Document and Entity Information
Document and Entity Information | 12 Months Ended |
Dec. 31, 2016shares | |
Entity Registrant Name | WEIBO Corp |
Entity Central Index Key | 1,595,761 |
Document Type | 20-F |
Document Period End Date | Dec. 31, 2016 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Document Fiscal Year Focus | 2,016 |
Document Fiscal Period Focus | FY |
Class A ordinary shares | |
Entity Common Stock, Shares Outstanding | 109,155,101 |
Class B ordinary shares | |
Entity Common Stock, Shares Outstanding | 108,921,106 |
Ordinary Shares | |
Entity Common Stock, Shares Outstanding | 218,076,207 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 364,766 | $ 237,440 |
Short-term investments | 31,188 | 98,439 |
Accounts receivable due | 116,054 | 120,230 |
Prepaid expenses and other current assets | 66,664 | 42,295 |
Total current assets | 597,237 | 498,404 |
Property and equipment, net | 22,816 | 22,850 |
Intangible assets, net | 1,100 | 1,966 |
Goodwill | 10,266 | 11,117 |
Long-term investments | 399,933 | 294,679 |
Other assets | 5,592 | 10,173 |
Total assets | 1,036,944 | 839,189 |
Current liabilities (including amounts of the consolidated VIE without recourse to the primary beneficiaries of $107,389 and $137,256 as of December 31, 2015 and 2016, respectively.) | ||
Accounts payable | 48,997 | 40,456 |
Accrued and other liabilities | 180,142 | 117,040 |
Deferred revenues | 48,964 | 39,091 |
Due to related parties | 12,188 | |
Total current liabilities | 278,103 | 208,775 |
Long-term liabilities | ||
Long-term deferred revenues | 666 | 1,047 |
Other long-term liabilities | 817 | 1,338 |
Total long-term liabilities | 1,483 | 2,385 |
Total liabilities | 279,586 | 211,160 |
Commitments and contingencies (Note 16) | ||
Shareholders' equity: | ||
Ordinary shares: $0.00025 par value; 2,400,000 and 2,400,000 shares (including 1,800,000 Class A ordinary shares, 200,000 Class B ordinary shares and 400,000 shares to be designated) authorized; 212,177 and 218,076 shares (including 109,155 Class A ordinary shares and 108,921 Class B ordinary shares) issued and outstanding as of December 31, 2015 and 2016, respectively. | 55 | 53 |
Additional paid-in capital | 979,805 | 938,922 |
Accumulated other comprehensive loss | (26,994) | (10,635) |
Accumulated deficit | (199,641) | (307,668) |
Total Weibo shareholders' equity | 753,225 | 620,672 |
Non-controlling interests | 4,133 | 7,357 |
Total shareholders' equity | 757,358 | 628,029 |
Total liabilities and shareholders' equity | 1,036,944 | 839,189 |
Third parties | ||
Current assets: | ||
Accounts receivable due | 61,655 | 32,217 |
Alibaba | ||
Current assets: | ||
Accounts receivable due | 24,293 | 54,052 |
Other related parties | ||
Current assets: | ||
Accounts receivable due | 30,106 | 33,961 |
Current liabilities (including amounts of the consolidated VIE without recourse to the primary beneficiaries of $107,389 and $137,256 as of December 31, 2015 and 2016, respectively.) | ||
Due to related parties | 9,300 | 8,000 |
SINA | ||
Current assets: | ||
Accounts receivable due | $ 18,565 | |
Current liabilities (including amounts of the consolidated VIE without recourse to the primary beneficiaries of $107,389 and $137,256 as of December 31, 2015 and 2016, respectively.) | ||
Due to related parties | $ 12,188 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Allowance for doubtful accounts | $ 6,529,000 | $ 1,375,000 |
Current liabilities | $ 278,103,000 | $ 208,775,000 |
Ordinary shares, par value (in dollars per share) | $ 0.00025 | $ 0.00025 |
Ordinary shares, shares authorized | 2,400,000 | 2,400,000 |
Ordinary shares, shares issued | 218,076 | 212,177 |
Ordinary shares, shares outstanding | 218,076 | 212,177 |
Class A ordinary shares | ||
Ordinary shares, shares authorized | 1,800,000 | 1,800,000 |
Ordinary shares, shares issued | 109,155 | |
Ordinary shares, shares outstanding | 109,155 | |
Class B ordinary shares | ||
Ordinary shares, shares authorized | 200,000 | 200,000 |
Ordinary shares, shares issued | 108,921 | |
Ordinary shares, shares outstanding | 108,921 | |
Ordinary shares to be designated | ||
Ordinary shares, shares authorized | 400,000 | 400,000 |
Consolidated VIEs without recourse to the primary beneficiaries | ||
Current liabilities | $ 137,256,000 | $ 107,389,000 |
Alibaba | ||
Allowance for doubtful accounts | 0 | 0 |
Other related parties | ||
Allowance for doubtful accounts | 1,483,000 | 0 |
Third parties | ||
Allowance for doubtful accounts | $ 5,046,000 | $ 1,375,000 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Advertising and marketing revenues | |||
Third parties | $ 428,275 | $ 207,657 | $ 129,644 |
Total advertising and marketing revenues | 570,982 | 402,415 | 264,782 |
Other revenues | 84,818 | 75,476 | 69,390 |
Total revenues | 655,800 | 477,891 | 334,172 |
Costs and Expenses | |||
Cost of revenues | 171,231 | 141,960 | 83,599 |
Sales and marketing | 148,283 | 126,059 | 120,361 |
Product development | 154,088 | 143,444 | 125,832 |
General and administrative | 41,218 | 28,925 | 26,483 |
Total costs and expenses | 514,820 | 440,388 | 356,275 |
Income (loss) from operations | 140,980 | 37,503 | (22,103) |
Loss from equity method investments | (130) | (6) | (5) |
Realized gain from investments | 534 | 944 | 481 |
Investment related impairment | (40,161) | (8,005) | (2,521) |
Interest and other income, net (including interest expense on amount due to SINA of $2,838, nil, and nil for 2014, 2015 and 2016, respectively) | 8,757 | 6,344 | 6,780 |
Change in fair value of investor option liability (Note 15) | (46,972) | ||
Income (loss) before income tax expenses | 109,980 | 36,780 | (64,340) |
Provision of income taxes | 4,316 | 2,591 | 1,128 |
Net income (loss) | 105,664 | 34,189 | (65,468) |
Less: Net loss attributable to non-controlling interests | (2,363) | (556) | (143) |
Net income (loss) attributable to Weibo | 108,027 | 34,745 | (65,325) |
Other comprehensive loss | |||
Currency translation adjustments (net of tax of nil, nil, and nil for 2014, 2015 and 2016 respectively) | (18,898) | (7,874) | (1,450) |
Available-for-Sale securities: | |||
Change in unrealized loss from available-for-sale securities (net of tax of nil, nil, and nil for 2014, 2015, and 2016, respectively) | (2,557) | (198) | (2,067) |
Reclassification adjustment for net loss included in net income (loss) (net of tax of nil, nil, and nil for 2014, 2015, and 2016, respectively) | 4,822 | ||
Net change, net of tax | 2,265 | (198) | (2,067) |
Total comprehensive income (loss) | 89,031 | 26,117 | (68,985) |
Less: Comprehensive loss attributable to non-controlling interests | (2,637) | (829) | (366) |
Comprehensive income (loss) attributable to Weibo | $ 91,668 | $ 26,946 | $ (68,619) |
Shares used in computing net income (loss) per share attributable to Weibo: | |||
Basic (in shares) | 214,745 | 208,163 | 186,878 |
Diluted (in shares) | 222,859 | 217,918 | 186,878 |
Income (loss) per share: | |||
Basic (in dollars per share) | $ 0.50 | $ 0.17 | $ (0.35) |
Diluted (in dollars per share) | $ 0.48 | $ 0.16 | $ (0.35) |
Alibaba | |||
Advertising and marketing revenues | |||
Related party | $ 57,908 | $ 143,650 | $ 107,587 |
SINA and other related parties | |||
Advertising and marketing revenues | |||
Related party | $ 84,799 | $ 51,108 | $ 27,551 |
CONSOLIDATED STATEMENTS OF COM5
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
COMBINED AND CONSOLIDATED STATEMENTS OF LOSS AND COMPREHENSIVE LOSS | |||
Interest expense on amount due to SINA | $ 0 | $ 0 | $ 2,838,000 |
Currency translation adjustments, tax | 0 | 0 | 0 |
Change in unrealized loss from available-for-sale securities, tax | 0 | 0 | 0 |
Reclassification adjustment for net loss included in net income (loss), tax | $ 0 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF SHAR
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT) - USD ($) shares in Thousands, $ in Thousands | Ordinary SharesSINA | Ordinary SharesAlibaba | Ordinary SharesIPO | Ordinary Shares | Additional Paid-In CapitalSINA | Additional Paid-In CapitalAlibaba | Additional Paid-In CapitalIPO | Additional Paid-In Capital | Accumulated Other Comprehensive Income (Loss) | Accumulated Deficit | Non-controlling Interests | SINA | Alibaba | IPO | Total |
Balance at Dec. 31, 2013 | $ 37 | $ 31,352 | $ 458 | $ (277,088) | $ 7,269 | $ (237,972) | |||||||||
Balance (in shares) at Dec. 31, 2013 | 150,392 | ||||||||||||||
Increase (Decrease) in Shareholders' Equity (Deficit) | |||||||||||||||
Issuance of ordinary shares pursuant to stock plan | $ 1 | 1,918 | 1,919 | ||||||||||||
Issuance of ordinary shares pursuant to stock plan (in shares) | 3,900 | ||||||||||||||
Issuance of ordinary shares (either in IPO or to related party) | $ 5 | $ 42,224 | $ 301,273 | $ 42,224 | $ 301,278 | ||||||||||
Issuance of ordinary shares (either in IPO or to related party) (in shares) | 2,923 | 19,320 | |||||||||||||
Deemed contribution from Alibaba due to exercise of call option by Alibaba | $ 15,300 | $ 15,300 | |||||||||||||
Repurchase of ordinary shares from SINA | $ (42,224) | $ (42,224) | |||||||||||||
Repurchase of ordinary shares from SINA (in shares) | (2,923) | ||||||||||||||
Conversion of preferred shares into ordinary shares | $ 8 | 479,604 | 479,612 | ||||||||||||
Conversion of preferred shares into ordinary shares (in shares) | 30,046 | ||||||||||||||
Non-cash stock-based compensation | 13,779 | 13,779 | |||||||||||||
Deemed contribution from SINA | $ 61,176 | $ 61,176 | |||||||||||||
Sale of subsidiaries' shares to non-controlling interests | 1,283 | 1,283 | |||||||||||||
Net income (loss) | (65,325) | (143) | (65,468) | ||||||||||||
Currency translation adjustments | (1,227) | (223) | (1,450) | ||||||||||||
Net change in other comprehensive loss from available-for-sale securities | (2,067) | (2,067) | |||||||||||||
Balance at Dec. 31, 2014 | $ 51 | 904,402 | (2,836) | (342,413) | 8,186 | 567,390 | |||||||||
Balance (in shares) at Dec. 31, 2014 | 203,658 | ||||||||||||||
Increase (Decrease) in Shareholders' Equity (Deficit) | |||||||||||||||
Issuance of ordinary shares pursuant to stock plan | $ 2 | 8,121 | 8,123 | ||||||||||||
Issuance of ordinary shares pursuant to stock plan (in shares) | 8,519 | ||||||||||||||
Non-cash stock-based compensation | 26,399 | 26,399 | |||||||||||||
Net income (loss) | 34,745 | (556) | 34,189 | ||||||||||||
Currency translation adjustments | (7,601) | (273) | (7,874) | ||||||||||||
Net change in other comprehensive loss from available-for-sale securities | (198) | (198) | |||||||||||||
Balance at Dec. 31, 2015 | $ 53 | 938,922 | (10,635) | (307,668) | 7,357 | $ 628,029 | |||||||||
Balance (in shares) at Dec. 31, 2015 | 212,177 | 212,177 | |||||||||||||
Increase (Decrease) in Shareholders' Equity (Deficit) | |||||||||||||||
Issuance of ordinary shares pursuant to stock plan | $ 2 | 3,981 | $ 3,983 | ||||||||||||
Issuance of ordinary shares pursuant to stock plan (in shares) | 5,899 | ||||||||||||||
Non-cash stock-based compensation | 36,902 | 36,902 | |||||||||||||
Sale (Purchase) of subsidiaries' shares to (from) non-controlling shareholders, net | (587) | (587) | |||||||||||||
Net income (loss) | 108,027 | (2,363) | 105,664 | ||||||||||||
Currency translation adjustments | (18,624) | (274) | (18,898) | ||||||||||||
Net change in other comprehensive loss from available-for-sale securities | 2,265 | 2,265 | |||||||||||||
Balance at Dec. 31, 2016 | $ 55 | $ 979,805 | $ (26,994) | $ (199,641) | $ 4,133 | $ 757,358 | |||||||||
Balance (in shares) at Dec. 31, 2016 | 218,076 | 218,076 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Cash flows from operating activities: | |||
Net income (loss) | $ 105,664 | $ 34,189 | $ (65,468) |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | |||
Depreciation and amortization | 13,982 | 20,950 | 23,060 |
Stock-based compensation | 36,902 | 26,399 | 13,779 |
Provision (reversal) for allowance for doubtful accounts | 7,787 | (368) | 2,138 |
Deferred income tax expense (benefits) | (4,630) | (977) | 866 |
Loss from equity method investments | 130 | 6 | 5 |
Gain on sale of investments | (328) | (608) | (481) |
Investment related impairment | 40,161 | 8,005 | 2,521 |
Change in fair value of investor option liability | 46,972 | ||
Loss on disposal of property and equipment | 191 | 184 | |
Changes in assets and liabilities, net of acquisition: | |||
Accounts receivable due from third parties | (33,109) | 4,988 | (14,938) |
Prepaid expenses and other current assets | (19,527) | 470 | (12,283) |
Other assets | 1,134 | 713 | (23) |
Accounts payable | 8,915 | 16,099 | 12,809 |
Accrued and other liabilities | 68,102 | 46,271 | 22,356 |
Deferred revenues | 9,492 | 17,753 | 5,799 |
Net cash provided by (used in) operating activities | 236,244 | 181,971 | (19,412) |
Cash flows from investing activities: | |||
Purchases of short-term investments | (314,363) | (149,374) | (230,161) |
Maturities of short-term investments | 373,805 | 216,615 | 321,208 |
Investment and prepayment in long-term investments | (155,122) | (268,758) | (54,383) |
Proceeds from disposal/refund of long-term investments | 12,188 | 6,090 | 1,644 |
Purchases of property and equipment | (13,253) | (10,858) | (14,743) |
Cash paid for business acquisition, net of cash acquired | (22,025) | (9,648) | |
Net cash provided by (used in) investing activities | (96,745) | (228,310) | 13,917 |
Cash flows from financing activities: | |||
Proceeds from IPO, net of commission | 306,491 | ||
Payment of offering expenses | (5,213) | ||
Proceeds from employee options exercised | 4,183 | 7,822 | 1,508 |
Payment for ordinary shares and repurchase of vested options | (6,873) | ||
Proceeds from sales of non-controlling interests in subsidiaries | 968 | ||
Repayment of amount due to SINA | (2,863) | (269,042) | |
Payments to non-controlling shareholders | (1,148) | ||
Net cash provided by financing activities | 3,035 | 4,959 | 43,663 |
Effect of exchange rate changes on cash and cash equivalents | (15,208) | (6,045) | (2,402) |
Net increase (decrease) in cash and cash equivalents | 127,326 | (47,425) | 35,766 |
Cash and cash equivalents at the beginning of the year | 237,440 | 284,865 | 249,099 |
Cash and cash equivalents at the end of the year | 364,766 | 237,440 | 284,865 |
Supplemental disclosure of cash flow information | |||
Cash paid for interest | (7,580) | ||
Cash paid for income tax | (3,386) | (311) | |
Supplemental schedule of non-cash investing and financing activities | |||
Conversion of preferred shares to ordinary shares | 479,612 | ||
Property and equipment in accounts payable | 2,158 | 2,532 | 2,420 |
Alibaba | |||
Changes in assets and liabilities, net of acquisition: | |||
Accounts receivable due from Alibaba | 29,759 | 10,673 | (43,426) |
Supplemental schedule of non-cash investing and financing activities | |||
Deemed contribution from Alibaba | 15,300 | ||
Other related parties | |||
Changes in assets and liabilities, net of acquisition: | |||
Accounts receivable due from other related parties | 2,372 | (15,313) | (16,589) |
SINA | |||
Changes in assets and liabilities, net of acquisition: | |||
Amount due to (from) SINA | $ (30,753) | 12,537 | 8,233 |
Interest on amount due to SINA | (4,742) | ||
Cash flows from financing activities: | |||
Funding from SINA | 15,824 | ||
Repayment of amount due to SINA | $ (2,863) | (276,614) | |
Supplemental schedule of non-cash investing and financing activities | |||
Deemed contribution from SINA (Note 10) | $ 61,176 |
Operations and reorganization
Operations and reorganization | 12 Months Ended |
Dec. 31, 2016 | |
Operations and reorganization | |
Operations and reorganization | 1. Operations and reorganization Weibo Corporation (“Weibo” or the “Company”) is a leading social media for people to create, share and discover Chinese-language content. It provides an unprecedented and simple way for people and organizations to publicly express themselves in real time, interact with others on a massive global platform and stay connected with the world. As a microcosm of the Chinese society and a cultural phenomenon in China, Weibo allows people to be heard publicly and exposed to the rich ideas, cultures and experiences of the broader world. Media outlets use Weibo as a source of news and a distribution channel for their headline news. Government agencies and officials use Weibo as an official communication channel for disseminating information timely and gauging public opinion to improve public services. Charities use Weibo to make the world a better place by launching charitable projects, seeking donations and volunteers and leveraging celebrities and organizations on Weibo to amplify their impact to society. Weibo generates its revenues mostly from advertising and marketing services, as well as from other services, including game-related services, VIP membership and data licensing. Incorporated in the Cayman Islands, Weibo Corporation is a controlled subsidiary of Sina Corporation (the “Parent” or “SINA”). In April 2014, the Company completed an initial public offering (the “IPO”) with the new issuance of 19,320,000 Class A ordinary shares and received $306.5 million in net proceeds. Immediately prior to the completion of the IPO, all the ordinary shares held by SINA was converted into an equal number of the Class B ordinary shares, all the ordinary shares held by other shareholders was converted into an equal number of the Class A ordinary shares, and all of its outstanding preferred shares were automatically converted into 30,046,154 Class A ordinary shares. The call option held by a subsidiary of Alibaba Group was exercised to purchase 29,990,778 Class A ordinary shares from SINA and the Company. Each Class A ordinary share is entitled to one vote per share and each Class B ordinary share is entitled to three votes per share. Each Class B ordinary share can be converted into one Class A ordinary share at any time, while Class A ordinary shares cannot be converted into Class B ordinary shares. Reorganization The Weibo business was founded by SINA, its parent, in 2009. Prior to the establishment of the Company, the operation of Weibo business was carried out by various subsidiaries and variable interest entities (“VIE”) of SINA (the “Predecessor Operations”). After its establishment, the Company gradually completed the reorganization steps as described below (the “Reorganization”). Establishment of Weibo Corporation . Weibo Corporation, an exempted company with limited liability, is the holding company for the Weibo business. Weibo HK is a wholly owned subsidiary of Weibo, and Weibo Technology, a wholly foreign-owned enterprise, (“the WFOE”), is a subsidiary of Weibo HK. The Company’s VIE and VIE’s subsidiaries are controlled by the WFOE through a series of contractual agreements. Weibo Corporation, its subsidiaries, VIE and VIE’s subsidiaries together are referred to as “the Group.” The following sets forth the Company’s major subsidiaries, VIE and VIE’s subsidiary: Company Date of Place of Percentage of Major Subsidiaries Weibo Hong Kong Limited (“Weibo HK”) July 19, 2010 Hong Kong % Weibo Internet Technology (China) Co., Ltd. (“Weibo Technology” or “the WFOE”) October 11, 2010 PRC % Major VIE and VIE’s subsidiary Beijing Weimeng Technology Co., Ltd (“Weimeng”) August 9, 2010 PRC % Beijing Weibo Interactive Internet Technology Co., Ltd. (‘‘Weibo Interactive’’) Acquired in May 2013 PRC % Transfer of assets and liabilities relating to the Weibo business to the Group. According to the Company’s Shareholder Agreement dated April 29, 2013, the Group shall be liable for a loan payable to SINA for assets and liabilities incurred by SINA for the development of the Weibo business. The interest on the loan to SINA is calculated based on actual spending incurred by SINA for the development of Weibo business at each period end. The interest was calculated at prevailing market interest rates by reference to the three-month time deposit rate of The People’s Bank of China, which ranged from 2.55% to 3.05%. The loans are repayable upon demand. There is no written loan agreement signed between SINA and Weibo. In 2014 after the IPO, the Group paid $276.6 million to SINA to settle the loan and the related interest expenses with SINA. The unsettled payables generated after the IPO are interest free and payable on demand. The interest expenses incurred was $2.8 million, nil and nil for the years ended December 31, 2014, 2015 and 2016, respectively. Transfer of Equity Interest in Weibo Funds . SINA held a 55% and 85% equity interest in two limited liability partnerships, (“Weibo Funds’’), since 2011 and 2013, respectively, and had control over the operations and assets of the Weibo Funds, which engage in the investment of high-tech startups related to the Weibo business. On June 30, 2015, SINA transferred its equity interest in the Weibo Funds to the Group for a consideration of $22.0 million, and the Group accounted for such transaction as a business combination between entities under common control (Note 6). The Group’s consolidated financial statements presented for prior periods have been retrospectively adjusted to reflect the transfer from the first day SINA took control. The amounts recognized in the Group’s consolidated financial statements reflect the assets, liabilities, and net equity of the Weibo Funds at SINA’s historical carrying value. A consideration of $22.0 million payable to SINA was recognized when the transfer became legally effective in June 2015. Intellectual Property License Agreement. The intellectual property license agreement was entered into by and between SINA and the Company in April 2013. Under this agreement, SINA granted the Company and its subsidiaries a perpetual, worldwide, royalty-free, fully paid-up, non-sublicensable, non-transferable, limited, exclusive license of certain trademarks and a non-exclusive license of certain other intellectual property owned by SINA to make, sell, offer to sell and distribute products, services and applications on a microblogging and social networking platform. The Company granted SINA and its affiliates a non-exclusive, perpetual, worldwide, non-sublicensable, non-transferable limited license of certain of the Company’s intellectual property to use, reproduce, modify, prepare derivative works of, perform, display or otherwise exploit such intellectual property. This agreement commenced on April 29, 2013 and will continue to be in effect unless terminated by SINA should the Company breach the terms as provided in the agreement. Basis of Presentation for the Reorganization. Since the Group and the Predecessor Operations are under common control, the accompanying consolidated financial statements include the assets, liabilities, revenue, expenses and cash flows that were directly attributable to the Predecessor Operations for all periods presented. The assets and liabilities have been stated at historical carrying amounts. In addition, the accompanying consolidated financial statements have been prepared as if the current corporate structure, including the transfer of Weibo Funds in June 2015, had been in existence throughout the periods presented. Only those assets and liabilities that are specifically identifiable to Weibo business are included in the Group’s consolidated balance sheets. Accounts receivable amounts directly related to Weibo but for which SINA will receive payments and remit payments to the Group are included in the amount due from SINA. Liabilities directly related to Weibo but for which SINA will make payments and receive reimbursements from the Group are included in the amount due to SINA. The Group was liable for a payable to SINA for assets and liabilities incurred by SINA for the development of the Weibo business and presented as amount due to SINA in the consolidated balance sheets. Loan from SINA is presented under cash flow from financing activities in the consolidated statements of cash flows, whereas cash payment for billings from SINA for costs and expenses allocated is presented under operating activities. The Group’s statements of comprehensive income (loss) consists all the related costs and expenses of the Weibo business, including allocation to the cost of revenues, sales and marketing expenses, product development