Weibo Corporation Price & Performance (WB)

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 occurring as the day zero Weibo assumes no obligation to update such information. Except as required under applicable law. Additionally, I'd 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 the future prospects Our non GAAP financials exclude certain expenses gains or losses, and other items that are not expected to result in future cash payment, [indiscernible] were 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, Weibo open the line for a brief Q and A session. With this, I would like to turn the call over to our CEO, Gao Fei Wang. Thank you. Hello, everyone. Welcome to Weibo's fourth quarter and full year twenty twenty four earnings conference call. [indiscernible] On today's call, I will share with you highlights on Weibo's product and monetization, review the progress made in 2024, and elaborate our strategy for 2025.

Starting from our financial performance in the fourth quarter, our total revenue in the first quarter reached US456.8 million dollars a decrease of 1% year over year. Or relatively flat year over year on a constant currency basis. Our total ad revenue reached US385.9 million dollars a decrease of 4% year over year. Our value added service revenues reached US71 million dollars an increase of 18% year over year. Our non GAAP operating income in the fourth quarter reached RMB136.2 million, representing a non GAAP operating margin of 30%. For full year 2024, our total revenues reached US1.75 billion dollars relatively flat year over year or an increase of 1% year over year a constant currency basis. Our total ad revenue reached RMB1.5 billion a decrease of 2% year over year. The decrease was mainly resulted from the variance of active performance across different industries. Our value added service revenue reached US256 million dollars an increase of 13% year over year benefiting from the upgrade and restructuring of our membership service. For full year 2024, our non GAAP operating income reached US584.1 million dollars representing a non GAAP operating margin of 33%. In December, Weibo's MAU reached RMB $590,000,000 and average DAUs reached the $260,000,000 Net, let me share with you our progress made in product and monetization in the fourth quarter.

On social attributes, we have two undertakings on the product. On one hand, we maintain our 2024 strategy for the relationship based feed, by enhancing high quality content consumption, accelerating the construction of virtual content ecosystem promoting social interaction features, and increasing the social stickiness in the relationship based feed. In the fourth quarter, both the number of interactive users in the relationship feed and interaction rate per thousand views saw a solid year over year growth. On the other hand, to further enhance user's social stickiness on Weibo, we initiated social product integration plan in Q4, synergies among super topics individual page. [indiscernible] To align goals across both social products product operation, we have clarified that Label Social features should focus on the relationship network and social interactions between content creators and fans. Specifically, in the first quarter, we focused on on product integration of a super topic with relationship based feeds and the My Profile in enabling high quality content from Super Topic to naturally and efficiently reach users of interest. In the relationship feed. This approach not only boosted common consumption and user interaction in the relationship based feeds but also encourage the user to engage more organically with Super Topic, fulfilling their long tail interest based social needs.

And reinforcing user recognition. Of Weibo as a community. We expect to complete this integration plan in the first half of twenty twenty five. On content ecosystem, in the first quarter, we focused on two areas: First, with these opportunities in hao trend, to acquire users and drive traffic. While continuing to invest in vertical content to reinforce the development of monetization ecosystem. Throughout 2024. We saw significant growth in the scale traffic and engagement of the vertical building and already verified accounts. Compared to prior year. For instance, we kept up with the latest call trends in advancement of AI technology and prioritize development of content for system of AI related verticals On the one hand, we captured and operated hotshan of the AI industry on Weibo. Generating discussion around AI related hot topics on Weibo. On the other side, we built a metric of KOLs in the AI related vertical. Encouraging them to generate in-depth technology analysis and industry insights content. Besides, we also launched a series of activities to boost AI related content creation and interaction to attract users' participation and to make AI more accessible to them. Looking ahead, our ongoing investment in AI vertical will not only the growth of the AI industry, but will also generate more business opportunities in the interest based user group agencies for this platform, creating a mutually reinforcing relationship between the AI company ecosystem and the monetization ecosystem.

