Investor Relations, Weibo: On search products, as we continue to enhance our AI capabilities, in the first quarter, we have upgraded our Weibo intelligent search function from a single term Q&A summary one into an AI-powered multi-term follow-up queries, and can understand multi-modal content including videos and image with text. Meanwhile, we integrated AI Agent capabilities into key scenarios such as public figure search and hot trend search, and have conducted product experiments on search landing pages and comment sections. Leveraging AI Agent capabilities will enhance the user search experience and efficiency, and further reinforce the Weibo’s differentiated value proposition in the search market.

Gaofei Wang, Chief Executive Officer, Weibo: 在商业化增长层面，我们延续推进25年以来广告产品和销售团队坚持的两化战略，持续推动微博所有的内容营销价值向更多的行业和客户渗透，并同步结合AI能力，系统性提升广告的效果转化能力。一季度，微博广告收入同比增长9%。整体来看，微博在新品发布、春节营销、赛事及明星营销等具体场景中，继续发力热点加社交加内容营销的商业化优势，带动多个重点行业实现增长。

IR Representative, Investor Relations, Weibo: Moving on to monetization, we have continued to execute on two key strategies that have underpinned our ad products and sales teams since 2025. First, driving broader adoption of Weibo’s unique content marketing value across more industries and clients. Second, systematically improving ad conversion effectiveness by leveraging AI capabilities. In the first quarter, Weibo’s ad revenues increased 9% year-over-year. Overall, Weibo continued to leverage its differentiated strength in hot trends plus social plus content marketing across proven marketing scenarios such as new product launches, Chinese New Year campaigns, sports events, and celebrity marketing, leading to growth across multiple key industries.

Gaofei Wang, Chief Executive Officer, Weibo: 从行业来看，一季度增长贡献主要来自于互联网服务、本地生活以及汽车等垂直行业。互联网软件应用一季度同比增长显著，主要得益于平台获取互联网服务行业增量的改善。例如春节期间各AI大模型应用加大了推广力度，微博依赖在科技数码等领域的KOL生态和专业讨论氛围，有效承接了AI厂商的新品发布、技术科普和用户的口碑建立需求，带动相关营销收入明显增长。我们认为，随着AI技术和应用的持续迭代，AI相关内容将成为微博内容生态的重要增量。5月，微博平台AI专有博主规模、自媒体热点数量及AI相关内容讨论量当月已经提升超过30%。AI技术革新正在持续激发平台的内容创作和用户讨论，也将进一步有助于内容生态成长和商业化增长之间形成正向循环。

IR Representative, Investor Relations, Weibo: By industry, the main growth contributors in the first quarter were verticals such as internet service, local service and automobiles. The internet service sector delivered robust year-over-year growth, primarily driven by incremental budget we captured from the internet service companies. For example, during the Chinese New Year period, various AI large language model players ramp up their marketing investment. Leveraging Weibo strong KOL ecosystem and professional discussion environment in the digital and technology verticals, we effectively fulfilled AI companies marketing need in areas such as new product launches, technology education, and word of mouth building, which resulted in a notable increase in related marketing revenues. We believe that as AI technologies and application continue to evolve, AI related content will become a major incremental driver of Weibo’s content ecosystem.

In May, the number of AI focused professional content creators, the average daily number of AI related hot trends, and the discussion volume of AI content on Weibo all increased more than 30% compared with January this year. This technological transformation in AI have been continuously stimulating content creation and user discussion on our platform, and will further build a flywheel between content ecosystem enrichment and monetization growth.