expenses, and general and administrative expenses, which are incurred by SINA but related to the Weibo business. These allocations were based on proportional cost allocation by considering proportion of the revenues, infrastructure usage metrics and labor usage metrics, among other things, attributable to the Group and are made on a basis considered reasonable by management. Income tax liability is calculated based on a separate return basis as if the Group had filed a separate tax return. Total cost and expenses allocated from SINA were as follows: Year Ended December 31, 2014 2015 2016 (In thousands) Cost of revenues $ $ $ Sales and marketing Product development General and administrative $ $ $ However, while the expenses allocated to the Group for these items are not necessarily indicative of the expenses that would have been incurred if the Group had been a separate and independent entity, the Company does not believe that there is any significant difference between the nature and amount of these allocated expenses and the expenses that would have been incurred if the Group had been a separate and stand-alone entity. Consolidation The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, VIE, of which the Company is the primary beneficiary, VIE’s subsidiaries, and the Weibo Funds, which were purchased from SINA in June 2015. In accordance with ASC Subtopic 805-50, the transfer of the Weibo Funds was accounted for as a business combination between entities under common control. The consolidated financial statements of the Group presented for prior periods were retrospectively adjusted to reflect the transfer on a consolidated basis from the first day SINA took control of the Weibo Funds. To comply with PRC laws and regulations, the Group provides a substantial amount of its services in China via the VIE, which holds critical operating licenses that enable the Group to do business in China. Most of the Group’s revenues, costs and net income (loss) in China were generated directly or indirectly through the VIE or the Predecessor Operations. The Company, through its subsidiary, has signed various agreements with the VIE to allow the transfer of economic benefits from the VIE to the Company. The Group has determined that it is the primary beneficiary of the VIE through Weibo Technology’s contractual arrangements with the VIE. Accordingly, the Company has consolidated the VIE’s results of operations and assets and liabilities in the Group’s financial statements pursuant to the United States Generally Accepted Accounting Principles (“US GAAP”) for all the periods presented. Shareholders of the VIE are certain nominee shareholders of the Company or SINA. The capital for their investments in the VIE is funded by the Company and recorded as interest-free loans to these individuals. These loans were eliminated with the capital of the VIE during consolidation. Each shareholder of the VIE has agreed to transfer his equity interest in the VIE to Weibo Technology when permitted by PRC laws and regulations or to designees of the Company at any time for the amount of loans outstanding. All voting rights of the VIE, including without limitation the right to appoint all directors of the VIE, have been assigned to Weibo Technology. Weibo Technology has also entered into exclusive technical service agreements with the VIE under which Weibo Technology provides technical and other services to the VIE in exchange for substantially all net income of the VIE. In addition, the shareholders of the VIE have pledged their shares in the VIE as collateral for the non-payment of loans or for the technical and other services fees due to Weibo Technology. As of December 31, 2015 and 2016, the total amount of interest-free loans to the VIE’s shareholders was $10.0 million and $9.4 million, respectively and the aggregate accumulated loss of the VIE and VIE’s subsidiaries was $32.8 million and $54.5 million, respectively, which were included in the Group’s consolidated financial statements. The following table sets forth the assets, liabilities, results of operations and cash flows of the VIE and VIE’s subsidiaries taken as a whole, including the Predecessor Operations, which are included in the Group’s consolidated balance sheets and statements of comprehensive income (loss): As of December 31, 2015 2016 (In thousands) Cash, cash equivalents and short-term Investments $ $ Accounts receivable Property and equipment, net Intangible assets Goodwill Prepayment for long-term investments Long-term investments Deferred tax assets Amount due from SINA — Others Total assets $ $ Accounts payable $ $ Accrued and other liabilities Deferred revenues Income tax payable Amount due to SINA — Amount due to the subsidiaries of the Group Deferred tax liability Total liabilities $ $ Year Ended December 31, 2014 2015 2016 (In thousands) Net revenues $ $ $ Net loss $ ) $ ) $ ) Year Ended December 31, 2014 2015 2016 (In thousands) Net cash provided by operating activities $ $ $ ) Net cash used in investing activities $ ) $ ) $ ) Net cash used in financing activities $ ) $ — $ ) Net increase (decrease) in cash and cash equivalents $ ) $ $ ) Under the contractual arrangements with the VIE, the Company has the power to direct activities of the VIE through Weibo Technology and can have assets transferred freely out of the VIE without restrictions. Therefore, the Company considers that there is no asset of the VIE that can only be used to settle obligations of the VIE and VIE’s subsidiaries, except for the registered capital and non-distributable reserve funds of the VIE and VIE’s subsidiaries, amounting to $51.9 million and $56.2 million as of December 31, 2015 and 2016, respectively. Since the VIE is incorporated as limited liability company under the PRC Company Law, creditors of the VIE do not have recourse to the general credit of the Company. There is currently no contractual arrangement that would require the Company to provide additional financial support to the VIE. As the Company is conducting certain businesses mainly through the VIE, the Company may provide such support on a discretionary basis in the future, which could expose the Company to a loss. The total amount of costs and expenses allocated from SINA to the VIE was $16.1 million, $8.4 million and $12.3 million for the years ended December 31, 2014, 2015 and 2016, respectively. Unrecognized revenue-producing assets held by the VIE include the Internet Content Provision License, the Online Culture Operating Permit, and the domain names of Weibo.com, Weibo.cn and Weibo.com.cn. Recognized revenue-producing assets held by the VIE include customer lists relating to game-related services, game platform technology and a non-compete agreement, which were acquired mostly through acquisitions. Unrecognized revenue-producing assets, including customer lists relating to advertising and marketing services, game-related services, VIP membership and data licensing, as well as trademarks, are also held by Weibo Technology. The following is a summary of the VIE agreements: Loan Agreements . The Company’s wholly owned subsidiary Weibo Technology has granted interest-free loans to each shareholder of the VIE with the sole purpose of providing funds necessary for capital injection into the VIE. The terms of the loans are for 10 years, and Weibo Technology has the right to, at its own discretion, shorten or extend the terms of the loans, if necessary. These loans were eliminated with the capital of the VIE during consolidation. Share Transfer Agreements. Each shareholder of the VIE has granted Weibo Technology an option to purchase his shares in the VIE at a purchase price equal to the amount of the capital injection. Weibo Technology may exercise such option at any time until it has acquired all of the shares of the VIE, subject to applicable PRC laws. The option will be effective until the earlier of (i) the shareholders of the VIE and Weibo Technology have fully performed their obligations under this agreement, and (ii) the respective shareholders of the VIE and Weibo Technology agree to terminate the share transfer agreement in writing. Loan Repayment Agreements. Each shareholder of the VIE has agreed with Weibo Technology that the interest-free loans under the loan agreements shall only be repaid through share transfer. Once the share transfers are completed, the purchase price for the share transfer will be set off against the loan repayment. Agreements on Authorization to Exercise Shareholder’s Voting Power . Each shareholder of the VIE has authorized Weibo Technology to exercise all his voting power as a shareholder of the VIE on all matters requiring shareholders’ approval under PRC laws and regulations and the articles of association of the VIE, including without limitation to the appointment of directors, transfer, mortgage or dispose of the VIE’s assets, transfer of any equity interest in the VIE, and merger, split, dissolution and liquidation of the VIE. The authorizations are irrevocable and will not expire until the VIE dissolves. Share Pledge Agreements . Each shareholder of the VIE has pledged all of his shares in the VIE and all other rights relevant to the share rights to Weibo Technology, as a collateral security for his obligations to pay off all debts to Weibo Technology, under the loan agreement and for the payment obligations of the VIE under the trademark license agreement and the technical services agreement. In the event of default of any payment obligations, Weibo Technology will be entitled to certain rights, including transferring the pledged shares to itself and disposing the pledged shares through sale or auction. During the term of each agreement, Weibo Technology is entitled to receive all dividends and distributions paid on the pledged shares. The pledges will be effective until the earlier of (i) the VIE and the shareholders of the VIE have fully performed their obligations under the above-referred agreements, and (ii) Weibo Technology unilaterally consents to terminate the respective share pledge agreement. Exclusive Technical Services Agreement, Exclusive Sales Agency Agreement and Trademark License Agreement. The VIE has entered into an exclusive technical services agreement, an exclusive sales agency agreement and a trademark license agreement with Weibo Technology. Under the exclusive technical services agreement, Weibo Technology is engaged to provide technical services for the VIE’s online advertising and other related businesses. Under the exclusive sales agency agreement, the VIE has granted Weibo Technology the exclusive right to distribute, sell and provide agency services for all the products and services provided by the VIE. The term of the technical service agreement and the sales agency agreement will not expire until the VIE dissolves. Due to its control over the VIE, Weibo Technology has the right to determine the service fee to be charged to the VIE under these agreements. By considering, among other things, the technical complexity of the service, the actual cost that may be incurred for providing such service, the operations of the VIE, applicable tax rates, planned capital expenditure and business strategies. Weibo Technology charged an amount of $187.8 million, $232.4 million and $335.6 million in service fees from the VIE under these agreements for the years ended December 31, 2014, 2015 and 2016, respectively, which was determined based on the actual cost incurred for providing such service and the cash position and operation of the VIE. Under the trademark license agreement, Weibo Technology has granted the VIE trademark licenses to use its trademarks for specific areas, and the VIE is obligated to pay license fees to Weibo Technology. The term of the agreement is for one year and is automatically renewed provided that there is no objection from Weibo Technology. The Company believes that the contractual arrangements among its subsidiary, VIE and VIE’s shareholders are in compliance with the current PRC laws and legally enforceable. However, uncertainties in the interpretation and enforcement of the PRC laws, regulations and policies could limit the Company’s ability to enforce these contractual arrangements. As a result, the Company may be unable to consolidate the VIE and VIE’s subsidiaries in the consolidated financial statements. The Company’s ability to control the VIE also depends on the authorization by the shareholders of the VIE to exercise voting rights on all matters requiring shareholder approval in the VIE. The Company believes that the agreements on authorization to exercise shareholder’s voting power are legally enforceable. In addition, if the legal structure and contractual arrangements with the VIE were found to be in violation of any future PRC laws and regulations, the Company may be subject to fines or other actions. The Company believes the possibility that it will no longer be able to control and consolidate the VIE will occur as a result of the aforementioned risks and uncertainties are remote. |
Significant Accounting Policies
Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2016 | |
Significant Accounting Policies | |
Significant Accounting Policies | 2. Significant Accounting Policies Basis of presentation The preparation of the Group’s consolidated financial statements is in conformity with US GAAP. The consolidated financial statements include the accounts of Weibo, its wholly owned subsidiaries, VIE, and VIE’s subsidiaries. All significant intercompany balances and transactions have been eliminated. Commencing on January 1, 2016, in order to enhance comparability with industry peers, payables that have been invoiced or formally agreed with the suppliers were recorded in accounts payable. The relevant amounts in prior periods have been reclassified from accrued and other liabilities accordingly. Such reclassification amounted to $37.9 million as of December 31, 2015. Use of estimates Conformity with US GAAP requires the use of estimates and judgments that affect the reported amounts in the consolidated financial statements and accompanying notes. These estimates form the basis for judgments the management makes about the carrying values of the assets and liabilities, which are not readily apparent from other sources. GAAP requires making estimates and judgments in several areas, including, but not limited to, the basis of consolidation, revenue recognition, fair value accounting, income taxes, goodwill and other long-lived assets, allowances for doubtful accounts, stock-based compensation, and the estimated useful lives of assets. The management bases the estimates and judgments on historical information and on various other assumptions that management believes are reasonable under the circumstances. Actual results could differ materially from such estimates. Revenue recognition Advertising and marketing revenues Advertising and marketing revenues are derived principally from online advertising, including social display ads and promoted marketing. Social display ad arrangements allow customers to place advertisements on particular areas of the Group’s platform in particular formats and over particular periods of time, which is typically no more than three months. The Group enters into cost per mille (“CPM”), or cost per thousand impressions, advertising arrangements with the customers, under which the Group recognizes revenues based on the number of times that the advertisement has been displayed. The Group also enters into cost per day (“CPD”) advertising arrangements with customers, under which the Group recognizes revenues ratably over the contract periods. Promoted marketing arrangements are primarily priced based on CPM or cost per engagement (“CPE”). An engagement may include when a user clicks on a link, becomes a follower of the marketing customer account, shares the promoted feed or marks the feed as a favorite. Under the CPM model, customers are obligated to pay when the advertisement is displayed, while under the CPE model, customers are obligated to pay based on the number of engagements with the promoted feed. Revenues are recognized only when the following criteria have been met: (1) persuasive evidence of an arrangement exists; (2) the price is fixed or determinable; (3) the service is performed; and (4) collectability of the related fee is reasonably assured. The majority of the Group’s revenue transactions are based on standard business terms and conditions, which are recognized net of agency rebates. Advertising arrangements involving multiple deliverables are broken down into single-element arrangements based on their relative selling price for revenue recognition purposes. For multiple-deliverable revenue arrangements, it is required that the arrangement consideration to be allocated to all deliverables at the inception of the arrangement on the following basis: (a) vendor-specific objective evidence (VSOE) of selling price, if it exists, otherwise, (b) third-party evidence (TPE) of the selling price. If neither (a) nor (b) exists, then use (c) management’s best estimate of the selling price of the deliverable. The Group primarily uses VSOE to allocate the arrangement consideration if such selling price is available. For the deliverables that have not been sold separately, the best estimate of the selling price (BESP) is used, which has taken into consideration of the pricing of advertising areas of the Group’s platform with similar popularity and advertisements with similar format and quoted prices from competitors and other market conditions. Revenues recognized with reference to BESP were immaterial for all periods presented. The Group recognizes revenues on the elements delivered and defers the recognition of revenues for the undelivered elements until the remaining obligations have been satisfied. Revenues from barter transactions are recognized during the period in which the advertisements are displayed on the Group’s properties. Barter transactions in which physical goods or services (other than advertising services) are received in exchange for advertising services are recorded based on the fair values of the goods or services received. Revenues from barter transactions were immaterial for all periods presented. Other revenues The Group generates other revenues principally from fee-based services, including game-related services, VIP membership and data licensing. Revenues from these services are recognized over the periods in which the services are performed, provided that no significant obligations remain, collection of the receivable is reasonably assured and the amounts can be accurately estimated. Game-related services. Game-related service revenues are mostly generated from the sale of virtual items from games operated by the Group. The Group collects payments from the game players in connection with the sale of virtual currency, which are converted into in-game credits (game tokens) that can be used to purchase virtual items in the third-party developed games. The Group remits certain predetermined percentages of the proceeds to the game developers when the virtual currency is converted into in-game credits. The Group has determined that the game developers are the primary obligors for the game-related service given that the game developers are responsible for developing, maintaining and updating the game related services and have reasonable latitude to establish the prices of virtual items for which in-game credits are used. The Group views the game developers to be its customers, and the Group’s primary responsibility is to promote the games of the developers, provide virtual currency exchange service, maintain the platform for game players to easily access the games and offer customer support to resolve registration, log-in, currency exchange and other related issues. Accordingly, the Group records game-related revenue, net of predetermined revenue sharing with the game developers. Virtual currencies in general are not refundable once they have been sold unless there are unused in-game credits at the time a game is discontinued. Sale of virtual currencies net of the game developer proceeds are recognized as revenues over the estimated consumption period of in-game virtual items, which is typically from a few days to one month after the purchase of in-game credits. VIP membership. VIP membership is a service package consisting of user certification and preferential benefits, such as daily priority listings and higher quota for following user accounts. Prepaid VIP membership fees are recorded as deferred revenue and recognized as revenue ratably over the contract period of the membership service. Data licensing. The Group began to offer data licensing arrangements that allow its customers to access, search and analyze historical and real-time data on its platform. The data licensing arrangement is for a fixed period, typically one year, and such revenue is recognized ratably over the contract period. Cost of revenues Cost of revenues consists mainly of costs associated with the maintenance of platform, which primarily include bandwidth and other infrastructure costs, labor cost and turnover taxes levied on the revenues, part of which were allocated from SINA (see Note 1 Reorganization ). The Group presents taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction on a gross basis in the financial statements. The Group is subject to 6.7% Value-Added Tax (“VAT”) and surcharges for its revenues and an additional 3% cultural business construction fees for its advertising and marketing revenues. The total amount of such taxes on its advertising and marketing revenues for the years ended December 31, 2014, 2015 and 2016 were $23.2 million, $35.3 million and $49.9 million, respectively. Sales and Marketing Expenses Sales and marketing expenses consist mainly of online and offline advertising and promotional expenses, salary, benefits and commission expenses, and facility expenses. Advertising and promotional expenses generally represent the expenses of promotions of corporate image and product marketing. The Group expenses all advertising and promotional expenses as incurred and classifies these expenses under sales and marketing expenses. For the years ended December 31, 2014, 2015 and 2016, the advertising and promotional expenses were $71.0 million, $81.2 million and $92.2 million, respectively. Product development expenses Product development expenses consist mainly of payroll-related expenses and infrastructure costs incurred for enhancement to and maintenance of the Group’s platform, as well as costs associated with new product development and product enhancements, part of which were allocated from SINA (see Note 1 Reorganization ). The Group expenses all costs incurred for the planning and post implementation phases of development and costs associated with repair or maintenance of the existing site or the development of platform content. Since inception, the amount of costs qualifying for capitalization has been immaterial and, as a result, all product development costs have been expensed as incurred. Stock-based compensation All stock-based awards to employees and directors, such as stock options and restricted share units (“RSUs”), are measured at the grant date based on the fair value of the awards. Stock-based compensation, net of forfeitures, is recognized as expenses on a straight-line basis over the requisite service period, which is the vesting period. The Group uses the Black-Scholes option pricing model to estimate the fair value of stock options. The determination of estimated fair value of stock-based payment awards on the grant date using an option pricing model is affected by the fair value of the Company’s ordinary shares as well as assumptions regarding a number of complex and subjective variables. These variables include the expected value volatility of the Company over the expected term of the awards, actual and projected employee stock option exercise behaviors, a risk-free interest rate and expected dividends, if any. Options granted generally vest over four years. The Group recognizes the estimated compensation cost of restricted share units based on the fair value of its ordinary shares on