In the fourth quarter, started transforming the platform's vertical operating system. Our vertical company ecosystem has been built around the content generation by top creators of all verticals, and the distribution system of the relationship based feed. However, with the shift towards interest based content consumption, our existing vertical operating and management model has been facing challenges. To address this, we recognize the need to form an integrated model to combine Hail Lattempt operation with interest based accounting operation. Therefore, we launched the Weibo cross vertical initiative in the fourth quarter aiming to guide content generation around users' interest. The initiative encouraged top vertical KOLs to generate content with diversified interest. Adjust the platform's content incentive policy, to foster wider participation and enhance the distribution efficiency of hot topic and recommendation feed. These efforts have provided preliminary validation for our new operation model of interest based vertical concept. And will guide our investment in the development of the interest based recommendation mechanism in 2025. Next on the monetization front, in the fourth quarter, we continue to focus on strengthening clients' perception of Weibo as a primary platform for the new product launch marketing. Despite that Weibo's overall ad revenue in the fourth quarter, decreased slightly year over year, ad revenue from the new product launch marketing grew by double digit year over year.

As we see opportunity of major industries in the new product launch marketing increasing our investment to Zu's content discussion and distribution, through our new product launch lifecycle. Let's take a closer look by industry. Revenues from both automobile and handset sectors delivered solid growth in Q4, largely driven by Weibo's unique strength in new price launch marketing and facilitating discussions on emerging technologies. For example, with the growing market penetration of new energy vehicles, namely [indiscernible] in China throughout 2024, we will reinforce this position as the main platform for NEV related discussion. As a result, car manufacturers have significantly increased their marketing budget on Weibo, contributing to another year of revenue growth in the automobile sector for Weibo, extending its multiple year upward trend. On the flip side, in the fourth quarter, ad revenue from online game cosmetics and personal care luxury industries were in the descending trend in the fourth quarter. The online game ad revenue saw year over year decrease clients mainly due to the high base effect from Tianjin and Nase's major project investment in the Q4 of twenty twenty three. For the cosmetics and personal care care and luxury sectors, although the ad revenue from this sector declined in Q4.

The impact of this sector on the overall ad revenue growth is very limited with the adjustment of this revenue scale. For the overall ad marketing in Q4, the government introduced a series of stimulus policies to boost consumption. For instance, the trading policy had a notable positive positive impact on the digital product and our e commerce sectors. However, it takes time to see when the broader set of economic stimulus measures will translate into the recovery of advertisers and consumer market With this policy gradually taking effect, we hope to see the macro economy consumer spending and more industries demonstrate a more meaningful result. Against these backdrop, Weibo's monetization strategy will continue to focus on leveraging marketing opportunities from the platform wide platform wide and client driven health trends. While penetrating into a wider range of industries and clients. And meanwhile, in serving clients' marketing campaigns when the new product launch were key marketing window, we have strived to deliver better performance in terms of the distribution effect and client feedback Recapping on 2024, although revenues from a field industry feel short of expectation, which negatively impact on the overall revenue growth. Our effective cost management enable us to sustain a stable operating income The solid profitability give us financial flexibility to support our investment in product technology and AI area in 2025.

Reaching the cornerstones of the company's long term development. Overall speaking, in 2024 against the backdrop of macroeconomic and industry uncertainties, we focused on beefing up Weibo's competitive edge of our company ecosystem and enhancing operating efficiency as our key goals. Underpinned by the effective cost management, enforced the company ecosystem and the content marketing strategies we delivered stable profitability for 2024. Looking ahead to 2025, continue to focus on user solidify our leading position in hot trends and the entertainment company ecosystem and reinforce the competitiveness of our social products On top of this, Weibo also beef up our AI investments to enhance our recommendation system and further invest in vertical and video content ecosystem This initiative will solidify the platform's long term competitiveness as well as drive users community growth and engagement. Next, let me briefly share some color on our key strategies for 2025. On three key fronts. User growth, company ecosystem and operating efficiency. On the user front, in 2025, our key focus in the user product area is integrating Weibo's social products and revamping the recommendation system so as to drive user growth and engagement. To elaborate, first, we will consolidate key social products such as [indiscernible] My Profile and SANS Group to improve user interaction and strengthen the social stickiness between content creators and their fans.