Gaofei Wang, Chief Executive Officer, Weibo: 生活服务行业受外卖竞争的延续以及假日旺季的影响，也成为季度增长较快的行业之一。汽车行业在政策的支持和新车发布的带动，客户围绕新品上市、用户口碑和品牌声量建设保持较稳定的投放，一季度也实现了同比双位数增长。手机行业一季度同比虽然实现小幅增长，但从行业环境看，市场竞争仍在加剧。尽管国补依旧换新政策持续支持，但芯片和内容成本上升，存货成本上涨仍对我们的客户利润形成了巨大压力。客户预算后续预计面临一定的压力。我们会根据新品的节奏和客户的预算变化，优化售卖策略，保持对重点客户的覆盖。其他垂直行业方面，鞋服行业一季度同比双位数增长，主要是重要赛事、运动户外品牌协同发力，以及明星官宣的带动。相关客户借助赛事和代言人事件提升品牌关注度。

IR Representative, Investor Relations, Weibo: The local service sector was also among the fast growing sector in the first quarter, supported by ongoing competition in food delivery, as well as seasonal boost from the Chinese New Year holiday. The automobile sector delivered double-digit year-over-year growth, primarily driven by favorable policies and new vehicle launches, relatively stable ad spend around new product launches, user reputation building, and brand awareness. The handset sector recorded modest year-over-year growth in the first quarter. Looking ahead, market competition in the sector continue to intensify. Despite ongoing support from trading subsidies, rising chip and memory cost continue to put pressure on handset manufacturers profitability, which may weigh on their ad budget going forward. We will closely track new product launch cycles and client budget dynamics, and optimize our sales strategy accordingly to ensure solid coverage of key clients.

Among other verticals, the apparel and footwear sector achieved double-digit year-over-year growth in the first quarter, primarily fueled by the Winter Olympics, concentrated marketing campaigns by sports and outdoor brands, and celebrity endorsement activities. Through which advertiser effectively leveraged events and celebrity moments to boost the brand awareness.

Gaofei Wang, Chief Executive Officer, Weibo: 上季度我们提到部分品牌客户在明星IP领域营销方面有所回暖。一季度这一趋势在若干重点行业项目中有体现，相关收入保持同比增长，并对微博平台内容营销业务形成补充。明星营销一直是微博内容营销能力中的特色组成部分。过去一个季度，我们更多从提升客户服务深度和投放效率出发，围绕客户的品牌目标、预算水平和目标受众，结合微博在热点IP、明星和KOL生态中的资源，提供更有针对性的资源匹配、内容策划和传播承接服务，帮助客户实现品牌曝光和用户互动。目前相关产品和服务能力仍在持续优化，部分项目已经看到较好的执行效果和客户反馈。后续我们会继续推进明星与IP领域营销服务，将其作为提升我们品牌客户的内容合作深度和内容营销竞争力的重要组成部分，并与平台的整体广告产品体系形成协同。

IR Representative, Investor Relations, Weibo: As mentioned last quarter, we have seen a recovery trend in demand for celebrities and IP-based content marketing from certain brand advertisers. In the first quarter, this trend continued to play out in a number of key industries and campaigns, with related revenues maintaining solid year-over-year growth and providing a meaningful supplement to our overall content marketing business. Celebrity marketing has always been a distinctive component of Weibo’s content marketing capabilities. Over the past quarter, we focused more on enhancing service depth and ad placement efficiency for clients in this area. Based on clients’ brand objectives, budget levels, and target audience, we integrated Weibo resources in hot trends, IPs, celebrities, and KOL ecosystems to provide more tailored resource matching, content planning, and campaign execution services. This initiative enables clients to effectively achieve brand exposure and user engagement, while our products and service capabilities are still being further refined.

We have already seen encouraging execution results and client feedback in some of the pilot projects. Looking forward, we will continue to advance our celebrity and IP content marketing services, positioning them as a key component to deepen collaboration with brand advertisers and enhance our content marketing competitiveness, while driving greater synergy with our overall ad product portfolio. With that, let me turn the call over to Fei Cao for financial review.

Fei Cao, Chief Financial Officer, Weibo: Thank you, Gaofei, and hello, everyone. Welcome to Weibo’s first quarter 2026 earnings conference call. Let’s start with user metrics. In March 2026, Weibo’s MAUs and average DAUs reached 562 million and 254 million respectively. During the first quarter, we continued to focus on user quality, retention, and engagement. MAUs saw a modest sequential decline, mainly reflecting our ongoing rationalization of channel investment and the transition following our information feed revamp. At the same time, DAUs remained resilient and improved slightly quarter-over-quarter, supported by better retention of core users, continued optimization of the homepage feed experience, and improving video consumption. AI continued to serve as an important enabler across our product, content, and monetization systems. On the monetization side, AI-powered targeting, feeding, and ad creative generation continued to support Promoted Feeds and real-time bidding ad products.