the date of the grant. The Group recognizes the compensation cost, net of estimated forfeitures, over a vesting term of generally four years for service-based restricted share units. The Group also recognizes the compensation cost of performance-based restricted share units, net of estimated forfeitures, according to the probability of performance goal achievement at the end of each reporting period. Forfeitures are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates. The Group uses historical data to estimate pre-vesting option and records stock-based compensation expense only for those awards that are expected to vest. See Note 7 Stock-based Compensation for further discussion on stock-based compensation. Taxation Income taxes Income taxes are accounted for using the asset and liability approach. Under this approach, income tax expense is recognized for the amount of taxes payable or refundable for the current year. In addition, deferred tax assets and liabilities are recognized for expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carry forwards. The Group records a valuation allowance to reduce deferred tax assets to an amount for which realization is more likely than not. Income tax liability is calculated based on a separate return basis as if the Group had filed separate tax returns before the Reorganization. Uncertain tax positions. To assess uncertain tax positions, the Group applies a more likely than not threshold and a two-step approach for the tax position measurement and financial statement recognition. Under the two-step approach, the first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. Operating leases The Group leases office space under operating lease agreements with initial lease terms ranging from one to five and a half years. Rental expense is recognized from the date of initial possession of the leased property on a straight-line basis over the term of the lease, part of which were allocated from SINA (see Note 1 Reorganization ). Certain lease agreements contain rent holidays, which are recognized on a straight-line basis over the lease term. Lease renewal periods are considered on a lease-by-lease basis and are generally not included in the initial lease terms. The allocated rental expenses from SINA for the years ended December 31, 2014, 2015 and 2016, were $4.0 million, $3.5 million and $3.9 million, respectively. Cash equivalents The Group considers all highly liquid investments with original maturities of three months or less as cash equivalents. Cash equivalents are comprised of investments in time deposits stated at cost plus accrued interest. Accounts receivable and allowances for doubtful accounts Accounts receivable are recorded and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. The Group maintains an allowance for doubtful accounts which reflects its best estimate of amounts that will not be collected. The Group determines the allowance for doubtful accounts based on a historical, rolling average, bad debt rate in the prior period and other factors, such as credit-worthiness of the customers and the age of the receivable balances. The Group also provides specific provisions for bad debts when facts and circumstances indicate that the receivable is unlikely to be collected. If the financial condition of the Group’s customers were to deteriorate, resulting in an impairment of their ability to make payments, more bad debt allowances may be required. Fair value measurements Financial instruments All financial assets and liabilities are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value: · Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. · Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical asset or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. · Level 3 applies to asset or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The carrying amount of cash and cash equivalents, short-term investments, accounts receivable due from third parties, accounts receivable due from Alibaba, accounts receivable due from other related parties, amount due from/to SINA, accounts payable, accrued and other liabilities approximates fair value because of their short-term nature. See Note 15 Financial Instruments for additional information. Long-term investments Long-term investments are comprised of investments in publicly traded and privately held companies. For long-term investments over which the Group does not have significant influence, the cost method of accounting is used. For long-term investments in shares that are not common stock or in-substance common stock and that do not have readily determinable fair value, the cost method accounting is used. The Group uses the equity method to account for ordinary-share-equivalent equity investments over which it has significant influence but does not own a majority equity interest or otherwise control. The Group monitors its investments accounted for under the cost method and equity method for other-than-temporary impairment by considering factors such as current economic and market conditions and the operating performance of the business, including current earnings trends, undiscounted cash flows, and other company-specific information, such as recent financing rounds. Determination of the fair value, particularly for investments in privately-held companies whose revenue model is unclear, requires significant judgment to determine appropriate estimates and assumptions. Changes in these estimates and assumptions could affect the calculation of the fair value of the investments and the determination of whether any identified impairment is other-than-temporary. If any impairment is considered other-than-temporary, the Group will write down the asset to its fair value and take the corresponding charge to the consolidated statements of comprehensive income (loss). The Group recorded an impairment charge of $2.5 million, $6.6 million and $31.6 million to the carrying value of long-term investments accounted for under the cost method and equity method for the years ended December 31, 2014, 2015 and 2016, respectively. The Group invests in marketable equity securities to meet business objectives and intends to hold the securities for more than a year from the balance sheet date. These marketable securities are reported at fair value, classified and accounted for as available-for-sale (“AFS”) securities under long-term investments. The treatment of a decline in the fair value of an individual security is based on whether the decline is other-than-temporary. The Group assesses its available-for-sale securities for other-than-temporary impairment by considering factors including, but not limited to, its ability and intent to hold the individual security, severity of the impairment, expected duration of the impairment and forecasted recovery of fair value. Investments classified as available-for-sale securities are reported at fair value with unrealized gains or losses, if any, recorded in accumulated other comprehensive loss in shareholders’ equity. If the Group determines a decline in fair value is other-than-temporary, the cost basis of the individual security is written down to fair value as a new cost basis and the amount of unrealized loss recorded in accumulated other comprehensive loss will be reclassified to net income (loss) in the consolidated statements of comprehensive income (loss). The fair value of the investment would then become the new cost basis of the investment and is not adjusted for subsequent recoveries in fair value. The Group recorded an impairment charge of nil, nil and $4.8 million to AFS securities for the years ended December 31, 2014, 2015 and 2016, respectively. Business combination Business combinations are recorded using the purchase method of accounting, and the cost of an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any non-controlling interests. The excess of the (i) the total of consideration paid, fair value of the non-controlling interests and acquisition date fair value of any previously held equity interest in the subsidiary acquired over (ii) the fair value of the identifiable net assets of the subsidiary acquired is recorded as goodwill. If the consideration of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the consolidated statements of comprehensive income (loss). Long-lived assets Property and equipment Property and equipment are stated at cost less accumulated depreciation, amortization and impairment, if any. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally from three to four years for computers and equipment and five years for furniture and fixtures. Leasehold improvements are amortized over the shorter of the estimated useful lives of the assets or the remaining lease term. Depreciation expenses were $21.8 million, $19.5 million and $13.3 million for the years ended December 31, 2014, 2015 and 2016, respectively. Goodwill Goodwill represents the excess of the purchase price over the fair value of the identifiable assets and liabilities acquired as a result of the Group’s acquisitions of interests in its subsidiaries and consolidated VIE. The Group assesses goodwill for impairment in accordance with ASC Subtopic 350-20 (“ASC 350-20”), Intangibles - Goodwill and Other: Goodwill, which requires that goodwill be tested for impairment at the reporting unit level at least annually and more frequently upon the occurrence of certain events, as defined by ASC 350-20. US GAAP provides the option to apply the qualitative assessment first and then the quantitative assessment, if necessary, or to apply the quantitative assessment directly. The qualitative approach starts the goodwill impairment test by assessing qualitative factors, which by taking into consideration of macroeconomics, overall financial performance, industry and market conditions and the share price of the Group, to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If so, the quantitative impairment test is performed; otherwise, no further testing is required. The quantitative impairment test consists of a comparison of the fair value of goodwill with its carrying value. For reporting units directly applying a quantitative assessment, the goodwill impairment test is quantitatively performed by comparing the fair values of those reporting units to their carrying amounts. The Group adopted the option to apply the qualitative approach to assess its goodwill on the relevant reporting units. Application of a goodwill impairment test requires significant management judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value of each reporting unit. Judgment in estimating the fair value of reporting units includes estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit. Intangible assets other than goodwill Intangible assets arising from acquisitions are recognized at fair value upon acquisition and amortized on a straight-line basis over their estimated useful lives, generally from two to five years. Long-lived assets and certain identifiable intangible assets other than goodwill to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of any impairment loss for long-lived assets and certain identifiable intangible assets that management expects to hold or use is based on the amount by which the carrying value exceeds the fair value of the asset. Judgment is used in estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these estimates and assumptions could materially affect the determination of the asset’s fair value. Deferred revenues Deferred revenues consist of contractual billings in excess of recognized revenue and payments received in advance of revenue recognition, which are mainly from the customer advance of the advertising and marketing services and the sales of the fee-based services, such as virtual currency or in-game virtual items sold for game related services and VIP membership. Non-controlling interests For the Company’s majority-owned subsidiaries and VIE, non-controlling interests are recognized to reflect the portion of their equity that is not attributable, directly or indirectly, to the Company as the controlling shareholder. To reflect the economic interest held by non-controlling shareholders, net income (loss) attributable to the non-controlling ordinary shareholders is recorded as non-controlling interests in the Company’s consolidated statements of comprehensive income (loss). Non-controlling interests are classified as a separate line item in the equity section of the Company’s consolidated balance sheets and have been separately disclosed in the Company’s consolidated financial statements to distinguish the interests from that of the Company. Foreign currency The Company’s reporting currency and functional currency are the U.S. dollar. The Group’s operations in China and in international regions use their respective currencies as their functional currencies. The financial statements of these subsidiaries are translated into U.S. dollars using period-end rates of exchange for assets and liabilities and average rates of exchange in the period for revenues, costs and expenses. Translation gains and losses are recorded in accumulated other comprehensive income or loss as a component of shareholders’ equity. Translation gains or losses are not released to net income (loss) unless the associated net investment has been sold, liquidated, or substantially liquidated. Foreign currency transactions denominated in currencies other than the functional currency are translated into the functional currency using the exchange rate prevailing on the transactions dates. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency using the applicable exchange rates at the balance sheet dates. Net gains and losses resulting from foreign exchange transactions are included in interest and other income, net. Foreign currency translation adjustments included in the Group’s consolidated statements of comprehensive income (loss) for the years ended December 31, 2014, 2015 and 2016 were loss of $1.5 million, $7.9 million and $18.9 million, respectively. Net foreign currency transaction gains or losses arise from transacting in a currency other than the functional currency of the entity and the amounts recorded were immaterial for each of the periods presented. Net Income (loss) per share Basic net income (loss) per share is computed using the weighted average number of ordinary shares outstanding during the period. Options and RSUs are not considered outstanding in computation of basic earnings per share. Diluted net income (loss) per share is computed using the weighted average number of ordinary shares and potential ordinary shares outstanding during the period under treasury stock method. Potential ordinary shares include options to purchase ordinary shares and RSUs, unless they were anti-dilutive. The computation of diluted net income (loss) per share does not assume conversion, exercise, or contingent issuance of securities that would have an anti-dilutive effect (i.e. an increase in earnings per share amounts or a decrease in loss per share amounts) on net income (loss) per share. The Group uses the two-class method to calculate net income (loss) per share as both classes share the same rights in dividends. Therefore, basic and diluted earnings per share are the same for both classes of ordinary shares. Segment reporting In accordance with ASC 280, Segment Reporting, the Group’s chief operating decision maker (“CODM”), the Chief Executive Officer, reviews the consolidated results when making decisions about allocating resources and assessing performance of the Group as a whole. The Group currently operates and manages its business in two principal business segments globally—advertising and marketing services and other services. Information regarding the business segments provided to the Group’s CODM is at the revenue level and the Group currently does not allocate operating costs or assets to its segments, as its CODM does not use such information to allocate resources or evaluate the performance of the operating segments. As the Group’s long-lived assets are substantially all located in the PRC and substantially the Group’s revenues are derived from within the PRC, no geographical information is presented. Concentration of risks Concentration of credit risk. Financial instruments that potentially subject the Group to a concentration of credit risk consist primarily of cash and cash equivalents, short-term investments and accounts receivable. In addition, with the majority of its operations in China, the Group is subject to RMB currency risk and offshore remittance risk, both of which have been difficult to hedge and the Group has not done so. The Group limits its exposure to credit loss by depositing its cash and cash equivalents with financial institutions in the US, PRC and Hong Kong, which are among the largest and most respected with high ratings from internationally-recognized rating agencies, that management believes are of high credit quality. The Group periodically reviews these institutions’ reputations, track records and reported reserves. As of December 31, 2015 and 2016, the Group had $334.6 million and $393.6 million, respectively, in cash and bank time deposits (with terms generally up to twelve months) with large domestic banks in China. China promulgated a Bankruptcy Law that came into effect on June 1, 2007, which contains a separate article expressly stating that the State Council may promulgate implementation measures for the bankruptcy of Chinese banks based on the Bankruptcy Law. Under the Bankruptcy Law, a Chinese bank may go bankrupt. In addition, since China’s concession to WTO, foreign banks have been gradually permitted to operate in China and have become significant competitors to Chinese banks in many aspects, especially since the opening of RMB business to foreign banks in late 2006. Therefore, the risk of bankruptcy on Chinese banks in which the Group holds cash and bank deposi |
Investment by Alibaba
Investment by Alibaba | 12 Months Ended |
Dec. 31, 2016 | |
Investment by Alibaba | |
Investment by Alibaba | 3. Investment by Alibaba On April 29, 2013 (“Transaction Date”), Alibaba Group Holding Limited (“Alibaba”) through its wholly owned subsidiary invested $585.8 million to purchase equity shares of the Company, representing an ownership interest of 18% on a fully diluted basis. The Company also granted an option to Alibaba to enable it to purchase additional equity shares and increase its ownership in Weibo up to 30% on a fully-diluted basis. The call option was to expire immediately upon the earlier of the consummation of (i) any sale of shares by Alibaba of more than 25%, determined in the aggregate with all prior sales, of the acquired shares and (ii) the full exercise of the call option. Alibaba had the right to exercise the option, in whole or in part, at any time, commencing on the Transaction Date and ending on the consummation of a qualified IPO of Weibo. The exercise price of the option was equal to the lower of (i) an amount that represents a 15% discount to the IPO offering price per ordinary share in a qualified IPO offering and (ii) a price per ordinary share that implies an equity valuation (exclusive of the purchase price to be paid by Alibaba for these ordinary shares) of $5.5 billion for the Company on a fully diluted basis. In accordance with ASC Subtopic 815-10, the option was deemed legally detachable and separately exercisable from the preferred and ordinary shares and, thus, accounted for as a freestanding instrument. As the strike price of the call option may be adjusted by the occurrence of a qualified IPO of Weibo, if any, it is not considered indexed to Weibo’s own stock. Accordingly, the call option was recorded as an investor option liability and for the year ended December 31, 2014, $47.0 million of losses was recognized based on a subsequent change in fair value in the Group’s consolidated statements of comprehensive income (loss). Alibaba fully exercised its option to increase its ownership in the Company to 30% on a fully diluted basis upon the IPO and acquired 29,990,778 Class A ordinary shares, which consists of (i) 21,067,300 shares acquired from SINA at a price that represents a 15% discount to the IPO price of the Company, (ii) 2,923,478 shares acquired from the Company at a price that represents a 15% discount to the IPO price through a concurrent private placement and (iii) 6,000,000 shares purchased from the Company at the IPO price. As part of a series of the transaction, the Company repurchased 2,923,478 ordinary shares from SINA with the US$42.2 million proceeds from the issuance of ordinary shares to Alibaba in the concurrent private placement. Among the acquired shares by Alibaba, 23,990,778 shares were purchased from SINA at a price representing 15% discount to its IPO price and 6,000,000 shares were purchased from the Company in the public offering at the IPO price. The discount of US$ 61.2 million borne by SINA on behalf of Weibo were considered as a deemed contribution from the shareholder. As Alibaba’s decision to waive the discount for the newly issued 6,000,000 Class A ordinary shares was motivated by its position as principle shareholder, the discount of US$15.3 million was also considered as a deemed contribution from the shareholder. |
Cash, Cash Equivalents and Shor
Cash, Cash Equivalents and Short-term Investments | 12 Months Ended |
Dec. 31, 2016 | |
Cash, Cash Equivalents and Short-term Investments | |
Cash, Cash Equivalents and Short-term Investments | 4. Cash, Cash Equivalents and Short-term Investments Cash, cash equivalents and short-term investments consist of the following: As of December 31, 2015 2016 (In thousands) Cash and cash equivalents: Cash $ $ Cash equivalents: Bank time deposits — Short-term investments: Bank time deposits Total cash, cash equivalents and short-term investments $ $ The carrying amounts of cash, cash equivalents and short-term investments approximate fair value. Interest income was $8.3 million, $5.5 million and $7.6 million for the year ended December 31, 2014, 2015 and 2016, respectively. The maturity dates for the time deposits were within one year. |
Long-term Investments
Long-term Investments | 12 Months Ended |
Dec. 31, 2016 | |
Long-term Investments | |
Long-term Investments | 5. Long-term Investments Long-term investments comprised of investments in privately held and publicly traded companies. The following sets forth the changes in the Group’s long-term investments: Cost Method Equity Method Available-for-Sale Total (In thousands) Balance at December 31, 2013 $ $ — $ — $ Investments made Loss from equity method investment — ) — ) Impairment on investments ) — — ) Transfer from long-term investments to a wholly owned subsidiary ) — — ) Unrealized loss — — ) ) Currency translation adjustment ) — ) Balance at December 31, 2014 $ $ $ $ Investments made — — Loss from equity method investment — ) — ) Disposal of investments ) — — ) Impairment on investments ) — — ) Unrealized loss — — ) ) Currency translation adjustment ) ) — ) Balance at December 31, 2015 $ $ $ $ Investments made — Loss from equity method investment — ) — ) Disposal of investments ) — ) ) Impairment on investments ) — — ) Unrealized loss — — ) ) Currency translation adjustment ) ) — ) Balance at December 31, 2016 $ $ $ $ As of December 31, 2015 and 2016, investments accounted for under the cost method were $281.7 and $390.3 million, respectively. Investments were accounted for under the cost method if the Group had no significant influence or if the underlying shares were not considered in substance ordinary shares and had no readily determinable fair value. For the year ended December 31, 2016, the Group made investments in private high tech companies totaling $152.1 million, which were accounted for under the cost method or equity method. These investments were made, in general to expand and strengthen the Group’s ecosystem and included a follow-on investment of $120.0 million in Yixia Tech Co Ltd (“Yixia”), a developer of mobile video apps, making the aggregate investment in Yixia $190 million, and $14.4 million in a company offering online literature services. Investments in marketable securities are held as available-for-sale and reported at fair value due to changes in quoted market price. The Group made a $15.1 million investment in 2014 and accounted for it as an AFS investment. In 2016, the Group disposed part of the investment and recognized an impairment charge of $4.8 million to net income, based on the severity and duration of the decline from the carrying value. As of December 31, 2015 and 2016, the fair value of the AFS investment was $12.8 million and $5.3 million, respectively. The Group performs an impairment assessment on its investments and determines whether investment impairment, if any, is other-than-temporary based on changes in quoted market price or other impairment indicators. The Group recorded impairment charges of $2.5 million, $8.0 million, and $40.2 million on the carrying value of its long-term investments and prepayment for the years ended December 31, 2014, 2015 and 2016, respectively, as a result of the investments not performing to expectation or them becoming incapable of making repayment. The investment impairment in 2016 included a $19.0 million write-off on an online-to-offline business and a $10.5 million write-off on an employment-oriented social company. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2016 | |