Additionally, leveraging the synergy between membership and social products we aim to empower content creators to extend monetization opportunities based on their social network and thus foster greater engagement for both content creators and their followers on the platform. Second, we will upgrade our information fee product by optimizing the home page interface. Coupled with the strength of the large language model powered interface based [indiscernible] We hope to nurture users' habit of consuming recommended content on the home page, thereby raising the proportion of recommended content among traffic distribution. By doing so, we endeavor to offer fresh user experience while reinforcing the long term development of the vertical content ecosystem. Third, we are dedicated to further solidifying our advantage in hot trends. Thanks to the introduction of the open source model, we revamped our Trends product with focus on enhancing the credibility and influence of the hot search chart. We will also refresh the trending content feed and thus further unlock the synergies between the hot search and such feed. Leveraging a more efficient hot trend distribution system we could improve the retention for those users [indiscernible] This effort would greatly benefit the sustainable development of Weibo's haochan ecosystem in the long run.

On the content ecosystem, in 2025, as for the user product and operation, we will focus on reinforcing Weibo's leading position in the whole trend. And entertainment sector while continuing to invest in the vertical and video companies ecosystem. These initiatives will further enhance Weibo's content capability to compete for users' engagement and time spent among the platforms. To elaborate, first, Yupifa, Weibo Hot Trend operation to lift in investment in the content generation of both media outlets and self media accounts. So as to cater to users' demand for comprehensive and in-depth fraud trends consumption and discussion. As for the entertainment vertical, we will further drive the engagement of celebrities on Weibo and reinforce the celebrity fan ecosystem to boost social interaction. Additionally, we are continuing to innovate on the collaboration models with drama and variety show promotion platforms. As well as premium series leveraging Weibo strength in amplifying word-of-mouth [indiscernible] expanding audience reach. These efforts will drive greater content consumption and discussion for the entertainment vertical. For example, during the twenty twenty five Spring Festival, we are pleased to see 50% year over year increase in the number of discussions related to holiday box office, thanks to our operation efforts in movie club discussion and audience reviews.

Notably, for the blockbuster movie Nozhan II, we target at hot topics and audience reviews. Leveraging the exclusive initiative such as the relay of the celebrity image featuring cop films in Chinese cinematics history and a coordinated efforts with around 3,000 media outlets. The topic related to not just the second generated over RMB90 billion and 100,000,000 discussion on Weibo. We are excited to see this campaign ignite public enthusiasm for domestic animated films contributing to NoData's second success in surpassing 10,000,000,000 in box office revenue. Second, we Weibo continue to strengthen the build out of industry specific verticals [indiscernible] Such as digital, automotive and online teams. Etcetera. To elaborate, we strive to increase the number and influence [indiscernible] and enhance the monetization capabilities of Golden and Orange Verify accounts. This approach will enable us to further integrate with industry based content ecosystem and monetization ecosystem. Creating a virtuous self reinforcing cycle of user and monetization This year, we will work to build out an AI related content vertical and thus support the AI transformation with focus on strengthening discussion around AI trends and expanding content creators' interest interested user base in the AI field. Third, to better align home page information feed, improve recommendation accuracy.

We will further optimize our approach to increase the vertical content [indiscernible] Establishing a closed loop system from content creation to distribution instead of primarily managing the engagement of content creators, our focus will shift toward managing their vertical content This initiative will help drive user base and engagement of the recommendation based fees from the phone case and facilitate the long term development of virtual content ecosystem. Moving on to operating efficiency. [indiscernible] we seek to create and solidify clients' mindset of Weibo as the go to platform for content marketing across a broader range of industries and clients. While also improving our ad conversion efficiency First, in ad sales, we will further leverage Weibo's core strength in content marketing and optimize inventory industry specific marketing solution tailored to different sectors to achieve win win results in the content and business ecosystem. With top clients. Additionally, we Weibo reorganize our content marketing service and revamp our sales structure to expand the reach of content marketing across industries and clients. Second, in terms of ad products, we'll increase the distribution ratio of native ad [indiscernible] namely content marketing and enhance the overall marketing experience [indiscernible] Which will enable us to capture incremental ad volume share from content marketing.