Internally, we are also expanding the use of AI tools to improve execution efficiency across product, operations, and sales teams. Turning to financials. As a reminder, my prepared remarks will focus on non-GAAP results. Monetary amounts are in US dollar term, and all comparisons are on a year-to-year basis, unless otherwise noted. Now, let me walk you through our financial highlights for the first quarter 2026. Weibo’s first quarter 2026 net revenues were $421.3 million, an increase of 6%, or 1% on a constant currency basis. Operating income was $119.8 million, representing operating margin of 28%. Net income attributable to Weibo reached $91.9 million, and the diluted EPS was $0.34. Let me give you more color on the first quarter 2026 revenue performance.

We started the year with our advertising business returning to year-over-year growth, supported by improving demand from selected verticals and continued execution in content marketing and performance-based ad products. Weibo’s advertising and marketing revenues for the first quarter 2026 were $369.8 million, an increase of 9%, or 3% on a constant currency basis. By industry, our largest three verticals were FMCG, e-commerce, and 3C products in terms of growth. Internet services, automobile, and local services were the major contributors. Advertising revenues from internet companies increased primarily due to incremental advertising spend from leading players in the sector. The automobile sector also saw substantial growth, supported by auto-related content ecosystems and ad spend from electric vehicles. For the handset sector, advertising revenues recorded modest growth, but we remain mindful that their marketing budgets may face pressure amid intensified competition with the handset market, as well as rising component costs.

As for areas facing headwinds, FMCG continued to face a year-over-year gap, although we saw sequential recovery as certain advertisers resumed spending in celebrity and KOL marketing campaigns. The online game sector was still on a descending trend due to lack of blockbuster releases this quarter. By ad product, Promoted Feeds ad was the largest, followed by Social Display, Search, and Topic. Promoted Feeds delivered solid growth, benefiting from better ad matching in the revamped information feed, continued demand for Weibo’s differentiated IP and content marketing solutions, and deeper AI integration in targeting, feeding, and creative generation. These product improvements helped advertisers combine brand exposure with more measurable conversion objectives. Ad revenues from Alibaba for the first quarter were $43.3 million, an increase of 2% year-over-year or a decrease of 4% on a constant currency basis.

The modest decline of revenues from Alibaba was primarily due to high base last year, which included one-off revenues from promotional ad budget for Alibaba’s sponsorship of Spring Festival in 2025 and AI-related budget in the first quarter last year. Ad spend from Alibaba highly correlates to its own marketing strategies, which may fluctuate with Alibaba’s campaign priorities and product launch schedule, et cetera. Value added service revenues were $51.6 million in the first quarter, a decrease of 11% or 15% on a constant currency basis. The decrease was primarily attributable to decline in game-related revenue. Turning to costs and expenses. Total costs and expenses for the first quarter was $301.5 million, an increase of 13%, mainly due to higher ad production cost and marketing spends, partially offset by the decrease of general and administration expense.

During the quarter, we continued to make major investments in selected monetization related initiatives, primarily around advertising product capabilities, content marketing ecosystem, and client service offerings. We will continue to manage the pace of these investments with ROI discipline and within a controllable budget framework. Operating income in the first quarter was $119.8 million, representing operating margin of 28% compared to 33% in the same period last year. While operating margin declined year-over-year due to less investments, we remain focused on balancing near-term execution needs with sustainable profitability and healthy cash flow generation. Turning to income tax. Under GAAP, income tax expenses for the first quarter were $15.7 million compared to $24.3 million last year, mainly due to decrease in deferred tax liability related to equity pickup adjustment.