Acquisitions | |
Acquisitions | 6. Acquisitions In October 2014, the Group paid a consideration of $3.1 million to acquire an 84% equity interest in Shanghai Gametree Information Technology Co. Ltd,. (“Gametree”), a game developer and began consolidating its financial results on October 1, 2014. The Group hired an independent valuation firm to assist management in valuing the equity interest acquired by the Group. Goodwill arising from this transaction primarily represents the expected synergies from combining the operations of game developer with the Group, which are complementary to each other. Total identifiable intangible assets acquired upon acquisition were the existing game technology amounting to $1.7 million, which have an estimated useful life of approximately 4.3 years. The acquired business is not material to the Group’s financial statements and, thus, a presentation of pro-forma financial information for the business combination is not required. Consideration for the purchase was allocated on the acquisition date based on the fair value of the assets acquired and the liabilities assumed as follows: As of acquisition date (In thousands) Cash consideration $ Non-controlling interests Total consideration Tangible assets Identifiable intangible assets acquired Liabilities assumed ) Goodwill Total consideration $ On June 30, 2015, the Group acquired a 55% and 85% equity interest in two investment funds (“Weibo funds”) for a total cash consideration of $22.0 million from SINA. The Weibo funds engage in investing in high-tech startups related to the Weibo business. The Group engaged an independent valuation firm to assist management in its valuation of the purchase price allocation. Since Weibo and the Weibo Funds were controlled by SINA before and after the acquisition, the transaction was accounted for as a business combination between entities under common control. In accordance with ASC Subtopic 805-50, the Group’s consolidated financial statements included the acquired assets and liabilities of the Weibo Funds at their historical carrying amounts and were prepared as if the current corporate structure had been in place throughout the periods presented. The following sets forth the changes in the Group’s goodwill by segment: Advertising & Other Total (In thousands) Balance as of December 31, 2014 $ — $ $ Currency translation adjustment — ) ) Balance as of December 31, 2015 $ — $ $ Currency translation adjustment — ) ) Balance as of December 31, 2016 $ — $ $ As of December 31, 2016, the Group performed a qualitative analysis on the goodwill arising from the acquisition taking into consideration the events and circumstances listed in ASC350 Intangibles—Goodwill and Other , including consideration of macroeconomic factors, industry and market conditions, share price of the Group, and overall financial performance, in addition to other entity-specific factors. Based on the analysis, the Group decided to perform a quantitative assessment of the business unit to which goodwill belonged as of December 31, 2016. The Group engaged an independent valuation firm to assist management in its assessment of goodwill impairment, which used the income approach along with assumptions on future growth rates and discount rate. Based on the valuation results, the fair value of the business unit was above its carrying amount as of December 31, 2016. Therefore, management concluded that there was no impairment of goodwill as of December 31, 2016. As of December 31, 2016, the Group’s intangible assets totaled $1.1 million, mainly consisted of acquired game-related platform technology and a non-compete agreement. The amortization expense for the years ended December 31, 2014, 2015 and 2016 was $1.2 million, $1.5 million and $0.7 million, respectively. As of December 31, 2016, estimated amortization expenses for future periods are expected as follows: Year Ended December 31, (In thousands) 2017 $ 2018 2019 and thereafter — Total expected amortization expense $ |
Stock-Based Compensation
Stock-Based Compensation | 12 Months Ended |
Dec. 31, 2016 | |
Stock-Based Compensation | |
Stock-Based Compensation | 7. Stock-Based Compensation In August 2010, the Company adopted the 2010 Share Incentive Plan (the “2010 Plan”), which has a term of ten years and permits the grant of options, share appreciation rights, restricted shares and restricted share units of the Company to employees, directors and consultants of the Company and its affiliates. Under the plan, a total of 35 million ordinary shares were initially reserved for issuance. The maximum number of ordinary shares available for issuance will be reduced by one share for every one share issued pursuant to a share option or share appreciation right and by 1.75 share for every one share issued as restricted shares or pursuant to a restricted shares unit. In March 2014, the 2010 Plan was terminated and all remaining shares were forwarded to the 2014 Plan. In March 2014, the Company adopted the 2014 Share Incentive Plan (the “2014 Plan”), which was funded by the remaining 4.6 million shares from the 2010 Plan plus an additional 1.0 million shares. On January 1, 2015, shares in the 2014 Plan, which have a term life of ten years, were allowed a one-time increase in the amount equal to 10% of the total number of Weibo shares issued and outstanding on a fully-diluted basis as of December 31, 2014. Each share in the 2014 Plan pool allows for a grant of a restricted share unit or option share. The Company intends to use such share incentive plan to attract and retain employee talent. The following table sets forth the stock-based compensation included in each of the relevant accounts: Year Ended December 31, 2014 2015 2016 (In thousands) Cost of revenues $ $ $ Sales and marketing Product development General and administrative $ $ $ Stock based compensation related to the grants were amortized generally over four years on a straight-line basis with $13.8 million, $26.4 million and $36.9 million expensed for the years ended December 31, 2014, 2015 and 2016, respectively. The following table sets forth a summary of the number of shares available for issuance: Shares Available (In thousands) December 31, 2013 Addition Granted* ) Cancelled/expired/forfeited December 31, 2014 Addition Granted* ) Cancelled/expired/forfeited December 31, 2015 Addition — Granted* ) Cancelled/expired/forfeited December 31, 2016 * In 2014, 3.0 million restricted share units and no options were granted under the 2014 Plan. In 2015, 4.9 million restricted share units and no options were granted under the 2014 Plan. In 2016, 1.9 million restricted share units and no options were granted under the 2014 Plan. Stock Options The following table sets forth a summary of option activities under the Company’s stock option program: Options Weighted Average Weighted Average Aggregate (In thousands) (In years) (In thousands) December 31, 2013 $ $ Granted — $ — Exercise ) $ Cancelled/expired/forfeited ) $ Repurchased — $ — December 31, 2014 $ $ Granted — $ — Exercise ) $ Cancelled/expired/forfeited ) $ Repurchased — $ — December 31, 2015 $ $ Granted — $ — Exercise ) $ Cancelled/expired/forfeited ) $ Repurchased — $ — December 31, 2016 $ $ Vested and expected to vest as of December 31, 2015 $ $ Exercisable as of December 31, 2015 $ $ Vested and expected to vest as of December 31, 2016 $ $ Exercisable as of December 31, 2016 $ $ The total intrinsic value of options exercised for the years ended December 31, 2014, 2015 and 2016 was $65.7 million, $106.2 million and $129.3 million, respectively. The intrinsic value is calculated as the difference between the market value on the date of exercise and the exercise price of the shares. As reported by the NASDAQ Global Selected Market, the Company’s ending stock price as of December 31, 2014, 2015 and 2016 was $14.24, $19.50 and $40.60, respectively. Cash received from the exercise of stock option during the years ended December 31, 2014, 2015 and 2016 was $1.5 million, $7.8 million and $4.2 million, respectively. As of December 31, 2015 and 2016, unrecognized compensation cost, adjusted for estimated forfeitures, related to non-vested stock options granted to the Group’s employees and directors was $3.9 million and $1.1 million, respectively. Total unrecognized compensation cost is expected to be recognized over a weighted-average period of 0.8 years and may be adjusted for future changes in estimated forfeitures. Information regarding stock options outstanding is summarized below: Range of Exercise Prices Options Weighted Options Weighted Weighted Average (In thousands) (In thousands) (In years) As of December 31, 2015 $0.36 - $0.41 $ $ $0.96 - $1.80 $ $ $3.25 - $3.36 $ $ $3.43 - $3.50 $ $ $ $ As of December 31, 2016 $0.36 - $0.41 $ $ $0.96 - $1.80 $ $ $3.25 - $3.36 $ $ $3.43 - $3.50 $ $ $ $ Restricted Share Units Summary of Performance-Based Restricted Share Units The following table sets forth a summary of performance-based restricted share unit activities: Shares Granted Weighted-Average (In thousands) December 31, 2015 — $ — Awarded $ Cancelled ) $ December 31, 2016 $ As of December 31, 2016, there was $0.3 million unrecognized compensation cost, adjusted for estimated forfeitures, related to performance-based restricted share units granted to the Company’s employees. No performance-based RSUs were granted in 2015. Summary of Service-Based Restricted Share Units The following table sets forth a summary of service-based restricted share unit activities: Shares Weighted- (In December 31, 2013 $ Awarded $ Vested ) $ Cancelled ) $ December 31, 2014 $ Awarded $ Vested ) $ Cancelled ) $ December 31, 2015 $ Awarded $ Vested ) $ Cancelled ) $ December 31, 2016 $ As of December 31, 2016, unrecognized compensation cost, adjusted for estimated forfeitures and related to non-vested, service-based restricted share units granted to the Company’s employees and directors, was $76.8 million. This cost is expected to be recognized over a weighted-average period of 2.8 years. The total fair value based on the vesting date of the restricted share units vested was $2.7 million, $17.8million and $33.5 million for the years ended December 31, 2014, 2015 and 2016, respectively. |
Other Balance Sheet Components
Other Balance Sheet Components | 12 Months Ended |
Dec. 31, 2016 | |
Other Balance Sheet Components | |
Other Balance Sheet Components | 8. Other Balance Sheet Components As of December 31, 2014 2015 2016 (In thousands) Accounts receivable, net: Due from third parties $ $ Due from Alibaba Due from other related parties Total gross amount $ $ Allowance for doubtful accounts: Balance at the beginning of the year ) ) ) Reversal (additional provision) charged to expenses, net ) ) Write-off Balance at the end of the year ) ) ) $ $ Prepaid expenses and other current assets: Rental and other deposits $ $ Prepayment for investments Advertising prepayment Prepayment to outsourced service providers Amounts deposited by users* — Others $ $ Property and equipment, net: Computers and equipment $ $ Leasehold improvements Furniture and fixtures Others Property and equipment, gross Less: Accumulated depreciation ) ) $ $ Accrued and other liabilities**: Payroll and welfare $ $ Marketing expenses Payroll withholding taxes Sales rebates Professional fees VAT and other tax payable Payable to other service providers Amounts due to users* — Others $ $ * Weibo wallet enables users to conduct interest-generation activities on Weibo, such as handing out “red envelops” and coupons to users and purchase different types of products and services on Weibo, including those offered by the Group, such as marketing services and VIP membership, and those offered by Weibo’s platform partners, such as e-commerce merchandises, financial products and virtual gifts. Amounts deposited by users primarily represent the receivables temporarily held in Weibo’s account on a third party online payment platform for Weibo wallet users. Amounts due to users represent the balances that are payable on demand to Weibo wallet users and therefore are reflected as current liability on the consolidated balance sheets. ** Include amounts due to third parties, employees, related parties and Weibo wallet users. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Income Taxes | 9. Income Taxes The Company is registered in the Cayman Islands and mainly operates in two taxable jurisdictions—the PRC and Hong Kong. The Group’s income (loss) before income taxes is as follows: Year Ended December 31, 2014 2015 2016 (In thousands, except percentage) Income (Loss) before income tax expenses $ ) $ $ Loss from non-China operations $ ) $ ) $ ) Income (Loss) from China operations $ ) $ $ Income tax expense applicable to China operations $ $ $ Effective tax rate for China operations )% % % The Company generated the majority of its operating income (loss) from PRC operations and has recorded income tax provision for the periods presented. Income tax liability is calculated based on a separate return basis, as if the Group had filed separate tax returns before the Reorganization. Stock-based compensation was recorded in the Company’s loss from non-China operations. Loss from non-China operations in 2014 included a loss of $47.0 million from the change in fair value of investor option liability and in 2016 included a loss of $23.8 million from investment impairments. Cayman Islands Under the current tax laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. In addition, upon payments of dividends by the Company to its shareholders, no Cayman Islands withholding tax is required. Hong Kong Weibo HK is subject to taxes in Hong Kong at 16.5% for all the periods presented. As of December 31, 2016, the Company’s Hong Kong subsidiary had a net operating loss of $1.4 million, which can be carried forward indefinitely to offset future taxable income. Also as of December 31, 2016, deferred tax assets of Weibo HK consists mainly of net operating loss carried forward, for which a full valuation allowance was provided. Management believes it is more likely than not that these assets will not be realized in the future. China Effective January 1, 2008, the Enterprise Income Tax Law (the “EIT Law”) in China unifies the enterprise income tax rate for the entities incorporated in China at 25%, unless they are eligible for preferential tax treatment. On February 22, 2008, relevant governmental regulatory authorities released the qualification criteria, application procedures and assessment processes for “software enterprise,” which can enjoy an income tax exemption for two years beginning with its first profitable year and a 50% tax reduction, at a rate of 12.5% for the subsequent three years. The Group’s WFOE qualifies as a software enterprise and, thus, enjoyed an income tax exemption in 2015 and 2016, as the WFOE was profitable in both years. The EIT Law also provides that an enterprise established under the laws of a foreign country or region but whose “de facto management body” is located in the PRC be treated as a resident enterprise for PRC tax purposes and consequently be subject to the PRC income tax at the rate of 25% for its global income. The Implementing Rules of the EIT Law merely define the location of the “de facto management body” as “the place where the exercising, in substance, of the overall management and control of the production and business operation, personnel, accounting, properties, etc., of a non-PRC company is located.” Based on a review of surrounding facts and circumstances, the Group does not believe that it is likely that its operations outside of the PRC be considered a resident enterprise for PRC tax purposes. However, due to limited guidance and implementation history of the EIT Law, should Weibo be treated as a resident enterprise for PRC tax purposes, the Company will be subject to PRC tax on worldwide income at a uniform tax rate of 25% retroactive to January 1, 2008. The EIT Law also imposes a withholding income tax rate of 10% on dividends distributed by a WFOE to its immediate holding company outside of China, if such immediate holding company is considered as a non-resident enterprise without any establishment or place within China or if the received dividends have no connection with the establishment or place of such immediate holding company within China, unless such immediate holding company’s jurisdiction of incorporation has a tax treaty with China that provides for a different withholding arrangement. The Cayman Islands, where the Company incorporated, does not have such tax treaty with China. According to the arrangement between Mainland China and Hong Kong Special Administrative Region on the Avoidance of Double Taxation and Prevention of Fiscal Evasion in August 2006, dividends paid by a WFOE in China to its immediate holding company in Hong Kong will be subject to withholding tax at a rate of no more than 5% (if the foreign investor owns directly at least 25% of the shares of the WFOE). The State Administration of Taxation further promulgated Circular 601 on October 27, 2009, which provides that tax treaty benefits will be denied to “conduit” or shell companies without business substance and that a beneficial ownership analysis will be used based on a “substance-over-form” principle to determine whether or not to grant the tax treaty benefits. The operations of the Group’s WFOE in China is invested and held by Weibo HK. If the Company is regarded as a non-resident enterprise and Weibo HK is regarded as a resident enterprise, then Weibo HK may be required to pay a 10% withholding tax on any dividends payable to the Company. If Weibo HK is regarded as a non-resident enterprise, then Weibo Technology may be required to pay a 5% withholding tax for any dividends payable to Weibo HK. However, it is still unclear at this stage whether Circular 601 applies to dividends from Weibo Technology paid to Weibo HK. If Weibo HK were not considered as “beneficial owners” of any dividends from Weibo Technology, the dividends payable to Weibo HK would be subject to a withholding tax of 10%. In accordance with accounting guidance, all undistributed earnings are presumed to be transferred to Weibo Corporation and are subject to the withholding taxes. The current policy approved by the Company’s board of directors allows the Group to distribute PRC earnings offshore only if the Group does not have to pay a dividend tax. As of December 31, 2016, the Group did not record any withholding tax for its PRC subsidiaries. Composition of income tax expenses for China operations The following table sets forth current and deferred portion of income tax expenses (benefits) of the Company’s China subsidiaries, VIE and VIE’s subsidiaries: Years Ended December 31, 2014 2015 2016 (In thousands) Deferred tax expenses (benefits) $ $ ) $ ) Current income tax expenses Income tax expenses $ $ $ Reconciliation of the statutory tax rate to the effective tax rate for China operations The following table sets forth reconciliation between the statutory EIT rate and the effective tax rate for China operations: Year Ended December 31, 2014 2015 2016 Statutory EIT rate % % % Effect on tax holiday — ) % )% Permanent differences % % % Change in valuation allowance )% % % Effective tax rate for China operations )% % % The provision for income taxes for the years ended December 31, 2014, 2015 and 2016 differs from the amounts computed by applying the statutory EIT rate primarily due to the utilization of the net operating loss of Weimeng, as it was in a profitable position in 2014, and the tax exemption of the WFOE, Weibo Technology, as a qualified software enterprise in 2015 and 2016. For the years ended December 31, 2015 and 2016, Weibo Technology was tax exempted for $15.7 million and $50.4 million, which resulted in an effect of $0.08 and $0.23, respectively, on basic net income per share. Deferred tax assets and liabilities The following table sets forth the significant components of deferred tax assets and liabilities for the Group: As of December 31, 2015 2016 (In thousands) Deferred tax assets: Net operating loss carry forwards $ $ Less: valuation allowance ) ) Depreciation, accounts receivable, accrued and other liabilities Less: valuation allowance ) ) Net deferred tax assets $ $ Deferred tax liabilities: Acquired intangible assets $ $ Depreciation Others Total deferred tax liabilities $ $ Valuation allowance is provided against deferred tax assets when the Group determines that it is more likely than not that the deferred tax assets will not be utilized in the future. In making such determination, the Group considered factors including (i) future reversals of existing taxable temporary differences; (ii) future taxable income exclusive of reversing temporary differences and carry forwards; and (iii) tax planning strategies. The valuation allowance on deferred tax assets as of December 31, 2015 and 2016 was $44.7 million and $40.7 million, respectively. The change in valuation allowance was primarily due to bad debt expenses and investment impairment charges, as well as the expiration of net operating loss carry forward. Historically, deferred tax assets were valued using the statutory rate of 25%. As of December 31, 2015 and 2016, the Group had net operating loss carry forwards totaling $160.5 million and 129.3 million, respectively, for which full valuation allowance was provided. As of December 31, 2016, the net operating loss carry forwards will expire, if unused, in the year ending December 31, 2020 through December 31, 2021. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions | |
Related Party Transactions | 10. Related Party Transactions The following sets forth significant related parties and their relationships with the Company: Company Name Relationship with the Company SINA Parent and affiliates under common control. Alibaba Strategic partner and significant shareholder of the Company. The following sets forth significant related party transactions with the Company: Year Ended December 31, 2014 2015 2016 (In thousands) Transactions with SINA Revenue billed through SINA(1) $ $ $ Deemed contribution from SINA(2) $ $ — $ — Legal transfer of Weibo Funds and recognition of due to SINA(3) $ $ — $ — Costs and expenses allocated from SINA(4) $ $ $ Interest expense on amount due to SINA $ $ — $ — Repayment of amount due to SINA(5) $ $ $ — (1) For the years ended December 31, 2014, 2015 and 2016, the Group billed $4.1 million, $22.1 million and $39.3 million, respectively, to third parties through SINA. (2) The $61.2 million in deemed contribution from SINA represents the discount borne by SINA upon the settlement of investor options in 2014(see Note 3). (3) The $22.6 million relates to the amount paid by SINA for the Weibo Funds in 2014. (see Note1). (4) Costs and expenses allocated from SINA represented the charges for certain services provided by SINA’s affiliates and charged to the Company using actual cost allocation based on proportional utilization (see Note 1). In addition to the allocated costs and expenses, SINA also billed $15.1million, $29.4 million, and $20.3 million for other costs and expenses associated with Weibo’s business in 2014, 2015, and 2016, respectively. (5) For the year ended December 31, 2014, the Company repaid approximately $276.6 million for a loan and related interests to SINA. Year Ended December 31, 2014 2015 2016 (In thousands) Transactions with Alibaba Advertising and marketing services provided to Alibaba $ $ $ Deemed contribution from Alibaba(6) $ $ — $ — Services provided by Alibaba $ $ $ (6) The $15.3 million represents the discount borne by Alibaba upon the settlement of investor options in 2014. (see Note 3) On April 29, 2013, affiliated entities of SINA, including the Group’s subsidiary, entered into a strategic collaboration with affiliated entities of Alibaba to jointly explore social commerce and develop marketing solutions to enable merchants on Alibaba e-commerce platforms to better connect and build relationships with Weibo users. The strategic collaboration was entered into on a separate agreement from those relating to the investment in Weibo by Alibaba. For the years ended December 31, 2014 and 2015, the Group recorded advertising and marketing services revenue under the strategic collaboration with Alibaba amounting to $107.6 million and $137.4 million, respectively. The Group has continued to work with Alibaba in the area of social commerce and other areas after the expiration of the strategic collaboration agreement in January 2016. For the year ended December 31, 2016, the Group recorded $57.9 million in advertising and marketing services from Alibaba. The following sets forth related party outstanding balance: As of December 31, 2015 2016 (In thousands) Amount due from SINA(7) $ — $ Amount due to SINA (7) $ $ — Accounts receivable due from Alibaba $ $ (7) The Group uses amount due from/to SINA to settle balances arising from cost and expenses allocated from SINA based on proportional utilization, other expenditures associated with the Weibo business paid by SINA and third-party customer and supplier balances settled through SINA. For the years ended December 31, 2014, 2015 and 2016, advertising and marketing revenues generated from other related parties were $27.6 million, $29.2 million and $45.6 million, respectively, and other revenues from other related parties were $1.5 million, $2.1 million and $0.6 million, respectively. For the years ended December 31, 2014, 2015 and 2016, the Group received promotional services from other related parties amounting to approximately $11.2 million, $7.8 million and $10.6 million, respectively. As of December 31, 2015 and 2016, amount due from other related parties was $33.9 million and $30.1 million, respectively, and accrued and other liabilities due to other related parties were $8.0 million and $9.3 million, respectively. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2016 | |
Employee Benefit Plans | |
Employee Benefit Plans | 11. Employee Benefit Plans China Contribution Plan The Company’s subsidiaries, VIE and VIE’s subsidiaries in China participate in a government-mandated, multi-employer, defined contribution plan, pursuant to which certain retirement, medical, housing and other welfare benefits are provided to employees. Chinese labor laws require the entities incorporated in China to pay to the local labor and welfare authorities a monthly contribution at a stated contribution rate based on the monthly basic compensation of qualified employees. The local labor bureau is responsible for meeting all retirement benefit obligations. The Group has no further commitments beyond its monthly contribution. For the years ended December 31, 2014, 2015 and 2016, the Group’s total contribution was $27.2 million, $29.7 million and $31.4 million, respectively. |
Net Income (Loss) Per Share
Net Income (Loss) Per Share | 12 Months Ended |
Dec. 31, 2016 | |
Net Income (Loss) Per Share | |
Net Income (Loss) Per Share | 12. Net Income (Loss) Per Share Basic net income (loss) per share is computed using the weighted average number of the ordinary shares outstanding during the period. Options, RSUs and preferred shares are not considered outstanding in the computation of basic earnings per share (“EPS”). Diluted EPS is computed using the weighted average number of ordinary shares and potential ordinary shares outstanding during the period under the treasury stock method. For the year ended December 31, 2014, options to purchase ordinary shares and RSUs that were anti-dilutive and excluded from the calculation of diluted net loss per share were 17.8 million. For the years ended December 31, 2015 and 2016, options to purchase ordinary shares and RSUs of 9.8 million and 8.1 million, respectively, were recognized as dilutive factors and included in the calculation of diluted net income per share. For the years ended December 31, 2014, 2015 and 2016, no preferred shares were included in the calculation of diluted net income (loss) per share of the Group, as all preferred shares converted into ordinary shares during the Group’s IPO in April 2014. The following table sets forth the computation of basic and diluted net income (loss) per share for the periods indicated: Year Ended December 31, 2014 2015 2016 (In thousands, except per share data) Basic net income (loss) per share calculation: Numerator: Net income (loss) attributable to Weibo $ ) $ $ Denominator: Weighted average ordinary shares outstanding Basic net income (loss) per share attributable to Weibo $ ) $ $ Diluted net income (loss) per share calculation: Numerator: Net income (loss) attributable for calculating diluted net income (loss) per share $ ) $ $ Denominator: Weighted average ordinary shares outstanding Weighted average ordinary shares equivalents: Effects of dilutive securities Stock options — Unvested restricted share units — Shares used in computing diluted net income (loss) per share attributable to Weibo Diluted net income (loss) per share attributable to Weibo $ ) $ $ |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2016 | |
Segment Information | |
Segment Information | 13. Segment Information The Group currently operates and manages its business in two principal business segments globally—advertising and marketing services and other services. Information regarding the business segments provided to the Group’s chief operating decision makers (“CODM”), its Chief Executive Officer, is at the revenue level and the Group currently does not allocate operating costs or assets to its segments, as its CODM does not use such information to allocate resources or evaluate the performance of the operating segments. As substantially all of the Group’s revenues are derived from within the PRC and substantially all of the Group’s long-lived assets are located within the PRC, no geographical information is presented. The following is a summary of the Group’s revenues: Revenues Advertising & Marketing Other Total (In thousand) Year ended December 31, 2014 $ $ $ Year ended December 31, 2015 $ $ $ Year ended December 31, 2016 $ $ $ |
Profit Appropriation and Restri
Profit Appropriation and Restricted Net Assets | 12 Months Ended |
Dec. 31, 2016 | |
Profit Appropriation and Restricted Net Assets | |
Profit Appropriation and Restricted Net Assets | 14. Profit Appropriation and Restricted Net Assets The Company’s subsidiaries, VIE and VIE’s subsidiaries in China are required to make appropriations to certain non-distributable reserve funds. In accordance with the laws applicable to China’s WFOE, its subsidiaries have to make appropriations from their after-tax profit (as determined under Generally Accepted Accounting Principles in the PRC (“PRC GAAP”) to non-distributable reserve funds including (i) general reserve fund, (ii) enterprise expansion fund and (iii) staff bonus and welfare fund. General reserve fund is at least 10% of the after-tax profits calculated in accordance with the PRC GAAP. Appropriation is not required if the reserve fund has reached 50% of the registered capital of the respective company. The appropriation of the other two reserve funds is at the Group’s discretion. At the same time, the Company’s VIE, in accordance with the China Company Laws, must make appropriations from their after-tax profit (as determined under the PRC GAAP) to non-distributable reserve funds including (i) statutory surplus fund, and (ii) discretionary surplus fund. Statutory surplus fund is at least 10% of the after-tax profits calculated in accordance with the PRC GAAP. Appropriation is not required if the reserve fund has reached 50% of the registered capital of the respective company. General reserve fund and statutory surplus fund are restricted for set off against losses, expansion of production and operation or increase in registered capital of the respective company. These reserves are not transferable to the Company in the form of cash dividends, loans or advances. These reserves are therefore not available for distribution except in liquidation. As of December 31, 2015 and 2016, the Group accrued approximately $7.1 million and $28.0 million in the reserve fund, as Weimeng and Weibo Technology were both profitable in 2015 and 2016. Under the PRC laws and regulations, the subsidiaries, VIE and VIE’s subsidiaries incorporated in the PRC are restricted in their ability to transfer a portion of their net assets to the Group either in the form of dividends, loans or advances of the consolidated net assets. Even though the Group currently does not require any such dividends, loans or advances from the PRC subsidiaries and VIE for working capital and other funding purposes, the Group may in the future require additional cash resources from the PRC subsidiaries, VIE and VIE’s subsidiaries due to changes in business conditions, to fund future acquisitions and development, or merely declare and pay dividends to or distribution to its shareholders. Net assets subject to restriction for the Group amounted to $231.5 million, or 31% of the Group’s total consolidated net assets as of December 31, 2016. |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2016 | |
Financial Instruments | |
Financial Instruments | 15. Financial Instruments Fair Value The following table sets forth the financial instruments measured at fair value by level within the fair value hierarchy as of December 31, 2015 and 2016: Fair Value Measurements (in thousands) Total Quoted Prices in Significant Other Significant As of December 31, 2015: Bank time deposits* $ $ — $ $ — Available-for-sale securities** — — Total $ $ $ $ — As of December 31, 2016: Bank time deposits* $ $ — $ $ — Available-for-sale securities** — — Total $ $ $ $ — * Included in cash and cash equivalents and short-term investments on the Group’s consolidated balance sheets. ** Included in long-term investments on the Group’s consolidated balance sheets. Recurring The Group measures bank time deposits, available-for-sale securities and investor option liability at fair value on a recurring basis. The fair value of the Group’s available-for-sale securities are determined based on the quoted market price (Level 1). The fair value of the Group’s bank time deposits are determined based on the quoted market price for similar products (Level 2). The investor option liability, which enables Alibaba to purchase additional ordinary shares and increase its ownership in Weibo up to 30% on a fully-diluted basis (see Note 1 Reorganization ), is measured using significant unobservable inputs (Level 3) when determining its fair value. The Group reviews its available-for-sale investments regularly to determine if an investment is other-than-temporarily impaired due to changes in quoted market price or other impairment indicators. For the years ended December 31, 2014, 2015 and 2016, impairment related to available-for-sale securities was nil, nil and $4.8 million, respectively (see Note 5 for further information). Immediately prior to Alibaba’s exercise of the option, the fair value of investor option liability was $76.5 million. The option was fully exercised by Alibaba upon the Group’s IPO in April 2014. For the year ended December 31, 2014, a $47.0 million loss was recognized as subsequent change in fair value when marked to market in the Group’s consolidated statements of comprehensive income (loss). Non-recurring The Group measures certain financial assets, including investments under the cost method and equity method, at fair value on a non-recurring basis only if an impairment charge is recognized. The fair value of the Group’s privately held investments are determined using the income approach with unobservable inputs, such as the investee company’s historical financial results and assumptions about future growth rates, which require significant judgment to determine, and the market approach based on market participants’ price quote for the investment. As of December 31, 2015 and 2016, certain privately held investments under the cost method and equity method were measured using significant unobservable inputs (Level 3) and written down from their respective carrying value to a fair value of nil, with impairment charges incurred and recorded in earnings for the year then ended. The impairment charges related to these investments were $2.5 million, $8.0 million and $35.4 million for the years ended December 31, 2014, 2015 and 2016, respectively, (see Note 5 for further information). The fair value of the privately held investments was measured based on discounted cash flow with unobservable inputs including the discount curve of market interest rates, which ranged from 20% to 22%. The Group’s non-financial assets, such as intangible assets, goodwill and fixed assets, are measured at fair value only if they were determined to be impaired. In accordance with the Group policy to perform an impairment assessment of its goodwill on an annual basis as of the balance sheet date or when facts and circumstances warrant a review, the Group performed an impairment assessment on its goodwill by reporting unit annually. The Group concluded that no write-down was warranted for the years ended December 31, 2014, 2015 and 2016, respectively. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies | |
Commitments and Contingencies | 16. Commitments and Contingencies Operating lease commitments include the commitments under the lease agreements for the Group’s office premises. The Group leases its office facilities under non-cancelable operating leases with various expiration dates through 2018. For the year ended December 31, 2014, 2015 and 2016, lease expense was $14.9 million, $15.5 million and $14.4 million, respectively. Based on the current rental lease agreements, future minimum lease payments required as of December 31, 2016 was as follows: Operating lease commitments Total Less than One One to Three to More than (In thousands) As of December 31, 2016: $ $ $ $ $ — Purchase commitments mainly include minimum commitments for internet connection and marketing activities. Purchase commitments as of December 31, 2016 was as follows: Purchase commitments Total Less than One One to Three to More than (In thousands) As of December 31, 2016: $ $ $ $ $ — There are uncertainties regarding the legal basis of the Group’s ability to operate an Internet business in China. Although China has implemented a wide range of market-oriented economic reforms, the telecommunication, information and media industries remain highly regulated. Not only are such restrictions currently in place, the existing regulations are unclear as to which specific segments of these industries companies with foreign investors, including us, may operate. Therefore, the Group may be required to limit the scope of its operations in China, and this could have a material adverse effect on its financial position, results of operations and cash flows. There are no claims, lawsuits, investigations or proceedings, including unasserted claims that are probable to be assessed, that have in the recent past had, or to the Group’s knowledge, are reasonably possible to have, a material impact on the Group’s financial position results of operations or cash flow. |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2016 | |
Subsequent Events | |
Subsequent Events | 17. Subsequent Events The Group has performed an evaluation of subsequent events through the date of this report, which is the date the financial statements were issued, with no other material events nor transactions needing recognition or disclosure found. |
Additional Information-Condense
Additional Information-Condensed Financial Statements of Weibo Corporation | 12 Months Ended |
Dec. 31, 2016 | |
Additional Information-Condensed Financial Statements of Weibo Corporation | |
Additional Information-Condensed Financial Statements of Weibo Corporation | 18. Additional Information—Condensed Financial Statements of Weibo Corporation The condensed financial information of Weibo Corporation has been prepared in accordance with SEC Regulation S-X Rule 5-04 and Rule 12-04, using the same accounting policies as set out in the Group’s consolidated financial statements, except that the Company used the equity method to account for investment in its subsidiaries and VIE. The operations of the Company, its subsidiaries and VIE were included in the consolidated financial statements, whereby the inter-company balances and transactions were eliminated upon consolidation. For the purpose of the Company’s stand-alone financial information, its investment in subsidiaries and VIE were reported using the equity method of accounting. Relevant PRC statutory laws and regulations permit the payment of dividends by the Company’s PRC subsidiaries and VIE only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. In addition, PRC laws and regulations require that annual appropriations of 10% of after-tax income should be set aside as a reserve prior to the payment of dividends. As a result of these PRC laws and regulations, the Company’s PRC subsidiaries and VIE are restricted in their ability to transfer a portion of their net assets to the Company, either in the form of dividends, loans or advances. The footnote disclosures contain supplemental information relating to the operations of the Company and, as such, these statements should be read in conjunction with the notes to the consolidated financial statements of the Group. Certain information and footnote disclosures normally included in financial statements prepared in accordance with US GAAP have been condensed or omitted. As of December 31, 2015 and 2016, there were no material contingencies, significant provisions for long-term obligations, or guarantees of the Group, except for those which have been separately disclosed in the consolidated financial statements, if any. Condensed Financial Information of Weibo Corporation Balance Sheets (In thousands, except for par value) As of December 31, 2015 2016 ASSETS Current assets: Cash and cash equivalents $ $ Short-term investments Prepaid expenses and other current assets Total current assets Long-term investments Investment in subsidiaries, VIE and VIE’s subsidiaries Amount due from SINA Total assets $ $ LIABILITIES AND SHAREHOLDERS’ EQUITY Accrued and other liabilities $ $ Long-term Liabilities Total liabilities $ $ Commitments and contingencies Shareholders’ equity: Shareholders’ equity: Ordinary shares: $0.00025 par value; 2,400,000 and 2,400,000 shares (including 1,800,000 Class A ordinary shares, 200,000 Class B ordinary shares and 400,000 shares to be designated)authorized; 212,177 and 218,076 shares (including 109,155 Class A ordinary shares and 108,921 Class B ordinary shares) issued and outstanding as of December 31, 2015 and 2016, respectively. $ $ Additional paid-in capital Accumulated other comprehensive loss ) ) Accumulated deficit ) ) Total shareholders’ equity Total liabilities and shareholders’ equity $ $ Condensed Financial Information of Weibo Corporation Statements of Comprehensive Income (Loss) (In thousands) Year Ended December 31, 2014 2015 2016 Operating loss $ ) $ ) $ ) Interest and other income (expenses), net Investment related impairment — — ) Change in fair value of investor option liability ) — — Other income (loss), net Share of income (loss) of subsidiaries, VIE, and VIE’s subsidiaries ) Net income (loss) attributable to Weibo ) Other comprehensive loss Currency translation adjustments(net of tax of nil, nil, and nil for 2014, 2015 and 2016, respectively) ) ) ) Available-for-sale securities: Change in unrealized loss from available-for-sale securities (net of tax of nil, nil, and nil for 2014, 2015, and 2016, respectively) ) ) ) Reclassification adjustment for net loss included in net income (loss) (net of tax of nil, nil, and nil for 2014, 2015, and 2016, respectively) — — Net change, net of tax ) ) Total comprehensive income (loss) $ ) $ $ Condensed Financial Information of Weibo Corporation Statements of Cash flow (In thousands) 2014 2015 2016 Net cash provided by (used in) operating activities $ ) $ $ Purchase of short-term investments ) ) ) Maturity of short-term investments Investments and prepayments on equity investments ) ) ) Investment in subsidiaries ) ) ) Net cash provided by (used in) investing activities ) ) Proceeds from IPO, net of commission — — Repayment of amount due to SINA ) — — Proceeds from employees options exercised Others ) — — Net cash provided by financing activities Net increase (decrease) in cash and cash equivalents $ $ ) $ ) Cash and cash equivalents at the beginning of year $ $ $ Cash and cash equivalents at the end of year $ $ $ Supplemental schedule of non-cash investing and financing activities Investment in subsidiaries and VIE directly financed by SINA $ $ $ |
Significant Accounting Polici26
Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2016 | |
Significant Accounting Policies | |
Basis of presentation | Basis of presentation The preparation of the Group’s consolidated financial statements is in conformity with US GAAP. The consolidated financial statements include the accounts of Weibo, its wholly owned subsidiaries, VIE, and VIE’s subsidiaries. All significant intercompany balances and transactions have been eliminated. Commencing on January 1, 2016, in order to enhance comparability with industry peers, payables that have been invoiced or formally agreed with the suppliers were recorded in accounts payable. The relevant amounts in prior periods have been reclassified from accrued and other liabilities accordingly. Such reclassification amounted to $37.9 million as of December 31, 2015. |
Use of estimates | Use of estimates Conformity with US GAAP requires the use of estimates and judgments that affect the reported amounts in the consolidated financial statements and accompanying notes. These estimates form the basis for judgments the management makes about the carrying values of the assets and liabilities, which are not readily apparent from other sources. GAAP requires making estimates and judgments in several areas, including, but not limited to, the basis of consolidation, revenue recognition, fair value accounting, income taxes, goodwill and other long-lived assets, allowances for doubtful accounts, stock-based compensation, and the estimated useful lives of assets. The management bases the estimates and judgments on historical information and on various other assumptions that management believes are reasonable under the circumstances. Actual results could differ materially from such estimates. |