At the same time, we will continue to leverage AI technology in the monetization field to optimize marketing and execution efficiency. Third, we hope to deepen the engagement of VIP members and drive a stable growth in the value added service. Creating greater value for our members we focus on integrating our various membership benefits and creation of entertainment and gaming IPs. Finally, this year, we are happy to see the product opportunities brought by the open source large language model. Over the past two years, we have focused on building our basic platform capabilities through integrating all kinds of AI models which enable us to swiftly switch among AI models to innovate our product In 2024, we proactively explored on the product front and gradually outline our roadmap which focus on several key areas. Namely AI powered search, social interactions, content recommendation and advertising, etcetera. In early twenty twenty five, we are excited to see breakthroughs in the areas of large language models, particularly the application of the latest open source model [indiscernible] which has significantly boosted the search capabilities. The new version of Weibo intelligent search function powered by the latest open source model will be rolled out to all users this quarter.

Based on the current user group tactic, the updated version will improve users' searches. Experience on Weibo and drive usage frequency of Weibo search function. This will transform the positioning of Weibo search. From haochuan and real time search to general search, which will facilitate us to enter into the vertical search market This potential transformation will also set a high standard for our product experience. Additionally, we are also actively exploring AI application in social and advertising products. These applications will position us well to reinforce our competitive strength expand our usage on narrows grow our user community and as well as facilitate user interaction. We firmly believe that AI technology will transform our product capabilities and further strengthen Weibo's unique value proposition in the social media sector. And thus build momentum into our long term growth. With that, let me turn the call over to Fei Cao for a financial review. Thank you, Laufei and Heather, everyone. Welcome to the Lunar fourth quarter and fiscal year call. Let's start with user metrics. [indiscernible] In 2024, we have proactively adjusted our user strategy to focus on the acquisition and engagement of high quality users leading to an uptick of our DAU versus MAU ratio throughout the year.

On the content front, we further optimize our content ecosystem through reinforcement of our content and solid execution of our vertical content strategy. Turning to financials. As a reminder, my prepared remarks will focus on our net results All monetary amounts, like in U. S. Dollar terms, and all comparisons are on a year over year basis unlike otherwise noted. Now, let me walk you through our financial highlights for the fourth quarter and fiscal year twenty twenty four. Weibo's fourth quarter twenty twenty four net revenues were RMB456.8 million, a decrease of 1% flattish. On a constant currency basis. Operating income was RMB136.2 million, representing an operating margin of 30%. Net income attributable to Weibo reached 106,600,000.0 and diluted EBITDA was 47 For full year 2024, total revenues reached RMB1.75 billion, flattish. Or an increase of 1% on a constant currency basis. Operating income [indiscernible] 84,100,000.0 representing an operating margin of 33%. Net income attributable to Weibo reached RMB478.6 million was $1.08 $2 Let's make a view more color. On both quarter and full year 2024 revenue performance. [indiscernible] Weibo's advertising and marketing revenues for both quarter twenty twenty four RMB385.9 million, a decrease of 4% or 3% on a constant currency basis.

