Weibo Corporation Q3 FY2025 earnings call

User Front - In September 2025, monthly active users (MAUs) reached 578 million and average daily active users (DAUs) were 257 million. - In 2025, the homepage information feed was upgraded to a recommendation-based model, mostly rolled out to all users by late July. - The recommendation algorithm was optimized, particularly for video content. - During the summer vacation, engagement of mid- and low-frequency user groups improved significantly, with per capita viewership, time spent, and retention growing double digits quarter-over-quarter. - The recommendation feed algorithm was enhanced to match users' real-time interests, linking the recommendation feed and search function for targeted content. - Video content integration in the recommendation feed was strengthened to drive deeper content consumption. - Interest-based content operation and large-scale content production were bolstered. - Social discussion in the relationship feed was strengthened. ### Search Products - AI application in search was reinforced, with technical infrastructure upgraded for better search intent understanding and content matching, and the search model was upgraded to continuous exploratory dialogue. - Intelligent search on Weibo had MAUs exceeding 70 million in Q3, with DAU and search queries increasing by over 50% quarter-over-quarter. ### Monetization - The ad product and sales team focused on expanding the client base and enhancing ad product performance. - Ad revenue was affected by the high base from last year's Olympics, budget reevaluation due to tax policies, and industry dynamics. - E-commerce ad revenues grew, and automobile ad revenues continued to grow. - AI was applied across the entire ad life cycle, with the AI ad creative platform Lingchuang widely adopted, and AI-generated creatives extended to video content.

In the third quarter of 2025, Weibo's total revenues stood at USD 442.3 million, marking a 5% year-over-year decrease. Total ad revenues were USD 375.4 million, a 6% year-over-year decline. Non-GAAP operating income reached USD 132.0 million, corresponding to a 30% non-GAAP operating margin. Advertising and marketing revenue was USD 375.4 million, down 6% year-over-year, while value-added service (VAS) revenues amounted to USD 66.9 million, a 2% year-over-year increase. The top three verticals were FMCG, e-commerce, and 3C products. E-commerce, Internet services, automobile, and local services were key growth drivers, with e-commerce experiencing over 50% year-over-year growth. Ad revenues from the automobile sector continued to grow year-over-year, whereas food and beverage, apparel, online games, and 3C products saw declines.

Q4 Outlook - Overall consumption-related figures were slowing down in the second half of the year, with national subsidy policies facing headwinds. - 2026 was expected to have important events such as the Winter Olympics and World Cup, which would benefit consumer goods advertisers. ### AI in Advertising - AI was applied across the ad life cycle, enhancing ad efficiency. The AI ad creative platform and AI-generated video creatives improved ad production efficiency and diversity. Real-time bidding feed products sustained double-digit growth due to AI-powered upgrades that enhanced conversion and return on investment (ROI) for advertisers.

Uncertainties - The high base effect from last year's Olympics impacted ad revenue. - Headwinds from national subsidy policies limiting spending and phasing out affected the headset and automotive industries. - Tough year-over-year comparisons and ad budget contraction in online games and other sectors posed challenges.

Q: Can management share with us the overall advertising outlook for the fourth quarter and also 2026. So any color that you can provide in terms of the growth rate for fourth quarter? And also how should we be thinking about the overall ad revenue growth into next year? How is AI been helping or will be benefiting the click-through rate or even the advertising monetization and also how AI could be also improving -- help advertisers to improve their ROI.

A: According to the financial report, ad revenue decrease was due to the high base last year and poor performance in some verticals. In Q4, overall consumption-related figures were slowing down in the second half. 2026 was expected to have events like the Winter Olympics and World Cup to benefit consumer goods advertisers. AI was applied across the ad life cycle, enhancing ad efficiency and boosting performance-based ad revenue.

Q: I have two questions on the product commercialization. And first is on the strategy and the progress of intelligent search. Do we have the commercialization attempts already in the fourth quarter? And what other AI application could management share? And second question is on the information feed revamp. What are the initial feedback from users' content consumption, engagement? And how would that translate into revenue growth in the future?

A: Intelligent search had good performance in Q3 with MAU over 70 million in September and query increase by 20% quarter-by-quarter. AI helped in generating ad assets for advertisers. The information feed revamp started in July, took time for users to adapt, benefited user retention and consumption, lowered the threshold for new users, and improved video content exposure, expected to translate into future revenue growth.