Revenue recognition | Revenue recognition Advertising and marketing revenues Advertising and marketing revenues are derived principally from online advertising, including social display ads and promoted marketing. Social display ad arrangements allow customers to place advertisements on particular areas of the Group’s platform in particular formats and over particular periods of time, which is typically no more than three months. The Group enters into cost per mille (“CPM”), or cost per thousand impressions, advertising arrangements with the customers, under which the Group recognizes revenues based on the number of times that the advertisement has been displayed. The Group also enters into cost per day (“CPD”) advertising arrangements with customers, under which the Group recognizes revenues ratably over the contract periods. Promoted marketing arrangements are primarily priced based on CPM or cost per engagement (“CPE”). An engagement may include when a user clicks on a link, becomes a follower of the marketing customer account, shares the promoted feed or marks the feed as a favorite. Under the CPM model, customers are obligated to pay when the advertisement is displayed, while under the CPE model, customers are obligated to pay based on the number of engagements with the promoted feed. Revenues are recognized only when the following criteria have been met: (1) persuasive evidence of an arrangement exists; (2) the price is fixed or determinable; (3) the service is performed; and (4) collectability of the related fee is reasonably assured. The majority of the Group’s revenue transactions are based on standard business terms and conditions, which are recognized net of agency rebates. Advertising arrangements involving multiple deliverables are broken down into single-element arrangements based on their relative selling price for revenue recognition purposes. For multiple-deliverable revenue arrangements, it is required that the arrangement consideration to be allocated to all deliverables at the inception of the arrangement on the following basis: (a) vendor-specific objective evidence (VSOE) of selling price, if it exists, otherwise, (b) third-party evidence (TPE) of the selling price. If neither (a) nor (b) exists, then use (c) management’s best estimate of the selling price of the deliverable. The Group primarily uses VSOE to allocate the arrangement consideration if such selling price is available. For the deliverables that have not been sold separately, the best estimate of the selling price (BESP) is used, which has taken into consideration of the pricing of advertising areas of the Group’s platform with similar popularity and advertisements with similar format and quoted prices from competitors and other market conditions. Revenues recognized with reference to BESP were immaterial for all periods presented. The Group recognizes revenues on the elements delivered and defers the recognition of revenues for the undelivered elements until the remaining obligations have been satisfied. Revenues from barter transactions are recognized during the period in which the advertisements are displayed on the Group’s properties. Barter transactions in which physical goods or services (other than advertising services) are received in exchange for advertising services are recorded based on the fair values of the goods or services received. Revenues from barter transactions were immaterial for all periods presented. Other revenues The Group generates other revenues principally from fee-based services, including game-related services, VIP membership and data licensing. Revenues from these services are recognized over the periods in which the services are performed, provided that no significant obligations remain, collection of the receivable is reasonably assured and the amounts can be accurately estimated. Game-related services. Game-related service revenues are mostly generated from the sale of virtual items from games operated by the Group. The Group collects payments from the game players in connection with the sale of virtual currency, which are converted into in-game credits (game tokens) that can be used to purchase virtual items in the third-party developed games. The Group remits certain predetermined percentages of the proceeds to the game developers when the virtual currency is converted into in-game credits. The Group has determined that the game developers are the primary obligors for the game-related service given that the game developers are responsible for developing, maintaining and updating the game related services and have reasonable latitude to establish the prices of virtual items for which in-game credits are used. The Group views the game developers to be its customers, and the Group’s primary responsibility is to promote the games of the developers, provide virtual currency exchange service, maintain the platform for game players to easily access the games and offer customer support to resolve registration, log-in, currency exchange and other related issues. Accordingly, the Group records game-related revenue, net of predetermined revenue sharing with the game developers. Virtual currencies in general are not refundable once they have been sold unless there are unused in-game credits at the time a game is discontinued. Sale of virtual currencies net of the game developer proceeds are recognized as revenues over the estimated consumption period of in-game virtual items, which is typically from a few days to one month after the purchase of in-game credits. VIP membership. VIP membership is a service package consisting of user certification and preferential benefits, such as daily priority listings and higher quota for following user accounts. Prepaid VIP membership fees are recorded as deferred revenue and recognized as revenue ratably over the contract period of the membership service. Data licensing. The Group began to offer data licensing arrangements that allow its customers to access, search and analyze historical and real-time data on its platform. The data licensing arrangement is for a fixed period, typically one year, and such revenue is recognized ratably over the contract period. |
Cost of revenues | Cost of revenues Cost of revenues consists mainly of costs associated with the maintenance of platform, which primarily include bandwidth and other infrastructure costs, labor cost and turnover taxes levied on the revenues, part of which were allocated from SINA (see Note 1 Reorganization ). The Group presents taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction on a gross basis in the financial statements. The Group is subject to 6.7% Value-Added Tax (“VAT”) and surcharges for its revenues and an additional 3% cultural business construction fees for its advertising and marketing revenues. The total amount of such taxes on its advertising and marketing revenues for the years ended December 31, 2014, 2015 and 2016 were $23.2 million, $35.3 million and $49.9 million, respectively. |
Sales and Marketing Expenses | Sales and Marketing Expenses Sales and marketing expenses consist mainly of online and offline advertising and promotional expenses, salary, benefits and commission expenses, and facility expenses. Advertising and promotional expenses generally represent the expenses of promotions of corporate image and product marketing. The Group expenses all advertising and promotional expenses as incurred and classifies these expenses under sales and marketing expenses. For the years ended December 31, 2014, 2015 and 2016, the advertising and promotional expenses were $71.0 million, $81.2 million and $92.2 million, respectively. |
Product development expenses | Product development expenses Product development expenses consist mainly of payroll-related expenses and infrastructure costs incurred for enhancement to and maintenance of the Group’s platform, as well as costs associated with new product development and product enhancements, part of which were allocated from SINA (see Note 1 Reorganization ). The Group expenses all costs incurred for the planning and post implementation phases of development and costs associated with repair or maintenance of the existing site or the development of platform content. Since inception, the amount of costs qualifying for capitalization has been immaterial and, as a result, all product development costs have been expensed as incurred. |
Stock-based compensation | Stock-based compensation All stock-based awards to employees and directors, such as stock options and restricted share units (“RSUs”), are measured at the grant date based on the fair value of the awards. Stock-based compensation, net of forfeitures, is recognized as expenses on a straight-line basis over the requisite service period, which is the vesting period. The Group uses the Black-Scholes option pricing model to estimate the fair value of stock options. The determination of estimated fair value of stock-based payment awards on the grant date using an option pricing model is affected by the fair value of the Company’s ordinary shares as well as assumptions regarding a number of complex and subjective variables. These variables include the expected value volatility of the Company over the expected term of the awards, actual and projected employee stock option exercise behaviors, a risk-free interest rate and expected dividends, if any. Options granted generally vest over four years. The Group recognizes the estimated compensation cost of restricted share units based on the fair value of its ordinary shares on the date of the grant. The Group recognizes the compensation cost, net of estimated forfeitures, over a vesting term of generally four years for service-based restricted share units. The Group also recognizes the compensation cost of performance-based restricted share units, net of estimated forfeitures, according to the probability of performance goal achievement at the end of each reporting period. Forfeitures are estimated at the time of grant and revised in subsequent periods if actual forfeitures differ from those estimates. The Group uses historical data to estimate pre-vesting option and records stock-based compensation expense only for those awards that are expected to vest. See Note 7 Stock-based Compensation for further discussion on stock-based compensation. |
Taxation | Taxation Income taxes Income taxes are accounted for using the asset and liability approach. Under this approach, income tax expense is recognized for the amount of taxes payable or refundable for the current year. In addition, deferred tax assets and liabilities are recognized for expected future tax consequences of temporary differences between the financial reporting and tax bases of assets and liabilities, and for operating losses and tax credit carry forwards. The Group records a valuation allowance to reduce deferred tax assets to an amount for which realization is more likely than not. Income tax liability is calculated based on a separate return basis as if the Group had filed separate tax returns before the Reorganization. Uncertain tax positions. To assess uncertain tax positions, the Group applies a more likely than not threshold and a two-step approach for the tax position measurement and financial statement recognition. Under the two-step approach, the first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. |
Operating leases | Operating leases The Group leases office space under operating lease agreements with initial lease terms ranging from one to five and a half years. Rental expense is recognized from the date of initial possession of the leased property on a straight-line basis over the term of the lease, part of which were allocated from SINA (see Note 1 Reorganization ). Certain lease agreements contain rent holidays, which are recognized on a straight-line basis over the lease term. Lease renewal periods are considered on a lease-by-lease basis and are generally not included in the initial lease terms. The allocated rental expenses from SINA for the years ended December 31, 2014, 2015 and 2016, were $4.0 million, $3.5 million and $3.9 million, respectively. |
Cash equivalents | Cash equivalents The Group considers all highly liquid investments with original maturities of three months or less as cash equivalents. Cash equivalents are comprised of investments in time deposits stated at cost plus accrued interest. |
Accounts receivable and allowances for doubtful accounts | Accounts receivable and allowances for doubtful accounts Accounts receivable are recorded and carried at the original invoiced amount less an allowance for any potential uncollectible amounts. The Group maintains an allowance for doubtful accounts which reflects its best estimate of amounts that will not be collected. The Group determines the allowance for doubtful accounts based on a historical, rolling average, bad debt rate in the prior period and other factors, such as credit-worthiness of the customers and the age of the receivable balances. The Group also provides specific provisions for bad debts when facts and circumstances indicate that the receivable is unlikely to be collected. If the financial condition of the Group’s customers were to deteriorate, resulting in an impairment of their ability to make payments, more bad debt allowances may be required. |
Fair value measurements | Fair value measurements Financial instruments All financial assets and liabilities are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. Accounting guidance defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Group considers the principal or most advantageous market in which it would transact and it considers assumptions that market participants would use when pricing the asset or liability. Accounting guidance establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. A financial instrument’s categorization within the fair value hierarchy is based upon the lowest level of input that is significant to the fair value measurement. Accounting guidance establishes three levels of inputs that may be used to measure fair value: · Level 1 applies to assets or liabilities for which there are quoted prices in active markets for identical assets or liabilities. · Level 2 applies to assets or liabilities for which there are inputs other than quoted prices included within Level 1 that are observable for the asset or liability such as quoted prices for similar assets or liabilities in active markets; quoted prices for identical asset or liabilities in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which significant inputs are observable or can be derived principally from, or corroborated by, observable market data. · Level 3 applies to asset or liabilities for which there are unobservable inputs to the valuation methodology that are significant to the measurement of the fair value of the assets or liabilities. The carrying amount of cash and cash equivalents, short-term investments, accounts receivable due from third parties, accounts receivable due from Alibaba, accounts receivable due from other related parties, amount due from/to SINA, accounts payable, accrued and other liabilities approximates fair value because of their short-term nature. See Note 15 Financial Instruments for additional information. |
Long-term investments | Long-term investments Long-term investments are comprised of investments in publicly traded and privately held companies. For long-term investments over which the Group does not have significant influence, the cost method of accounting is used. For long-term investments in shares that are not common stock or in-substance common stock and that do not have readily determinable fair value, the cost method accounting is used. The Group uses the equity method to account for ordinary-share-equivalent equity investments over which it has significant influence but does not own a majority equity interest or otherwise control. The Group monitors its investments accounted for under the cost method and equity method for other-than-temporary impairment by considering factors such as current economic and market conditions and the operating performance of the business, including current earnings trends, undiscounted cash flows, and other company-specific information, such as recent financing rounds. Determination of the fair value, particularly for investments in privately-held companies whose revenue model is unclear, requires significant judgment to determine appropriate estimates and assumptions. Changes in these estimates and assumptions could affect the calculation of the fair value of the investments and the determination of whether any identified impairment is other-than-temporary. If any impairment is considered other-than-temporary, the Group will write down the asset to its fair value and take the corresponding charge to the consolidated statements of comprehensive income (loss). The Group recorded an impairment charge of $2.5 million, $6.6 million and $31.6 million to the carrying value of long-term investments accounted for under the cost method and equity method for the years ended December 31, 2014, 2015 and 2016, respectively. The Group invests in marketable equity securities to meet business objectives and intends to hold the securities for more than a year from the balance sheet date. These marketable securities are reported at fair value, classified and accounted for as available-for-sale (“AFS”) securities under long-term investments. The treatment of a decline in the fair value of an individual security is based on whether the decline is other-than-temporary. The Group assesses its available-for-sale securities for other-than-temporary impairment by considering factors including, but not limited to, its ability and intent to hold the individual security, severity of the impairment, expected duration of the impairment and forecasted recovery of fair value. Investments classified as available-for-sale securities are reported at fair value with unrealized gains or losses, if any, recorded in accumulated other comprehensive loss in shareholders’ equity. If the Group determines a decline in fair value is other-than-temporary, the cost basis of the individual security is written down to fair value as a new cost basis and the amount of unrealized loss recorded in accumulated other comprehensive loss will be reclassified to net income (loss) in the consolidated statements of comprehensive income (loss). The fair value of the investment would then become the new cost basis of the investment and is not adjusted for subsequent recoveries in fair value. The Group recorded an impairment charge of nil, nil and $4.8 million to AFS securities for the years ended December 31, 2014, 2015 and 2016, respectively. |
Business combination | Business combination Business combinations are recorded using the purchase method of accounting, and the cost of an acquisition is measured as the aggregate of the fair values at the date of exchange of the assets given, liabilities incurred, and equity instruments issued as well as the contingent considerations and all contractual contingencies as of the acquisition date. The costs directly attributable to the acquisition are expensed as incurred. Identifiable assets, liabilities and contingent liabilities acquired or assumed are measured separately at their fair value as of the acquisition date, irrespective of the extent of any non-controlling interests. The excess of the (i) the total of consideration paid, fair value of the non-controlling interests and acquisition date fair value of any previously held equity interest in the subsidiary acquired over (ii) the fair value of the identifiable net assets of the subsidiary acquired is recorded as goodwill. If the consideration of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognized directly in the consolidated statements of comprehensive income (loss). |
Long-lived assets | Long-lived assets Property and equipment Property and equipment are stated at cost less accumulated depreciation, amortization and impairment, if any. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally from three to four years for computers and equipment and five years for furniture and fixtures. Leasehold improvements are amortized over the shorter of the estimated useful lives of the assets or the remaining lease term. Depreciation expenses were $21.8 million, $19.5 million and $13.3 million for the years ended December 31, 2014, 2015 and 2016, respectively. Goodwill Goodwill represents the excess of the purchase price over the fair value of the identifiable assets and liabilities acquired as a result of the Group’s acquisitions of interests in its subsidiaries and consolidated VIE. The Group assesses goodwill for impairment in accordance with ASC Subtopic 350-20 (“ASC 350-20”), Intangibles - Goodwill and Other: Goodwill, which requires that goodwill be tested for impairment at the reporting unit level at least annually and more frequently upon the occurrence of certain events, as defined by ASC 350-20. US GAAP provides the option to apply the qualitative assessment first and then the quantitative assessment, if necessary, or to apply the quantitative assessment directly. The qualitative approach starts the goodwill impairment test by assessing qualitative factors, which by taking into consideration of macroeconomics, overall financial performance, industry and market conditions and the share price of the Group, to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If so, the quantitative impairment test is performed; otherwise, no further testing is required. The quantitative impairment test consists of a comparison of the fair value of goodwill with its carrying value. For reporting units directly applying a quantitative assessment, the goodwill impairment test is quantitatively performed by comparing the fair values of those reporting units to their carrying amounts. The Group adopted the option to apply the qualitative approach to assess its goodwill on the relevant reporting units. Application of a goodwill impairment test requires significant management judgment, including the identification of reporting units, assigning assets and liabilities to reporting units, assigning goodwill to reporting units, and determining the fair value of each reporting unit. Judgment in estimating the fair value of reporting units includes estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these estimates and assumptions could materially affect the determination of fair value for each reporting unit. Intangible assets other than goodwill Intangible assets arising from acquisitions are recognized at fair value upon acquisition and amortized on a straight-line basis over their estimated useful lives, generally from two to five years. Long-lived assets and certain identifiable intangible assets other than goodwill to be held and used are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of any impairment loss for long-lived assets and certain identifiable intangible assets that management expects to hold or use is based on the amount by which the carrying value exceeds the fair value of the asset. Judgment is used in estimating future cash flows, determining appropriate discount rates and making other assumptions. Changes in these estimates and assumptions could materially affect the determination of the asset’s fair value. |
Deferred revenues | Deferred revenues Deferred revenues consist of contractual billings in excess of recognized revenue and payments received in advance of revenue recognition, which are mainly from the customer advance of the advertising and marketing services and the sales of the fee-based services, such as virtual currency or in-game virtual items sold for game related services and VIP membership. |
Non-controlling interests | Non-controlling interests For the Company’s majority-owned subsidiaries and VIE, non-controlling interests are recognized to reflect the portion of their equity that is not attributable, directly or indirectly, to the Company as the controlling shareholder. To reflect the economic interest held by non-controlling shareholders, net income (loss) attributable to the non-controlling ordinary shareholders is recorded as non-controlling interests in the Company’s consolidated statements of comprehensive income (loss). Non-controlling interests are classified as a separate line item in the equity section of the Company’s consolidated balance sheets and have been separately disclosed in the Company’s consolidated financial statements to distinguish the interests from that of the Company. |