Mobile ad revenue was RMB365.5 million, contributing approximately 94% of total ad revenue. [indiscernible] were 71,000,000 in the fourth quarter, an increase of 18%. Full year 2021 advertising and marketing revenues reached RMB1.5 million. A decrease of 2%. Or 1% on a constant currency basis. With mobile ad revenues contributing 94% of total ad revenue. [indiscernible] Full year content growth, net revenue increased 13% or 15% on a constant currency basis to RMB256 million First, regarding Q4 ad performance, [indiscernible] Consistent with our expectations, the advertising business continues to stabilize. Low performance varied across our key ad verticals. Our largest luxury verticals were 3C products, e commerce, and FMCG. In terms of growth. 3C products, automobile and internet services were the key drivers of advertising revenue growth on the asset. We are encouraged to see early signs of a rebound in brick feet product sales as trading subsidies took effect. The automotive sector continued to deliver solid growth benefiting from the ongoing shift from traditional to electronic vehicles. As well as our robust accounting system supporting new car launches. On Flipkart. Our top line recovery was just down by underperformance of the online gaming sector. [indiscernible] Due to the concentrated release of blockbuster party games in the fourth quarter last year.

Additionally, although content data shows signs of bottoming out partly supported by trading policies, certain discretionary categories such as cosmetics, luxury goods, and personal care products. [indiscernible] Moving on to full year 2020 ad performance. Despite macro and competitive headwinds, We maintained strong advertiser engagement and continued to attract meaningful ad spend from key sectors. While revitalizing the company's legal system to enhance our monetization capabilities. By industry. Our largest of great verticals were FMCG, [indiscernible] safety products and automobile were largest contributors to growth. We are delighted to see the same growth in ad spending from concept and automobile sector this year [indiscernible] product launch. The Internet service sector also achieved encouraging growth and customers from this sector degrade our platform to create high quality users amid intensified competitive landscape. However, the SMC category continued on a downward trend. Within the SMC the cosmetics and the personal care sector remain under pressure. Mainly due to presales from multinational brands heightened competition among ad platforms. In contrast, The food and beverage industry experienced a solid growth [indiscernible] by the Paris Olympics as well as our strong sales abilities [indiscernible] In 2024, we further strengthened our market differentiation and long held chains, IPs and celebrities which resulted in decent growth constant marketing.

Ad revenues from Alibaba for the fourth quarter were 14,300,000.0. A decrease of 10% or 9%. On customer reflecting a relatively muted e commerce shopping platform [indiscernible] Full year ad revenues from Alibaba were RMB116.8 million an increase of 10% or 6% from customer productivity. Consistently with Alibaba's moderate pickup in marketing volume. [indiscernible] [indiscernible] up 18% year over year due primarily by growth in our membership and the payment related services. For the full year 2024. RAP revenues increased by 13% or 15% on a constant currency basis to RMB256 million. This growth was largely fueled by strong performance of our IDX Tea membership [indiscernible] Which effectively meet our user social needs and by our successful efforts to attract high quality users with greater purchasing power. Purchase costs and expenses total cost expenses for the fourth quarter was RMB3757 million an increase of 1%. [indiscernible] totaled 1,000,000, largely laggish with increase in sales and marketing expenses offset by decrease in general and administrative expenses. Operating income in the fourth quarter was RMB 136,200,000.0, representing an operating margin of 30%. Compared to 31% in the same period last year. Operating income for full year 2024 was RMB54.1 million representing an operating margin of 33% compared to 34% in 2023. [indiscernible] under GAAP income tax expenses for the fourth quarter were RMB10.

Compared to RMB72.6 million last year. This reduction is primarily due to the ban off with all new tech of Hu in the fourth quarter of last year. Compared with the normalized recognition in 2024. Full year income tax were RMB510.6 million compared to RMB175.5 million 2023. The decrease mainly reflected a record [indiscernible] Net income attributable to Weibo in the million, representing a net margin. Of 23% compared to 16% last year. Primarily due to the aforementioned impact from income tax. '24 were RMB478.6 million, representing a nice margin 27%. Compared to 26% in 2023. Turning to our balance sheet and capital items as of December 31, 2024. We will cash, cash equivalents and short term investments totaled $2,300,000,000 in the fourth quarter, cash provided by operating activities was RMB244 billion, Capital expenditures totaled RMB17.7 million. And depreciation and amortization expenses amounted to 14,400,000.0. On a full year basis. Cash provided by operating activities, was RMB639.9 million compared to RMB672.8 million in 2023. [indiscernible] [indiscernible] [indiscernible] In light of the robust balance sheet and healthy cash flow [indiscernible] We are pleased to announce that our Board of Directors has adopted an annual tax dividend policy. [indiscernible] The Board has approved an annual tax dividend issued to that quarterly share for ADI for the fiscal year 2022. [indiscernible] total US200 million dollars with payments expected to be made in May 2025.