Net income attributable to Weibo in the first quarter was $91.9 million, representing a net margin of 22%. Turning to our balance sheet and cash flow items. As of March 31st, 2026, Weibo’s cash equivalents, and short-term investments totaled $2.59 billion compared to $2.41 billion as of December 31st, 2025. In the first quarter, cash provided by operating activities was $164 million. Capital expenditures totaled $11.9 million, and the depreciation and amortization expenses amounted to $15.5 million. Let me share some color on our shareholder returns. We have completed the distribution of the annual cash dividend of $0.31 for ordinary share or ADSs for the fiscal year 2025, with aggregate amount of approximately $150 million in May 2026.

We will continue to take a disciplined approach to capital allocation, balancing shareholder returns with the financial flexibility needed to fund our long-term product, AI, and the content ecosystem initiative. Overall, first quarter was a quarter of continued transition and steady execution. While macro consumption sentiment and industry competition remain uncertain, with the initial signs of stabilization in core user engagement and advertising demand. We will continue to balance investment needs with operating efficiency and healthy cash flow generation as we build a more sustainable foundation for long-term development. Before turning to the Q&A session, let me provide you a brief update on ESG front. In April, we published our fifth ESG report highlighting our efforts across social value, tech empowerment, information security, employee development, content ecosystem, and green operations.

MSCI also recently upgraded our ESG rating from BB to AA, recognizing our progress in sustainability, innovation, and social responsibility. Please visit our IR website for more information. With that, let me now turn the call over to the operator for the Q&A session.

Operator: Thank you so much. Dear participants, as a reminder, if you wish to ask a question, please press star one one on your telephone keypad and wait for your name to be announced. To withdraw your question, please press star one and one again. Please stand by, we’ll compile the Q&A roster. This will take a few moments. Once again, if you would like to ask a question, please press star one one. Now we’re going to take our first question. It comes now from Thomas Chong from Jefferies. Your line is open. Please ask your question.

Thomas Chong, Analyst, Jefferies: [Foreign language] Hi, good evening. Thanks management for taking my questions. Based on the trend so far we see in Q1 and recent months, can management comment about Weibo advertising outlook in Q2? In addition, can management also comment about our advertising strategies, any updates for the full year?

Separate today on AI, can management share about how it benefits advertising and monetization? Thank you.

Gaofei Wang, Chief Executive Officer, Weibo: 我先说一下Q1跟下半年的整体的预期的情况。从Q1的情况看，广告收入同比增长9%，人民币口径是增长大概3%左右，略微超过我们之前的预期。那依旧增长主要还是来自于互联网软件和应用，特别是一些AI的投放，以及本地生活和汽车等等垂直行业的一个增长。

Gaofei Wang, Chief Executive Officer, Weibo: Thank you for the question. First off, let’s talk about the overall recap of Q1 performance as well as the expectation of the second half of the year. First of all, we had a year-on-year growth of about 9% of the advertising revenue in Q1. If we’re talking about the definition of RMB, it was about 3% of the growth. In Q1, primarily the advertising revenue growth was driven by the Internet-based software deployment and AI-related investments as well as the other local lifestyle and automotive industry related.

Gaofei Wang, Chief Executive Officer, Weibo: 虽然从Q1的整体消费行业来看，虽然我们广告保持了一个同比比预期稍微好一些的增长，但是我们看我们重点的行业客户其实还是压力比较大的。例如说汽车行业，今年我们大部分客户可能销量都是同比下降两位数以上的。那么手机行业的客户，其实客户的营收也出现了一定程度的下降趋势，还是因为存储的一个成本的上升，很多客户的产品都进行了调价。那电商行业是我们原来比较大的行业，但是客户其实由于竞争，它的利润还是受到了一定的压力。这是我们其实主要的一些行业客户，虽然说我们的收入在增长，但是客户本身的经营压力还是会比较大的。

Gaofei Wang, Chief Executive Officer, Weibo: Okay. Next, I would like to say that in Q1, overall speaking, we had a better than expectation growth of our ad revenue in terms of the consumption area. If you are talking about the key accounts that we have, especially from different verticals, we’ve been seeing a stressful situation. For instance, in terms of automotive sales, they’ve been experiencing double digit decrease. For the handset, they had also a decrease in terms of their overall revenue because of the additional cost of the memory and most of the handset makers have to adjust their overall price. Also for e-commerce, we’ve been experiencing also the stressful profitability situation. Even if our ad revenue was growing, we have still a stressful operation for our customers. Okay.