Foreign currency | Foreign currency The Company’s reporting currency and functional currency are the U.S. dollar. The Group’s operations in China and in international regions use their respective currencies as their functional currencies. The financial statements of these subsidiaries are translated into U.S. dollars using period-end rates of exchange for assets and liabilities and average rates of exchange in the period for revenues, costs and expenses. Translation gains and losses are recorded in accumulated other comprehensive income or loss as a component of shareholders’ equity. Translation gains or losses are not released to net income (loss) unless the associated net investment has been sold, liquidated, or substantially liquidated. Foreign currency transactions denominated in currencies other than the functional currency are translated into the functional currency using the exchange rate prevailing on the transactions dates. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency using the applicable exchange rates at the balance sheet dates. Net gains and losses resulting from foreign exchange transactions are included in interest and other income, net. Foreign currency translation adjustments included in the Group’s consolidated statements of comprehensive income (loss) for the years ended December 31, 2014, 2015 and 2016 were loss of $1.5 million, $7.9 million and $18.9 million, respectively. Net foreign currency transaction gains or losses arise from transacting in a currency other than the functional currency of the entity and the amounts recorded were immaterial for each of the periods presented. |
Net Income (loss) per share | Net Income (loss) per share Basic net income (loss) per share is computed using the weighted average number of ordinary shares outstanding during the period. Options and RSUs are not considered outstanding in computation of basic earnings per share. Diluted net income (loss) per share is computed using the weighted average number of ordinary shares and potential ordinary shares outstanding during the period under treasury stock method. Potential ordinary shares include options to purchase ordinary shares and RSUs, unless they were anti-dilutive. The computation of diluted net income (loss) per share does not assume conversion, exercise, or contingent issuance of securities that would have an anti-dilutive effect (i.e. an increase in earnings per share amounts or a decrease in loss per share amounts) on net income (loss) per share. The Group uses the two-class method to calculate net income (loss) per share as both classes share the same rights in dividends. Therefore, basic and diluted earnings per share are the same for both classes of ordinary shares. |
Segment reporting | Segment reporting In accordance with ASC 280, Segment Reporting, the Group’s chief operating decision maker (“CODM”), the Chief Executive Officer, reviews the consolidated results when making decisions about allocating resources and assessing performance of the Group as a whole. The Group currently operates and manages its business in two principal business segments globally—advertising and marketing services and other services. Information regarding the business segments provided to the Group’s CODM is at the revenue level and the Group currently does not allocate operating costs or assets to its segments, as its CODM does not use such information to allocate resources or evaluate the performance of the operating segments. As the Group’s long-lived assets are substantially all located in the PRC and substantially the Group’s revenues are derived from within the PRC, no geographical information is presented. |
Concentration of risks | Concentration of risks Concentration of credit risk. Financial instruments that potentially subject the Group to a concentration of credit risk consist primarily of cash and cash equivalents, short-term investments and accounts receivable. In addition, with the majority of its operations in China, the Group is subject to RMB currency risk and offshore remittance risk, both of which have been difficult to hedge and the Group has not done so. The Group limits its exposure to credit loss by depositing its cash and cash equivalents with financial institutions in the US, PRC and Hong Kong, which are among the largest and most respected with high ratings from internationally-recognized rating agencies, that management believes are of high credit quality. The Group periodically reviews these institutions’ reputations, track records and reported reserves. As of December 31, 2015 and 2016, the Group had $334.6 million and $393.6 million, respectively, in cash and bank time deposits (with terms generally up to twelve months) with large domestic banks in China. China promulgated a Bankruptcy Law that came into effect on June 1, 2007, which contains a separate article expressly stating that the State Council may promulgate implementation measures for the bankruptcy of Chinese banks based on the Bankruptcy Law. Under the Bankruptcy Law, a Chinese bank may go bankrupt. In addition, since China’s concession to WTO, foreign banks have been gradually permitted to operate in China and have become significant competitors to Chinese banks in many aspects, especially since the opening of RMB business to foreign banks in late 2006. Therefore, the risk of bankruptcy on Chinese banks in which the Group holds cash and bank deposits has increased. In the event that a Chinese bank that holds the Group’s deposits goes bankrupt, the Group is unlikely to claim its deposits back in full, since it is unlikely to be classified as a secured creditor to the bank under the PRC laws. Alibaba accounted for 32%, 30% and 9% of the Group’s revenues for the years ended December 31, 2014, 2015 and 2016, respectively. No other customer nor advertising agency accounted for 10% or more of the Group’s revenues. The Group’s top 10 advertising agencies contributed to 14%, 15%, and 22% of the Group’s revenues for the years ended December 31, 2014, 2015, and 2016, respectively. As of December 31, 2015 and 2016, substantially all accounts receivable were derived from the Group’s China operations. Excluding accounts receivable due from Alibaba and other related parties, accounts receivable primarily consists of amounts due from advertising agencies and direct customers. Alibaba accounted for 45% and 21%, respectively, of the Group’s net accounts receivables as of December 31, 2015 and 2016, while one customer accounted for 16% and 15%, respectively, at the same dates. Concentration of foreign currency risks. The majority of the Group’s operations were in RMB. As of December 31, 2015 and 2016, the Group’s cash, cash equivalents and short-term investments balance denominated in RMB was $157.9 million and $335.7 million, accounting for 47% and 85% of the Group’s total cash, cash equivalents and short-term investments balance. As of December 31, 2015 and 2016, the Group’s aggregate net accounts receivable balance (including accounts receivable due from third parties, Alibaba and other related parties) denominated in RMB was $120.1 million and $115.3 million, respectively, accounting for almost all of its net accounts receivable balance. As of December 31, 2015 and 2016, the Group’s current liabilities balance denominated in RMB was $197.9 million and $267.8 million, accounting for 95% and 96% of its total current liabilities balance. Accordingly, the Group may experience economic losses and negative impacts on earnings and equity (deficit) as a result of exchange rate fluctuations of the RMB. Moreover, the Chinese government imposes controls on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out of the PRC. The Group may experience difficulties in completing the administrative procedures necessary to remit its RMB out of the PRC and convert it into foreign currency. |
Recent accounting pronouncements | Recent accounting pronouncements In May 2014, the Financial Accounting Standards Board (“FASB”) issued, ASU 2014-09, “Revenue from Contracts with Customers (Topic 606).” The guidance substantially converges final standards on revenue recognition between the FASB and the International Accounting Standards Board providing a framework on addressing revenue recognition issues and, upon its effective date, replaces almost all exiting revenue recognition guidance, including industry-specific guidance, in current U.S. generally accepted accounting principles. In April 2015, the FASB proposed a one-year delay in the effective date and companies will be allowed to early adopt as of the original effective date. The Group plans to adopt the new revenue guidance beginning in the first quarter of fiscal year 2018 and is currently evaluating the impact this new guidance will have on its consolidated financial statements. In January 2016, the FASB issued updated guidance on financial instruments, ASU No. 2016-01, which intends to improve the recognition and measurement of financial instruments. This guidance will be effective beginning the first quarter of fiscal year 2018. The Group is currently evaluating the impact this new guidance will have on its consolidated financial statements. In February 2016, the FASB issued a new standard on leases, ASU No. 2016-02, which requires that a lessee recognize the assets and liabilities that arise from operating leases. A lessee should recognize a liability to make lease payments (the lease liability) and a right-of use representing its right to use the underlying asset for the lease term in the statements of financial position. For leases with a term of 12 months or less, a lessee is permitted to make an accounting policy election by class of underlying asset not to recognize lease assets and lease liabilities. In transition, lessees are required to recognize and measure leases at the beginning of the earliest period presented using a modified retrospective approach. This standard will be effective for the Group beginning the first quarter of fiscal year 2019. The Group is currently evaluating the impact that this new standard will have on its consolidated financial statements. In March 2016, the FASB issued a new standard on stock compensation, ASU No. 2016-09, which simplifies several aspects of the accounting for share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. The standard will be effective for the Group beginning the first quarter of fiscal year 2017. The Group does not expect a significant impact on its consolidated financial statements from the new standard. In August 2016, the FASB issued ASU No. 2016-15, which clarifies and includes specific guidance to address diversity in how certain cash receipts and cash payments are presented and classified in the statement of cash flows. The amendments will be effective beginning the first quarter of fiscal year 2018. Early adoption of the amendments is permitted. The amendments in this ASU should be applied using a retrospective transition method to each period presented. The Group will adopt the amendments in the fiscal year of 2018 and does not expect a significant impact on its consolidated financial statements from the new standard. In January 2017, the FASB issued ASU No. 2017-01, which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions or disposals of assets or businesses. The amendments will be effective beginning the first quarter of fiscal year 2018. Early adoption is permitted. The amendments should be applied prospectively on or after the effective date. No disclosures are required at transition. The Group is currently evaluating the impact this new standard will have on its consolidated financial statements. In January 2017, the FASB issued ASU No. 2017-04, which simplifies the subsequent measurement of goodwill by eliminating Step 2 from the goodwill impairment test. Under the amendments, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying value, which eliminates the current requirement to calculate a goodwill impairment charge by comparing the implied fair value of goodwill with its carrying amount. The amendments will be effective beginning the first quarter of fiscal year 2020. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. The amendments should be applied on a prospective basis. The Group is currently evaluating the impact this new standard will have on its consolidated financial statements. In February 2017, the FASB issued ASU No. 2017-05, which clarifies the scope of guidance on nonfinancial asset derecognition (ASC 610-20) as well as the accounting for partial sales of nonfinancial assets. The amendments will be effective beginning the first quarter of fiscal year 2018. Early adoption is permitted but must also early adopt the new revenue standard (ASC 606). The amendments should be applied on a full or modified retrospective basis. The Group currently anticipates adopting the new standard effective January 1, 2018, and is currently evaluating the impact this new standard will have on its consolidated financial statements. |
Operations and reorganization (
Operations and reorganization (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Operations and reorganization | |
Schedule of the Company's major subsidiaries, VIE and VIE's subsidiary | Company Date of Place of Percentage of Major Subsidiaries Weibo Hong Kong Limited (“Weibo HK”) July 19, 2010 Hong Kong % Weibo Internet Technology (China) Co., Ltd. (“Weibo Technology” or “the WFOE”) October 11, 2010 PRC % Major VIE and VIE’s subsidiary Beijing Weimeng Technology Co., Ltd (“Weimeng”) August 9, 2010 PRC % Beijing Weibo Interactive Internet Technology Co., Ltd. (‘‘Weibo Interactive’’) Acquired in May 2013 PRC % |
Schedule of total cost and expenses allocated from SINA | Year Ended December 31, 2014 2015 2016 (In thousands) Cost of revenues $ $ $ Sales and marketing Product development General and administrative $ $ $ |
Schedule of assets, liabilities, results of operations and cash flows of the VIE and the VIE's subsidiaries taken as a whole, including the Predecessor Operations | As of December 31, 2015 2016 (In thousands) Cash, cash equivalents and short-term Investments $ $ Accounts receivable Property and equipment, net Intangible assets Goodwill Prepayment for long-term investments Long-term investments Deferred tax assets Amount due from SINA — Others Total assets $ $ Accounts payable $ $ Accrued and other liabilities Deferred revenues Income tax payable Amount due to SINA — Amount due to the subsidiaries of the Group Deferred tax liability Total liabilities $ $ Year Ended December 31, 2014 2015 2016 (In thousands) Net revenues $ $ $ Net loss $ ) $ ) $ ) Year Ended December 31, 2014 2015 2016 (In thousands) Net cash provided by operating activities $ $ $ ) Net cash used in investing activities $ ) $ ) $ ) Net cash used in financing activities $ ) $ — $ ) Net increase (decrease) in cash and cash equivalents $ ) $ $ ) |
Cash, Cash Equivalents and Sh28
Cash, Cash Equivalents and Short-term Investments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Cash, Cash Equivalents and Short-term Investments | |
Schedule of cash, cash equivalents and short-term investments | As of December 31, 2015 2016 (In thousands) Cash and cash equivalents: Cash $ $ Cash equivalents: Bank time deposits — Short-term investments: Bank time deposits Total cash, cash equivalents and short-term investments $ $ |
Long-term Investments (Tables)
Long-term Investments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Long-term Investments | |
Schedule of changes in the Group's long-term investments | Cost Method Equity Method Available-for-Sale Total (In thousands) Balance at December 31, 2013 $ $ — $ — $ Investments made Loss from equity method investment — ) — ) Impairment on investments ) — — ) Transfer from long-term investments to a wholly owned subsidiary ) — — ) Unrealized loss — — ) ) Currency translation adjustment ) — ) Balance at December 31, 2014 $ $ $ $ Investments made — — Loss from equity method investment — ) — ) Disposal of investments ) — — ) Impairment on investments ) — — ) Unrealized loss — — ) ) Currency translation adjustment ) ) — ) Balance at December 31, 2015 $ $ $ $ Investments made — Loss from equity method investment — ) — ) Disposal of investments ) — ) ) Impairment on investments ) — — ) Unrealized loss — — ) ) Currency translation adjustment ) ) — ) Balance at December 31, 2016 $ $ $ $ |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Acquisitions | |
Schedule of the changes in the Group's goodwill by segment | Advertising & Other Total (In thousands) Balance as of December 31, 2014 $ — $ $ Currency translation adjustment — ) ) Balance as of December 31, 2015 $ — $ $ Currency translation adjustment — ) ) Balance as of December 31, 2016 $ — $ $ |
Schedule of estimated amortization expenses | Year Ended December 31, (In thousands) 2017 $ 2018 2019 and thereafter — Total expected amortization expense $ |
Gametree | |
Acquisitions | |
Schedule of fair value of the assets acquired and the liabilities assumed | As of acquisition date (In thousands) Cash consideration $ Non-controlling interests Total consideration Tangible assets Identifiable intangible assets acquired Liabilities assumed ) Goodwill Total consideration $ |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Stock-based compensation | |
Schedule of the stock-based compensation | Year Ended December 31, 2014 2015 2016 (In thousands) Cost of revenues $ $ $ Sales and marketing Product development General and administrative $ $ $ |
Summary of the number of shares available for issuance | Shares Available (In thousands) December 31, 2013 Addition Granted* ) Cancelled/expired/forfeited December 31, 2014 Addition Granted* ) Cancelled/expired/forfeited December 31, 2015 Addition — Granted* ) Cancelled/expired/forfeited December 31, 2016 * In 2014, 3.0 million restricted share units and no options were granted under the 2014 Plan. In 2015, 4.9 million restricted share units and no options were granted under the 2014 Plan. In 2016, 1.9 million restricted share units and no options were granted under the 2014 Plan. |
Summary of option activities under the Company' stock option program | Options Weighted Average Weighted Average Aggregate (In thousands) (In years) (In thousands) December 31, 2013 $ $ Granted — $ — Exercise ) $ Cancelled/expired/forfeited ) $ Repurchased — $ — December 31, 2014 $ $ Granted — $ — Exercise ) $ Cancelled/expired/forfeited ) $ Repurchased — $ — December 31, 2015 $ $ Granted — $ — Exercise ) $ Cancelled/expired/forfeited ) $ Repurchased — $ — December 31, 2016 $ $ Vested and expected to vest as of December 31, 2015 $ $ Exercisable as of December 31, 2015 $ $ Vested and expected to vest as of December 31, 2016 $ $ Exercisable as of December 31, 2016 $ $ |
Schedule of stock options outstanding | Range of Exercise Prices Options Weighted Options Weighted Weighted Average (In thousands) (In thousands) (In years) As of December 31, 2015 $0.36 - $0.41 $ $ $0.96 - $1.80 $ $ $3.25 - $3.36 $ $ $3.43 - $3.50 $ $ $ $ As of December 31, 2016 $0.36 - $0.41 $ $ $0.96 - $1.80 $ $ $3.25 - $3.36 $ $ $3.43 - $3.50 $ $ $ $ |
Performance-based restricted share units | |
Stock-based compensation | |
Summary of restricted share unit activities | Shares Granted Weighted-Average (In thousands) December 31, 2015 — $ — Awarded $ Cancelled ) $ December 31, 2016 $ |
Service-based restricted share units | |
Stock-based compensation | |
Summary of restricted share unit activities | Shares Weighted- (In December 31, 2013 $ Awarded $ Vested ) $ Cancelled ) $ December 31, 2014 $ Awarded $ Vested ) $ Cancelled ) $ December 31, 2015 $ Awarded $ Vested ) $ Cancelled ) $ December 31, 2016 $ |
Other Balance Sheet Components
Other Balance Sheet Components (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Other Balance Sheet Components | |
Schedule of other balance sheet components | As of December 31, 2014 2015 2016 (In thousands) Accounts receivable, net: Due from third parties $ $ Due from Alibaba Due from other related parties Total gross amount $ $ Allowance for doubtful accounts: Balance at the beginning of the year ) ) ) Reversal (additional provision) charged to expenses, net ) ) Write-off Balance at the end of the year ) ) ) $ $ Prepaid expenses and other current assets: Rental and other deposits $ $ Prepayment for investments Advertising prepayment Prepayment to outsourced service providers Amounts deposited by users* — Others $ $ Property and equipment, net: Computers and equipment $ $ Leasehold improvements Furniture and fixtures Others Property and equipment, gross Less: Accumulated depreciation ) ) $ $ Accrued and other liabilities**: Payroll and welfare $ $ Marketing expenses Payroll withholding taxes Sales rebates Professional fees VAT and other tax payable Payable to other service providers Amounts due to users* — Others $ $ * Weibo wallet enables users to conduct interest-generation activities on Weibo, such as handing out “red envelops” and coupons to users and purchase different types of products and services on Weibo, including those offered by the Group, such as marketing services and VIP membership, and those offered by Weibo’s platform partners, such as e-commerce merchandises, financial products and virtual gifts. Amounts deposited by users primarily represent the receivables temporarily held in Weibo’s account on a third party online payment platform for Weibo wallet users. Amounts due to users represent the balances that are payable on demand to Weibo wallet users and therefore are reflected as current liability on the consolidated balance sheets. ** Include amounts due to third parties, employees, related parties and Weibo wallet users. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Income Taxes | |
Schedule of income (loss) before income taxes | Year Ended December 31, 2014 2015 2016 (In thousands, except percentage) Income (Loss) before income tax expenses $ ) $ $ Loss from non-China operations $ ) $ ) $ ) Income (Loss) from China operations $ ) $ $ Income tax expense applicable to China operations $ $ $ Effective tax rate for China operations )% % % |
Schedule of current and deferred portion of income tax expenses (benefits) | Years Ended December 31, 2014 2015 2016 (In thousands) Deferred tax expenses (benefits) $ $ ) $ ) Current income tax expenses Income tax expenses $ $ $ |
Schedule of reconciliation between the statutory EIT rate and the effective tax rate for China operations | Year Ended December 31, 2014 2015 2016 Statutory EIT rate % % % Effect on tax holiday — ) % )% Permanent differences % % % Change in valuation allowance )% % % Effective tax rate for China operations )% % % |
Schedule of significant components of deferred tax assets and liabilities for the Group | As of December 31, 2015 2016 (In thousands) Deferred tax assets: Net operating loss carry forwards $ $ Less: valuation allowance ) ) Depreciation, accounts receivable, accrued and other liabilities Less: valuation allowance ) ) Net deferred tax assets $ $ Deferred tax liabilities: Acquired intangible assets $ $ Depreciation Others Total deferred tax liabilities $ $ |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Related Party Transactions | |
Schedule of significant related parties and their relationships with the Company | Company Name Relationship with the Company SINA Parent and affiliates under common control. Alibaba Strategic partner and significant shareholder of the Company. |
Schedule of significant related party transactions with the Company | Year Ended December 31, 2014 2015 2016 (In thousands) Transactions with SINA Revenue billed through SINA(1) $ $ $ Deemed contribution from SINA(2) $ $ — $ — Legal transfer of Weibo Funds and recognition of due to SINA(3) $ $ — $ — Costs and expenses allocated from SINA(4) $ $ $ Interest expense on amount due to SINA $ $ — $ — Repayment of amount due to SINA(5) $ $ $ — (1) For the years ended December 31, 2014, 2015 and 2016, the Group billed $4.1 million, $22.1 million and $39.3 million, respectively, to third parties through SINA. (2) The $61.2 million in deemed contribution from SINA represents the discount borne by SINA upon the settlement of investor options in 2014(see Note 3). (3) The $22.6 million relates to the amount paid by SINA for the Weibo Funds in 2014. (see Note1). (4) Costs and expenses allocated from SINA represented the charges for certain services provided by SINA’s affiliates and charged to the Company using actual cost allocation based on proportional utilization (see Note 1). In addition to the allocated costs and expenses, SINA also billed $15.1million, $29.4 million, and $20.3 million for other costs and expenses associated with Weibo’s business in 2014, 2015, and 2016, respectively. (5) For the year ended December 31, 2014, the Company repaid approximately $276.6 million for a loan and related interests to SINA. Year Ended December 31, 2014 2015 2016 (In thousands) Transactions with Alibaba Advertising and marketing services provided to Alibaba $ $ $ Deemed contribution from Alibaba(6) $ $ — $ — Services provided by Alibaba $ $ $ (6) The $15.3 million represents the discount borne by Alibaba upon the settlement of investor options in 2014. (see Note 3) |