Over the past two years, they have successfully discharged two lines of special tax dividends each totaling approximately US200 million dollars Looking ahead, our cost per item is to [indiscernible] the transformative AI opportunities [indiscernible] financial health. [indiscernible] priorities and ensure long term financial stability, enable us deliver sustainable predictable dividends to our shareholders With that, let me now turn the call over to the operator Thank you. We will now start with our first question. Please stand by. Please go ahead. Your line is now open. Thanks management for taking my my question about AI. As your prepared remarks, mentioned, you have a lot of progress on AI and we both [indiscernible] experience is quite good. So can management elaborate on So first of all, in the past two years, we've been doing some of things to further consolidate our efforts in terms of AI. First of all, we have been doing the integration of multiple AI large models. For instance, we have been using the capability of API and also the others to emphasize the production, especially the basic products of ourselves. So that we are able to have a very good switch in between different models for the different needs to test our businesses.

And also second point is that during the past two years, we've been making some of the products based on the capability of large language models. For instance, the intelligent search social products, and also the content as well as the commentating and also the commercial ads. For instance. We've been doing a lot around those areas. And also in 2025, we've been seeing a lot of progress that we made in terms of the development and also the research on basic models. For instance, in 2024, we've been having a lot of discussions on Weibo about AI related to technical issues. But now Weibo been seeing a lot of more publics are joining the discussion about AI [indiscernible] also in terms of the deep seek, we've been seeing a total number volume of discussion around 10,000,000 also the number of reading volumes exceeding 20,000,000,000 already. So this has really helped us to see a very good polarization of the topic of the seek and also the other AI related topics. Of course, this is pretty much challenging in terms of the management of content, but still this is quick enough to speed of integration between product and AI capabilities.

On AI related technologies and also topics So for instance, in terms of the full volume realization, we've been seeing that this quarter, we're going to realize the full volume of the search capability among all the businesses that are on the testing. And also second of all, I would like to say that while we are having a further integration of those new models and also the further driving down of the overall cost This is going to enhance the speed and also accelerate the integration with more capabilities and also AI models. Okay. And also in terms of the intelligent search, we've been seeing that in the last year, especially in the middle of twenty twenty four, we've been having the large language models of the 100 based on the Tianwen model with a parameter of seven seven seventy two billion. In 2025, after the Chinese New Year, we've been switching to the deep sea large language models and this has further enhanced the capabilities of this particular intelligent search, for instance, the product capability and also with more fine details and all kinds of different angles in [indiscernible] Answering those questions. That you can see that in terms of the total number of MAUs using the intelligence service, this has been increasing by 40%.

And given us a very good result. And you can see that among all the results that have been showing to the public, 25% of those results are based on these intelligence search results and integrating the capability with DeepSeq. And also, with the further enhancement of the computational power I believe that starting from this year, this quarter, we're going to see the service opening up to the full users, not only those users on the testing scope. And also this is definitely in house the efficiencies of all kinds by double digits. Okay. So also you can see that it's more important for us to see that because of this capability of large language models that we're using now, because of its capability to summarize and also help to conclude all the content that we been creating and presenting on Weibo platform for the past decade. This is really enhancing the capability of search. So for instance, of course, there are still rooms for improvements and optimization in terms of the capability of intelligence search based on AI. Still, we can see that those contents and also opinions that we have generated on the platform of Weibo during the past more than ten years which has been presenting and also organizing our platforms we can help to summarize and also conclude all these contents.