Gaofei Wang, Chief Executive Officer, Weibo: 那从二季度和后面的预期来看，我觉得虽然面临这种外部消费的压力，但是我们不同行业的客户其实表现还是不一样的。汽车行业虽然大家销量都在下降，但是我们的客户并没有减少新品的推出。其实今年汽车行业的新品的推出速度反而比去年还会更多一些。所以我们会看今年的一季度、二季度，可能未来的季度我们还是会保持一个比较快的增速。因为得益于现在电动车的新品的推出在加速，而微博上面相关的这种科技，包括新能源的讨论氛围和生态是比较完善的。所以说这部分我们的增长应该还是可以看得到的。

Gaofei Wang, Chief Executive Officer, Weibo: Okay. Next, in terms of Q2 and also the future outlook, I think that although we’ve been seeing a stressful operational situation for consumption industry, we did have the different responses from different customers. First of all, in terms of automotive industry, in the current stage, they’ve been experiencing some of the decrease of their sales volume. However, they were not just stopping in terms of the promotion activities for the new products and new product launch as well. This year we’ve been seeing more new product launches than that of last year. In Q1 and Q2, as of the near future, I think that this is going to be accelerated. As you can see that we always have more and more frequent launches of new EVs. Also Weibo is a very good and natural ecosystem to generate and stimulate the discussions around the topics of technology related and new energy related. Okay.

Gaofei Wang, Chief Executive Officer, Weibo: 手机行业一方面来讲，我们现在还不好说这个下半年的趋势。确实，上半年我们的客户它的销量都出现了一定程度的下跌。但是我们也会看到，今年部分客户其实推出新品，尤其是中高端产品节奏在上半年加快，但是下半年正常的暑期，他们有些产品的节奏有可能会有一定的调整。其实今年苹果在中国，它的价格体系也做出了一定的调整，它对于现在的国产厂商还是有一定压力的。所以我们需要去看一下客户在下半年的产品推出的节奏。比如说我们的预算，其实更多地和客户推出新品的节奏和新品的数量相关，其实跟本身的客户的经营业绩并没有特别直接的联系。

Gaofei Wang, Chief Executive Officer, Weibo: At the same time, for the handset industry, as you can see that it is difficult for us to have a very correct prediction of the performance in the second half of the year. The industry did experience a drop of their sales volume in the first half of this year. Of course, this year, however, still we are seeing more launches of new products and new smartphones, and especially increase in the frequency of smartphone launches for the medium to high-end segment. In summer holiday, we might have been experiencing some of the adjustments of the strategy from the handset industry. Of course, this year we’ve been seeing Apple practically adjusted their price, causing some of the stressful situations to some of the Chinese handset makers.

As a result, our ad revenue and ad budget was primarily related to the frequency of the new product launches of the different verticals as well as the sales, but not necessarily related to the operational result of the customers in different verticals. Okay.

Gaofei Wang, Chief Executive Officer, Weibo: 那电商和本地生活，包括快消来说，电商在二季度开始就已经是高基数了，因为去年有外卖大战。今年来讲的话，虽然外卖行业也有一定竞争，但是肯定不会像去年的投放这么激烈。我们觉得后面二三季度其实还是有一个高基数下面的同比的压力的。然后快消因为三季度进入到六月份拥有World Cup，所以说我们也来看哪些客户会增加一定程度的投放，从我们的角度上还是会去尽量争取这方面的预算。

Gaofei Wang, Chief Executive Officer, Weibo: Of course. Also lastly, let’s talk about some of the other industries like the e-commerce and local lifestyle as well as the FMCG industry. First of all, for the e-commerce, we’ve already had a very high base number in entering to Q2. Of course, also for the industry, some of the promotion activities and especially budget allocated to the fast food delivery was not as intense as before. This is going to be not that stressful. Also, I would like to comment on FMCG. Entering to the second half of the year, we are going to have the World Cup as activities. I believe that we are trying our best to catch the opportunity to gain that ad revenue or ad budget from that customer. Okay.

