Sina Earnings: Weibo Advertising Continues To Drive Top Line Growth

August 9th, 2016 by Trefis Team
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Sina (NASDAQ:SINA) announced its second quarter earnings on August 8, reporting a 14% annual increase in net revenues to $242 million. [1] Revenue growth was driven by its advertising segment, which includes display ads on sina.com and weibo.com. The contribution of advertising revenue to Sina’s top line has increased from 79% in 2013 to 84% of net revenue in 2015.  The figure stood at just under 85% of net revenues in the second quarter.

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Within the advertising segment, portal advertising includes revenue generated from online brand advertising on Sina.com and Sina mobile properties, while Weibo advertising revenue is comprised of revenue generated by advertising and marketing on the microblogging and social media platform. Ad revenues from Weibo were up 44% to $126 million for the quarter, primarily due to a surge in revenue contribution from small and medium enterprise (SME) customers. Revenues generated from SME accounts has been the fastest-growing revenue stream over the past few quarters. However, strong revenue growth in Weibo advertising was partially offset by an 11% decline in portal advertising revenue to $79 million.

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Continuing the trend from the March quarter, Sina reported an improvement in gross margins for both its advertising and non-advertising revenue streams compared to the prior year quarter. Additionally, improved operating efficiency and largely fixed operational costs led the company’s cash operating expenses to stay flat over the year-ago period at $134 million. As a result, Sina’s non-GAAP operating income was significantly higher than the year-ago levels at $35 million. Consequently, the company’s non-GAAP net income was up by almost 400% to $20 million for the quarter.

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Sina’s management expects its business to grow at around 5% for the full year, from RMB 5.7 billion in 2015 to around RMB 6 billion in 2016.

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See our complete analysis for Sina.

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Notes:
  1. SINA Reports Second Quarter 2016 Financial Results, Sina Press Release, August 2016 [↩]