So that is going to add more values to those long tail searches in [indiscernible] And also with further optimizations and also further integration of multiple and diverse models and emergence of new models, we are going to see better content creating and also better presenting of those content and also summary of the past year's content which is going to add a lot of more values to the users. And also lastly, I was to say that apart from the capability of search, we have been also applying the AI capabilities on the other fronts, for instance, monetization, the interactions, and also better recommendations of more content. In terms of monetization, we've been seeing a little several percentage points of increase in 2024. And I think that this momentum is going to be continuing in 2025 and especially around the area of performance based ads. Of course, that the total ad revenue of those perform based ad is not that a contributor to the overall ad revenue So this is not impacting the overall ad revenue as a whole in 2025 and also in the future. But still, we are still actively thinking about the values that we could add to the brand based ads, especially based on the better and more individualized materials and all the other fronts.

Which are still under testing. So we're going to see how much value Weibo can have for the brand base at So overall speaking, in conclusion that in the next several quarters, with the further optimizations and also the applications, we hope that we are able to announce to the public Johnson investors more progress that we have been making in this front. Thank you.

Thank you. We will now take our next question. Please stand by. And the next question comes from the line of Felix Liu from UBS. Please go ahead. Your line is now open. Let me translate myself Thank you, management for taking my question and congratulations on the resilient bottom line despite the slight revenue decline in 2024. My question is on the 2025 outlook for advertisement.

Considering the economic policy stimulus since September, How does this management see the macro and consumption trade trend in 2025? What's management's expectation on your ad performance by industry vertical? In 2025? And last but not least, what are your strategies to improve the competitiveness of your advertisement business? In 2025?

Thank you. Thanks for this question. So after Q4, we've seen a lot of implementations of the policies by the national government and especially around the area of national subsidies for instance. So this is impacting immediately on the verticals like automotives and headsets and also e commerce. But still for those other industries that are not enjoying this regular national subsidy policies, we're not seeing a very good progress made. So in terms of the national subsidy policy, this has been impacting immediately, possibly on the three gs products and e commerce industries. We've been seeing a very good growth of the revenue from these areas in Q4. However, in the other areas, they are not enjoying this kind of policy, for instance, instance, the beauty and personal care products and luxuries, and also the other discretionary industries will be I think a lot of the precious also stress of growth. So of course that in in near future still Weibo have to remain precautious on these areas especially without those favorable national policies. Especially around the budget allocated by the customers in 2025? Okay. Okay. And also second of all, from the other verticals, for instance, in e commerce, especially among those top platforms like Alibaba and JD.com, definitely speaking, there could be a very affirmative and also affirmative growth in this year in 2025.

And in the other two verticals, headsets and also automotives, we're seeing a very good integration into the content ecosystem of Weibo And of course, it's very highly competitive for the automotive industry. And also, still, we're going to see a lot of subsidies implemented by the OEMs So this is going to be very much a beneficial industry. And of course, because of the capability of differentiated competitive strength of Weibo and also very good anti stress capability of Weibo as a platform, we're going to see a very good growth in this area. Of course, we've been seeing a trend of decrease for the ICE vehicle, still this is going to be offset by the growth of the new energy vehicle sector. Okay. And also, just now we've been sharing some of the colors on our investments on the AI capabilities for the performance based ads. And this has been seen this has been given us very good results. By improving the ECPN and also the other parameters. So we've been seeing a very good growth of the other customers, for instance, instance, that are focusing on the app downloading, for instance. So this was good. And in 2025, the only industry I believe that is not certain that is uncertain, for instance, is the gaming industry.