Gaofei Wang, Chief Executive Officer, Weibo: 另外一个问题就是关于AI方面的一些策略。其实我刚才script里面也提到了，就是AI其实现在在对于效果广告方面，一个是素材生成，然后竞价，包括算法推荐这方面，其实利用场景会越来越多。那目前AI生成素材在我们竞价广告里面的消耗已经差不多将近40%左右，那整个一季度的信息流的效果广告vCPM也提升了，同环比都有一个提升，同比可能增幅在两位数左右。

Gaofei Wang, Chief Executive Officer, Weibo: Also, you can see that talking about the AI topic, as we have already previously stated, that the AI was primarily very effective on the effective based or the performance based ads. You can see that AI was quite useful in terms of the ad material generation, the eCPM, and also the recommendations as well. In terms of those generated materials for the advertisements, the primary consumption rate was already reaching to about 40%. In Q1, in the information based feed, we had a double-digit growth, especially talking about the eCPM and the other relevant areas. Okay.

Gaofei Wang, Chief Executive Officer, Weibo: 另外大家都知道，我们的主要的核心收入是在品牌广告方面，就是AI在品牌包括明星啊，内容营销方面，我们也在进行测试。实事求是来看的话，从春节之后的这种实际的产品的进展而言，还是比较快的。那它不管是在明星代言方面，还是在一些KOL，包括一些新的产品的代言方面，其实AI生成广告素材和品牌这种TVC方面已经展现出来了不错的能力。但是我们在第一季度、二季度都会看到，公众对于AI在这种基于明星、基于热点内容生成内容方面，还是有一定的情绪的接受度的障碍的。那所以说我们目前在当前阶段并没有把类似的产品进行商业化，而是在小范围的包括跟客户，包括跟明星在测试。我觉得这个其实正式进行商业化还需要一定程度的时间和公众接受度，我们才会对外推出。

Gaofei Wang, Chief Executive Officer, Weibo: Of course, you know that Weibo is very good at doing the business in the advertisement industry for the brand-based advertisement and key-customer advertisement. We are very good at doing the business of the celebrity-based or the content-based marketing. At the current stage, we’ve been having a very good progress in terms of adoption of the AI among those KOLs and also the celebrities as well. AI is pretty much useful in generating those ad materials for those KOLs to be very much facilitative. Of course, in Q1 and Q2, we’ve been seeing some of the headwinds in terms of the adoption rate as well as the acceptance by the public in terms of those ad-generated by AI or those content-generated by AI.

At the current stage, we are not doing a massive commercialization as for the front, but still we are going to wait. Still, we are doing some internal testing among KOLs, and the public acceptance is the criteria for us to evaluate before we go massive commercialization. Okay.

Gaofei Wang, Chief Executive Officer, Weibo: 谢谢。

Gaofei Wang, Chief Executive Officer, Weibo: Thank you.

Gaofei Wang, Chief Executive Officer, Weibo: 谢谢。

Operator: Thank you. We’re going to take our next question. Give us a moment. The question comes in of Jenny Yuan from UBS. Your line is open. Please ask your question.

Jenny Yuan, Analyst, UBS: 谢谢。管理层晚上好。那能请管理层分享一下信息流改版之后对于整个用户增长以及用户活跃这边的一个带动情况。另外，上个季度公司也是提到我们视频的策略会作为今年的重要的发展战略方向，那么目前我们看到视频策略这块的推进情况怎么样？那么也能跟各位讲一下，就是进入下一个阶段，我们的重点的目标是什么？另外一个问题，关于AI的用户产品层面，我们公司近期有哪些重要的进展？谢谢。So thanks management for taking my question.

Could you please share some updates on the impact of the stated events on user growth? Last quarter we highlighted video strategy as a key focus for this year. Could you please provide an update on the progress so far as well as the key priorities and targets for the next phase? Lastly, could you please also share recent developments on the AI front in terms of user-facing products? Thank you.