So you know that since 2023, every year at the end of each year, we're going to see a very good publishing also announcements of new large games every 01/2024. And throughout the whole year of 2024, we did not see a lot of announcements and also launch of the large mobile games and big mobile games. Although Weibo can see another some of the announcements and launches of the medium scale games, but still there are lack of big blockbuster games launched in the throughout the whole year of 2024. So commenting on the pipelines of our customers, in 2025, we are not that optimistic in seeing a lot of large and blockbuster games launched throughout the year. So gaming industry is the most on social industry in this front in 2025. [indiscernible] And also in 2025, throughout the whole year, we have to be really precautious on this front. And of course, that because different industries I have already stated, add all kinds of different performance and also different level of the pressure. Or optimistic growth. So what we have to do is that in 2025, we have to pay close attention to the implementation of the government policies throughout the first half of twenty twenty five and further to see whether that is going to be further impacting macro economy and also the overall consumption of China.

Of course, that was ideal in the area of demand side, So we have to be really doing something to actively change our supply strategy, supply price strategies and also the overall strategy of our company. For instance, as I have already stated, we have emphasized more on the investments on AI capabilities and the integration of AI capabilities can further help us to improve the efficiency of monetization. Also, we have to see the trend of our customers when they're launching new products and also emphasizing more budgets on the marketing when they're doing so. So that we are able to do more and better in the ad business and also further enhance our competitive edges of Weibo in this area. And also last but not least, I have to say that the strategies of our content operation is exactly the same as the strategies of the operation of our monetization. So as I have already stated, after COVID-nineteen, what we have to do is that emphasize more on the traffic growth of the vertical related traffics Because we know that during the COVID period, most of our traffics are related to news. So that has taken a larger proportion of the overall traffic allocated there during COVID.

So after the COVID we have to eradicate traffic and also emphasize on different strategies. So after COVID, as of now, we've been recovering to almost 50% of the original level. Before COVID in terms of the traffic of the other vertical related content. But still there are rooms for further improvements. So there because that you can see that for those vertical related content, in terms of the capabilities of monetization and also the capability of the user stickiness, it is way much better than the other traffics. For instance, the 90,000,000,000 traffic for Neojah II and $20,000,000,000 traffic for the deep seek top related topics. These traffics have better capabilities of monetization. So while we are grasping these opportunities, this is going to help us further consolidate our strength and also set up a better foundation the communities of monetization in the future. This is what we have to do in 2025, in specifics. Thank you.

Thank you. Will now go to our next question. Please stand by. And the next question comes from the line of Daisy Chen from Haitong International. Please go ahead. Your line is now open. Thank you management for taking my question. Weibo has announced $200,000,000 dividend It's very difficult for that the company still mentioned the same size and frequency even under such difficult environment for the online ads business next year. We really respect that. Can management share more color on shareholder return policy such as [indiscernible] and the method. Maybe do you want to share Thank you, Lisa. If you see, I don't see your question. Weibo is focused on a balanced capital allocation [indiscernible] let us uphold long term growth while delivering value to our shareholders.

As we mentioned over the past three years, our net debt operating margin has remained stable.

And our operating cash flow reached US600 million dollars giving us the flexibility to invest in AI in product innovation and shareholder returns. [indiscernible] And our capital allocation follows some key principles and mainly two key principles.

First, driving business growth and savings competitive AI is playing in product experience. As Gobi mentioned in his remarks, we were able to search and we are actively expanding its [indiscernible] in social and ad products. We remain committed to invest in AI as well in turning a disciplined financial approach to ensure our long term stability and [indiscernible] that remains competitive within the industry.

And second, enhancing shareholder returns As you have seen from our announcement, our Board approved annual dividend policy providing more predictable returns based on our financial performance and capital needs. This reflects our commitment to delivering the sustainable shareholder value while maintaining the flexibility to invest in long term growth opportunities. And we are open to other method such as buyback So going forward, we will continue to expand our capital allocation strategy leverage AI to strengthen our product abilities and create long term value for our shareholders. Hope this answers your questions. Thank you. Thank you. We will now conclude the Q and A session. And I would like to hand back to Sanjay for any closing remarks.

Thank you, operator, and thank you all for joining our conference call today. This wraps up our call. We'll see you next time. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect. [indiscernible]