Gaofei Wang, Chief Executive Officer, Weibo: 那信息流改版方面，我们是2025年，差不多去年的三季度中完成的整体用户的一个覆盖，就是我们现在整个产品体系以推荐流为主。那对上线的这几个季度，我们一直在升级和优化我们的用户体验，去更好地承接用户的内容消费的需求。那一季度的话，我们从整体数据看，我们的MAU跟DAU同比有个小幅下降，这个主要还是一方面是渠道投放策略有一些调整的原因。一方面这里面有手机出货量的下降，所以说预装用户一定程度的下降。还有一个，一季度在渠道获客方面，因为AI应用我们其实一季度是主要投放的旺季，其实某种程度上我们也用户的获客成本也有一定的上升。所以说，我们的核心用户群体，我们讲社交用户和我们的click-based users，其实同比都还是保持着一个增长，而且到二季度之后，用户的规模、消费者和互动量，尤其是消费者互动量都有一个双位数的提升。

Gaofei Wang, Chief Executive Officer, Weibo: Got it. OK, thank you for this question. First of all, as for the update of the information-based feed, we’ve been seeing that this was actually completed in the middle of Q3 of 2025, and before which we had primarily based on the recommendation-based feed. When we actually had that update and adjustments, we’ve been seeing a very good improvement of the user experience in the front. In Q1, we had a little bit decrease of MAU and DAU of this side, primarily due to the strategy changes of our channel placement, and also some of the low shipments of the handsets. We had a lower number of pre-installments, and also the users as well. In Q1, you can see that we’ve been seeing a user acquisition cost increase, because it was actually the hot season in terms of the AI application adoption and also the usage.

At the same time still, we are keeping very good number in terms of the social based users and also the click-based users. In after Q2, we are going to see a very good improvement both in terms of the total time spent as well as the interactive volume.

Gaofei Wang, Chief Executive Officer, Weibo: 长期看，其实我们之前也解释过，我们这次大的产品的一个改版，一方面其实还是包括去突破我们原来的关系流的这样一个持续了十多年的一个产品体验。虽然说在市场里面，包括在用户层面还是有个小的挑战，但是核心有两个方面目标，一方面还是能够释放微博优质内容的价值，通过算法的能力来提升我们用户的消费体验和消费深度。另外一方面更核心的，我们还是希望通过这样一个机制，在视频方面可以说突破我们原来的社交关系的一个限制，可以帮助我们吸引更多的视频博主来入驻微博，然后提升他们的内容生产和分发，加强我们平台上视频生态的建立，从而提升我们整个平台对视频消费的占比和总市场。

Gaofei Wang, Chief Executive Officer, Weibo: Got it. In the long run, our overall objective of doing the update and changes of this existing product is that we would like to, first of all, get rid of those user experience that was primarily based on the relationship-based feed. Of course, at the current stage, there are still some of the challenges from the user side in terms of the acceptance and getting used to this new version. Still, in the long run, we have two objectives by doing this kind of change. First is that we hope that we are going to fully release the value of Weibo to those consumers, and at the same time, using our algorithm to better enhance the user experience and also the depth of the user interaction on the social media.

Second point is that we hope that our total video consumption in terms of the time spent and also the total video-based consumption could be further improved because of this kind of strategy. We would like to attract more bloggers to be on the Weibo, to open account, and generate more video content. This would be helping them to do more deployment and the placements as well as the generation and production of the video-related content. This would be really helpful for us to increase the time spent on video-related content on Weibo. Okay.

Gaofei Wang, Chief Executive Officer, Weibo: 那从视频的这种结果来看呢，一方面从用户数角度看，目前的视频消费的用户数已经同环比有明显提升，而且在DAU中的占比也首次超过了同步用户，那逐步强化了用户来微博消费视频的新致。而且从市场角度来讲的话，从消费市场也实现了一个同比双位数的一个增长。我觉得更关键的是在视频的供给侧，尤其是我们打破了推荐流之后，我们可以更多的引入更多资源和预算来拓展站外的优质视频博主来到微博，而且用推荐流可以给他们更多流量，并鼓励他们生产。那一季度我们加快了站外视频博主的引入，而且通过流量扶持激励的运营措施，结合这个推荐算法，可以提升他们在微博整体的视频的分发效率和视频的供给。

Gaofei Wang, Chief Executive Officer, Weibo: In terms of the overall results of this video strategy for the video front. First of all, of course, we’ve been seeing actually a very good growth of the number of users consuming the video-related content on Weibo. You can see that this was pretty much forming a new mindset of the consumers on the video-related content. We had a very good double-digit growth year-on-year in terms of the time spent on the video-related content on Weibo. On the supply side of the video content, because of this recommendation-based feed, we hope that we are able to attract more creators and bloggers from outside of Weibo by providing them with more resources and also more budget.

Based on this new algorithm and new incentives plan and encouragement plans, we hope that we are able to attract more and more those external bloggers and also content creators to be landing on Weibo and helping us to enrich the supply of video content. Okay.

Gaofei Wang, Chief Executive Officer, Weibo: 在AI方面来讲的话，去年其实我们一直在产品技术研发方面，然后也是鼓励大家使用这个AI去开发新的产品。去年其实搜索在年度推出之后，然后2025年用户规模和搜索量其实有高速增长。但在今年一季度其实还是遇到了一些挑战，因为特别是AI这些独立工具，在今年一季度有一个爆发的成长之后，我们会看到我们的用户的一些消费行为在发生一些变化，从搜索向对话式的搜索有一个明显的迁移。那这种对话式的搜索在微博用户里面，我们在去年四季度推出之后，到今年一季度也有环比有个100%的增长，但它的用户规模其实现在也只是在百万的层级。这个今年其实也是我们AI产品重点要去突破的一个方向。

Gaofei Wang, Chief Executive Officer, Weibo: In terms of the AI, we had a lot of R&D and investment and tried to encourage people to actually use AI to facilitate what they do. When we launched the Zhisou in 2025, we had actually a very good boost in terms of the total volume of search. Still in Q1, we had some of the challenges because at the current stage, we’ve been seeing a lot of AI tools that were emerging and on the consumption side, or on consumer side, more and more consumers are now trying to use the interactive and dialogue-based search instead of just a pure search function. In Q4, we made that interactive dialogue-based search available and experiencing a 100% of the growth in terms of users and adoption in Q1.

Still at the current stage, the base number of the user for this particular feature is only at a level of million. We hope that in the future we are able to further boost that and further strengthen our AI-related strategy on this front. Okay.

Gaofei Wang, Chief Executive Officer, Weibo: 同时来讲的话呢，在一季度我们面向头部创作者也推出了AI创作中心，覆盖图文、视频等场景，帮助大V结合热点和平台的特色的版权素材，生成这种图片啊，包括视频。而且我们跟C Dance包括Qwen合作，也推出了这种现在基本上都是15秒，我们推出了一分钟左右的视频，这个效果还是不错。但是目前我们还是只向微博的新微内容全面开放，还没有向所有用户去开放这样一个功能，因为它的成本在目前阶段还是比较高的，单位成本。

Gaofei Wang, Chief Executive Officer, Weibo: In Q1, especially targeting those content creators, we are now establishing an AI content creating center, facilitating those content creators to generate the text and images as well as video content as well. At the current stage, you can see that we had a lot of important key account or the key content creators that had a very good video generated in that center and those texts and images as well. We’ve been seeing a very good collaboration with ByteDance and Qwen to actually have the capability to help the content creators to generate a video with a length of one minute long, which primarily it’s about several seconds or 10 or so seconds, but we are able to help to generate the videos of one minute long.

This, of course, is the feature that is not accessible by all the users. By the current stage we’re only providing this to some of the new certified users. In the future we hope that we are able to have a rollout. Before that, we are going to have further consolidation internally. Okay.

Gaofei Wang, Chief Executive Officer, Weibo: Okay. Thank you.

Operator: Thank you. Dear participants, due to time constraints of today’s call, we will not be addressing any further questions. Thank you very much for taking participation. You may now all disconnect. Have a nice day.