Schedule of related party outstanding balance | As of December 31, 2015 2016 (In thousands) Amount due from SINA(7) $ — $ Amount due to SINA (7) $ $ — Accounts receivable due from Alibaba $ $ (7) The Group uses amount due from/to SINA to settle balances arising from cost and expenses allocated from SINA based on proportional utilization, other expenditures associated with the Weibo business paid by SINA and third-party customer and supplier balances settled through SINA. |
Net Income (Loss) Per Share (Ta
Net Income (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Net Income (Loss) Per Share | |
Schedule of basic and diluted net income (loss) per share | Year Ended December 31, 2014 2015 2016 (In thousands, except per share data) Basic net income (loss) per share calculation: Numerator: Net income (loss) attributable to Weibo $ ) $ $ Denominator: Weighted average ordinary shares outstanding Basic net income (loss) per share attributable to Weibo $ ) $ $ Diluted net income (loss) per share calculation: Numerator: Net income (loss) attributable for calculating diluted net income (loss) per share $ ) $ $ Denominator: Weighted average ordinary shares outstanding Weighted average ordinary shares equivalents: Effects of dilutive securities Stock options — Unvested restricted share units — Shares used in computing diluted net income (loss) per share attributable to Weibo Diluted net income (loss) per share attributable to Weibo $ ) $ $ |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Segment Information | |
Summary of the Group's revenues | Revenues Advertising & Marketing Other Total (In thousand) Year ended December 31, 2014 $ $ $ Year ended December 31, 2015 $ $ $ Year ended December 31, 2016 $ $ $ |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Financial Instruments | |
Schedule of financial instruments measured at fair value by level within the fair value hierarchy | Fair Value Measurements (in thousands) Total Quoted Prices in Significant Other Significant As of December 31, 2015: Bank time deposits* $ $ — $ $ — Available-for-sale securities** — — Total $ $ $ $ — As of December 31, 2016: Bank time deposits* $ $ — $ $ — Available-for-sale securities** — — Total $ $ $ $ — * Included in cash and cash equivalents and short-term investments on the Group’s consolidated balance sheets. ** Included in long-term investments on the Group’s consolidated balance sheets. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
Dec. 31, 2016 | |
Commitments and Contingencies | |
Schedule of future minimum rental payments | Operating lease commitments Total Less than One One to Three to More than (In thousands) As of December 31, 2016: $ $ $ $ $ — |
Schedule of purchase commitments | Purchase commitments Total Less than One One to Three to More than (In thousands) As of December 31, 2016: $ $ $ $ $ — |
Additional Information-Conden39
Additional Information-Condensed Financial Statements of Weibo Corporation (Tables) - Weibo Corporation | 12 Months Ended |
Dec. 31, 2016 | |
Balance sheets | |
Balance Sheets | (In thousands, except for par value) As of December 31, 2015 2016 ASSETS Current assets: Cash and cash equivalents $ $ Short-term investments Prepaid expenses and other current assets Total current assets Long-term investments Investment in subsidiaries, VIE and VIE’s subsidiaries Amount due from SINA Total assets $ $ LIABILITIES AND SHAREHOLDERS’ EQUITY Accrued and other liabilities $ $ Long-term Liabilities Total liabilities $ $ Commitments and contingencies Shareholders’ equity: Shareholders’ equity: Ordinary shares: $0.00025 par value; 2,400,000 and 2,400,000 shares (including 1,800,000 Class A ordinary shares, 200,000 Class B ordinary shares and 400,000 shares to be designated)authorized; 212,177 and 218,076 shares (including 109,155 Class A ordinary shares and 108,921 Class B ordinary shares) issued and outstanding as of December 31, 2015 and 2016, respectively. $ $ Additional paid-in capital Accumulated other comprehensive loss ) ) Accumulated deficit ) ) Total shareholders’ equity Total liabilities and shareholders’ equity $ $ |
Statements of Comprehensive Income (Loss) | (In thousands) Year Ended December 31, 2014 2015 2016 Operating loss $ ) $ ) $ ) Interest and other income (expenses), net Investment related impairment — — ) Change in fair value of investor option liability ) — — Other income (loss), net Share of income (loss) of subsidiaries, VIE, and VIE’s subsidiaries ) Net income (loss) attributable to Weibo ) Other comprehensive loss Currency translation adjustments(net of tax of nil, nil, and nil for 2014, 2015 and 2016, respectively) ) ) ) Available-for-sale securities: Change in unrealized loss from available-for-sale securities (net of tax of nil, nil, and nil for 2014, 2015, and 2016, respectively) ) ) ) Reclassification adjustment for net loss included in net income (loss) (net of tax of nil, nil, and nil for 2014, 2015, and 2016, respectively) — — Net change, net of tax ) ) Total comprehensive income (loss) $ ) $ $ |
Statements of Cash flow | (In thousands) 2014 2015 2016 Net cash provided by (used in) operating activities $ ) $ $ Purchase of short-term investments ) ) ) Maturity of short-term investments Investments and prepayments on equity investments ) ) ) Investment in subsidiaries ) ) ) Net cash provided by (used in) investing activities ) ) Proceeds from IPO, net of commission — — Repayment of amount due to SINA ) — — Proceeds from employees options exercised Others ) — — Net cash provided by financing activities Net increase (decrease) in cash and cash equivalents $ $ ) $ ) Cash and cash equivalents at the beginning of year $ $ $ Cash and cash equivalents at the end of year $ $ $ Supplemental schedule of non-cash investing and financing activities Investment in subsidiaries and VIE directly financed by SINA $ $ $ |
Operations and reorganization -
Operations and reorganization - Narrative Information (Details) | Apr. 17, 2014shares | Apr. 30, 2014USD ($)shares | Dec. 31, 2016USD ($)Vote | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | Jun. 29, 2015Partnership |
Operations and reorganization | ||||||
Proceeds from IPO | $ 306,491,000 | |||||
Repayment of amount due to SINA | $ 2,863,000 | 269,042,000 | ||||
Interest expense | $ 0 | 0 | 2,838,000 | |||
SINA | ||||||
Operations and reorganization | ||||||
Repayment of amount due to SINA | 2,863,000 | 276,614,000 | ||||
Interest expense | 2,838,000 | |||||
SINA | Amount due to SINA | ||||||
Operations and reorganization | ||||||
Repayment of amount due to SINA | 276,600,000 | |||||
Interest expense | $ 0 | $ 0 | $ 2,800,000 | |||
SINA | Amount due to SINA | Maximum | ||||||
Operations and reorganization | ||||||
Interest rate (as a percent) | 3.05% | |||||
SINA | Amount due to SINA | Minimum | ||||||
Operations and reorganization | ||||||
Interest rate (as a percent) | 2.55% | |||||
Alibaba | SINA | ||||||
Operations and reorganization | ||||||
Number of ordinary shares acquired by investor (in shares) | shares | 23,990,778 | |||||
Class A ordinary shares | ||||||
Operations and reorganization | ||||||
Shares issued from conversion of preferred shares (in shares) | shares | 30,046,154 | |||||
Number of votes each share is entitled to | Vote | 1 | |||||
Number of Class A shares converted from Class B shares | 1 | |||||
Class A ordinary shares | Alibaba | ||||||
Operations and reorganization | ||||||
Number of ordinary shares acquired by investor (in shares) | shares | 29,990,778 | |||||
Class A ordinary shares | Alibaba | SINA | ||||||
Operations and reorganization | ||||||
Number of ordinary shares acquired by investor (in shares) | shares | 21,067,300 | |||||
Class B ordinary shares | ||||||
Operations and reorganization | ||||||
Number of votes each share is entitled to | Vote | 3 | |||||
IPO | Class A ordinary shares | ||||||
Operations and reorganization | ||||||
Issuance of shares (in shares) | shares | 19,320,000 | |||||
Proceeds from IPO | $ 306,500,000 | |||||
IPO | Class A ordinary shares | Alibaba | ||||||
Operations and reorganization | ||||||
Number of ordinary shares acquired by investor (in shares) | shares | 6,000,000 | |||||
Weimeng | ||||||
Operations and reorganization | ||||||
Percentage of Direct/Indirect Economic Interest in VIEs | 100.00% | |||||
Weibo Interactive | ||||||
Operations and reorganization | ||||||
Percentage of Direct/Indirect Economic Interest in VIEs | 100.00% | |||||
Weibo HK | ||||||
Operations and reorganization | ||||||
Percentage of Direct/Indirect Economic Interest | 100.00% | |||||
Weibo Technology | ||||||
Operations and reorganization | ||||||
Percentage of Direct/Indirect Economic Interest | 100.00% | |||||
SINA | ||||||
Operations and reorganization | ||||||
Number of limited liability partnerships | Partnership | 2 | |||||
SINA | Weibo Funds, one | ||||||
Operations and reorganization | ||||||
Equity interest percentage owned by parent | 55.00% | |||||
SINA | Weibo Funds, two | ||||||
Operations and reorganization | ||||||
Equity interest percentage owned by parent | 85.00% |
Operations and reorganization41
Operations and reorganization - Assets, Liabilities, Statement of Operations and Cash Flows (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Operations and reorganization | ||||
Allocated expenses from SINA | $ 25,703,000 | $ 24,678,000 | $ 42,360,000 | |
Interest-free loans to the VIE's shareholders | 9,400,000 | 10,000,000 | ||
Aggregate accumulated losses | 54,500,000 | 32,800,000 | ||
Assets and liabilities of the VIEs and their subsidiaries | ||||
Cash, cash equivalents and short-term Investments | 395,954,000 | 335,879,000 | ||
Property and equipment, net | 22,816,000 | 22,850,000 | ||
Intangible assets | 1,100,000 | 1,966,000 | ||
Goodwill | 10,266,000 | 11,117,000 | 11,652,000 | |
Long-term investments | 399,933,000 | 294,679,000 | 63,777,000 | $ 22,255,000 |
Accounts payable | 48,997,000 | 40,456,000 | ||
Accrued and other liabilities | 180,142,000 | 117,040,000 | ||
Deferred revenues | 48,964,000 | 39,091,000 | ||
Due to related parties | 12,188,000 | |||
Results of operations of the VIEs and their subsidiaries | ||||
Net revenues | 655,800,000 | 477,891,000 | 334,172,000 | |
Net income (loss) | 108,027,000 | 34,745,000 | (65,325,000) | |
Cash flows of the VIE and its subsidiary | ||||
Net cash provided by operating activities | 236,244,000 | 181,971,000 | (19,412,000) | |
Net cash used in investing activities | (96,745,000) | (228,310,000) | 13,917,000 | |
Net cash used in financing activities | 3,035,000 | 4,959,000 | 43,663,000 | |
Assets, except for registered capital of VIEs, that can only be used to settle obligations of the respective VIEs | 0 | 0 | ||
Registered capital and non-distributable reserve funds of VIE and its subsidiaries | $ 56,200,000 | 51,900,000 | ||
Term of loan agreements | 10 years | |||
Service fees revenue charged to VIE | $ 335,600,000 | 232,400,000 | 187,800,000 | |
Term of trademark license agreements | 1 year | |||
SINA | ||||
Operations and reorganization | ||||
Allocated expenses from SINA | $ 25,703,000 | 24,678,000 | 42,360,000 | |
Assets and liabilities of the VIEs and their subsidiaries | ||||
Accounts receivable due from SINA | 18,565,000 | |||
Due to related parties | 12,188,000 | |||
Consolidated VIEs | ||||
Operations and reorganization | ||||
Allocated expenses from SINA | 12,300,000 | 8,400,000 | 16,100,000 | |
Assets and liabilities of the VIEs and their subsidiaries | ||||
Cash, cash equivalents and short-term Investments | 57,505,000 | 129,154,000 | ||
Accounts receivable | 115,338,000 | 120,937,000 | ||
Property and equipment, net | 357,000 | 1,277,000 | ||
Intangible assets | 1,100,000 | 1,966,000 | ||
Goodwill | 9,969,000 | 10,821,000 | ||
Prepayment for long-term investments | 144,000 | 1,660,000 | ||
Long-term investments | 49,195,000 | 38,104,000 | ||
Deferred tax assets | 2,312,000 | 1,493,000 | ||
Accounts receivable due from SINA | 12,163,000 | |||
Others | 28,247,000 | 26,838,000 | ||
Total assets | 276,330,000 | 332,250,000 | ||
Accounts payable | 25,850,000 | 18,613,000 | ||
Accrued and other liabilities | 64,879,000 | 47,487,000 | ||
Deferred revenues | 38,313,000 | 29,567,000 | ||
Income tax payable | 8,214,000 | 3,257,000 | ||
Due to related parties | 8,465,000 | |||
Amount due to the subsidiaries of the Group | 171,460,000 | 232,006,000 | ||
Deferred tax liability | 274,000 | 477,000 | ||
Total liabilities | 308,990,000 | 339,872,000 | ||
Results of operations of the VIEs and their subsidiaries | ||||
Net revenues | 530,598,000 | 391,568,000 | 298,767,000 | |
Net income (loss) | (21,758,000) | (10,572,000) | (6,351,000) | |
Cash flows of the VIE and its subsidiary | ||||
Net cash provided by operating activities | (42,556,000) | 158,290,000 | 14,198,000 | |
Net cash used in investing activities | (28,577,000) | (39,965,000) | (9,552,000) | |
Net cash used in financing activities | (1,148,000) | (5,997,000) | ||
Net increase (decrease) in cash and cash equivalents | (72,281,000) | 118,325,000 | (1,351,000) | |
Cost of revenues | ||||
Operations and reorganization | ||||
Allocated expenses from SINA | 11,022,000 | 6,550,000 | 1,124,000 | |
Sales and marketing | ||||
Operations and reorganization | ||||
Allocated expenses from SINA | 1,271,000 | 1,263,000 | 17,417,000 | |
Product development | ||||
Operations and reorganization | ||||
Allocated expenses from SINA | 9,094,000 | 12,981,000 | 17,238,000 | |
General and administrative | ||||
Operations and reorganization | ||||
Allocated expenses from SINA | $ 4,316,000 | $ 3,884,000 | $ 6,581,000 |
Significant Accounting Polici42
Significant Accounting Policies (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Sales and Marketing Expenses | |||
Advertising and promotional expenses | $ 92,200,000 | $ 81,200,000 | $ 71,000,000 |
Operating leases | |||
Allocated rental expenses from SINA | 25,703,000 | 24,678,000 | 42,360,000 |
Long-term investments | |||
Impairment charge | 31,586,000 | 6,608,000 | 2,521,000 |
Impairment charge to AFS securities | $ 4,800,000 | 0 | 0 |
Stock options | |||
Stock-based compensation | |||
Vesting period | 4 years | ||
Service-based restricted share units | |||
Stock-based compensation | |||
Vesting period | 4 years | ||
Rental expense | |||
Operating leases | |||
Allocated rental expenses from SINA | $ 3,900,000 | 3,500,000 | 4,000,000 |
Minimum | |||
Operating leases | |||
Lease period | 1 year | ||
Maximum | |||
Operating leases | |||
Lease period | 5 years | ||
Accounts payable | |||
Basis of presentation | |||
Prior period reclassification adjustment | 37,900,000 | ||
Accrued and other liabilities | |||
Basis of presentation | |||
Prior period reclassification adjustment | (37,900,000) | ||
Advertising and marketing revenues | |||
Cost of revenues | |||
VAT and surcharges (as a percent) | 6.70% | ||
Cultural business construction fees (as a percent) | 3.00% | ||
Taxes on advertising and marketing revenues | $ 49,900,000 | $ 35,300,000 | $ 23,200,000 |
Advertising and marketing revenues | Maximum | |||
Revenue recognition | |||
Period over social display ad arrangements allow customers to place advertisements on particular areas of the Group's platform in particular formats | 3 months | ||
Other revenues | |||
Game-related service | |||
Maximum period for recognition of revenues after purchase of in-game credits | 1 month | ||
Data licensing arrangement term | 1 year |
Significant Accounting Polici43
Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Property and equipment | |||
Depreciation expenses | $ 13.3 | $ 19.5 | $ 21.8 |
Computers and equipment | Minimum | |||
Property and equipment | |||
Estimated useful lives of assets | 3 years | ||
Computers and equipment | Maximum | |||
Property and equipment | |||
Estimated useful lives of assets | 4 years | ||
Furniture and fixtures | |||
Property and equipment | |||
Estimated useful lives of assets | 5 years |
Significant Accounting Polici44
Significant Accounting Policies - Intangible Assets Other Than Goodwill and Foreign Currency (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Foreign currency | |||
Currency translation adjustments | $ 18,898 | $ 7,874 | $ 1,450 |
Minimum | |||
Intangible assets other than goodwill | |||
Estimated useful lives of intangible assets | 2 years | ||
Maximum | |||
Intangible assets other than goodwill | |||
Estimated useful lives of intangible assets | 5 years |
Significant Accounting Polici45
Significant Accounting Policies - Concentration of Risks (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)customerAgency | Dec. 31, 2015USD ($)Agency | Dec. 31, 2014Agency | |
Concentration of risks | |||
Cash, cash equivalents and short-term investments | $ 395,954 | $ 335,879 | |
Current liabilities denominated in RMB | 278,103 | 208,775 | |
Cash, cash equivalents and short-term investments | Concentration of credit risk | China | |||
Concentration of risks | |||
Cash, cash equivalents and short-term investments | $ 393,600 | 334,600 | |
Maximum term of original maturity of time deposits | 12 months | ||
Cash, cash equivalents and short-term investments | Concentration of foreign currency risks | RMB | |||
Concentration of risks | |||
Cash, cash equivalents and short-term investments | $ 335,700 | $ 157,900 | |
Percentage of benchmark derived from specified source | 85.00% | 47.00% | |
Consolidated net revenues benchmark | Customer concentration risk | Alibaba | |||
Concentration of risks | |||
Percentage of benchmark derived from specified source | 9.00% | 30.00% | 32.00% |
Consolidated net accounts receivables benchmark | Concentration of credit risk | Alibaba | |||
Concentration of risks | |||
Percentage of benchmark derived from specified source | 21.00% | 45.00% | |
Consolidated net accounts receivables benchmark | Concentration of credit risk | Customer | |||
Concentration of risks | |||
Percentage of benchmark derived from specified source | 15.00% | 16.00% | |
Number of customers | customer | 1 | ||
Consolidated net accounts receivables benchmark | Concentration of foreign currency risks | RMB | |||
Concentration of risks | |||
Accounts receivable denominated in RMB | $ 115,300 | $ 120,100 | |
Current liabilities | Concentration of foreign currency risks | RMB | |||
Concentration of risks | |||
Current liabilities denominated in RMB | $ 267,800 | $ 197,900 | |
Percentage of benchmark derived from specified source | 96.00% | 95.00% | |
Advertising & Marketing | Consolidated net revenues benchmark | Customer concentration risk | Top 10 advertising agencies | China | |||
Concentration of risks | |||
Number of advertising agencies | Agency | 10 | 10 | 10 |
Percentage of benchmark derived from specified source | 22.00% | 15.00% | 14.00% |
Investment by Alibaba (Details)
Investment by Alibaba (Details) - USD ($) $ in Thousands | Apr. 30, 2014 | Apr. 17, 2014 | Apr. 29, 2013 | Dec. 31, 2014 |
Investment by Alibaba | ||||
Loss on fair value change of investor option liability | $ (46,972) | |||
IPO | ||||
Investment by Alibaba | ||||
Amount invested in Weibo | 301,278 | |||
SINA | ||||
Investment by Alibaba | ||||
Number of shares repurchased (in shares) | 2,923,478 | |||
Payment for repurchase of ordinary shares | $ 42,200 | |||
Deemed contribution from SINA | 61,176 | |||
Alibaba | ||||
Investment by Alibaba | ||||
Amount invested in Weibo | 42,224 | |||
Deemed contribution from Alibaba | 15,300 | |||
Alibaba | ||||
Investment by Alibaba | ||||
Amount invested in Weibo | $ 585,800 | |||
Ownership interest on a fully diluted basis (as a percent) | 18.00% | |||
Maximum percentage of ownership interest to be reached under option granted | 30.00% | 30.00% | ||
Threshold percentage of sale of shares including prior sales considered for expiration of option to increase ownership interest | 25.00% | |||
Loss on fair value change of investor option liability | $ (47,000) | |||
Alibaba | Class A ordinary shares | ||||
Investment by Alibaba | ||||
Number of ordinary shares acquired by investor (in shares) | 29,990,778 | |||
Percentage of discount applied on IPO offering price per share to calculate exercise price of option | 15.00% | |||
Threshold amount of equity valuation considered to calculate exercise price of option | $ 5,500,000 | |||
Alibaba | Class A ordinary shares | IPO | ||||
Investment by Alibaba | ||||
Number of ordinary shares acquired by investor (in shares) | 6,000,000 | |||
Alibaba | SINA | ||||
Investment by Alibaba | ||||
Number of ordinary shares acquired by investor (in shares) | 23,990,778 | |||
Percentage discount to IPO price applied to the shares acquired | 15.00% | |||
Alibaba | SINA | IPO | ||||
Investment by Alibaba | ||||
Percentage discount to IPO price applied to the shares acquired | 15.00% | |||
Alibaba | SINA | Class A ordinary shares | ||||
Investment by Alibaba | ||||
Number of ordinary shares acquired by investor (in shares) | 21,067,300 | |||
Alibaba | SINA | Class A ordinary shares | Private placement | ||||
Investment by Alibaba | ||||
Number of ordinary shares acquired by investor (in shares) | 2,923,478 | |||
Percentage of discount applied on IPO offering price per share to calculate exercise price of option | 15.00% |
Cash, Cash Equivalents and Sh47
Cash, Cash Equivalents and Short-term Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Cash and cash equivalents: | ||||
Cash | $ 364,766 | $ 186,347 | ||
Cash equivalents: | ||||
Bank time deposits | 51,093 | |||
Total cash and cash equivalents | 364,766 | 237,440 | $ 284,865 | $ 249,099 |
Short-term investments: | ||||
Bank time deposits | 31,188 | 98,439 | ||
Total cash, cash equivalents and short-term investments | 395,954 | 335,879 | ||
Interest income | $ 7,600 | $ 5,500 | $ 8,300 |
Long-term Investments (Details)
Long-term Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Long-term investments | |||
Balance at the beginning of the year | $ 294,679 | $ 63,777 | $ 22,255 |
Investments made | 152,091 | 252,256 | 47,666 |
Loss from equity method investment | (130) | (6) | (5) |
Impairment on investments | (31,586) | (6,608) | (2,521) |
Disposal of investments | (11,010) | (13,134) | |
Transfer from long-term investments to a wholly owned subsidiary | (1,189) | ||
Unrealized loss | (2,557) | (198) | (2,067) |
Currency translation adjustment | (1,554) | (1,408) | (362) |
Balance at the end of year | 399,933 | 294,679 | 63,777 |
Investment related impairment | 40,161 | 8,005 | 2,521 |
Write-off on an online-to-offline business, included in investment impairment | 19,000 | ||
Write-off on an employment-oriented social company, included in investment impairment | 10,500 | ||
Cost Method | |||
Long-term investments | |||
Balance at the beginning of the year | 281,707 | 50,594 | 22,255 |
Investments made | 147,767 | 252,256 | 32,412 |
Impairment on investments | (31,586) | (6,608) | (2,521) |
Disposal of investments | (6,010) | (13,134) | |
Transfer from long-term investments to a wholly owned subsidiary | (1,189) | ||
Currency translation adjustment | (1,548) | (1,401) | (363) |
Balance at the end of year | 390,330 | 281,707 | 50,594 |
Equity Method | |||
Long-term investments | |||
Balance at the beginning of the year | 141 | 154 | |
Investments made | 4,324 | 158 | |
Loss from equity method investment | (130) | (6) | (5) |
Currency translation adjustment | (6) | (7) | 1 |
Balance at the end of year | 4,329 | 141 | 154 |
Available-for-Sale Securities | |||
Long-term investments | |||
Balance at the beginning of the year | 12,831 | 13,029 | |
Investments made | 15,096 | ||
Disposal of investments | (5,000) | ||
Unrealized loss | (2,557) | (198) | (2,067) |
Balance at the end of year | 5,274 | $ 12,831 | $ 13,029 |
Impairment charged to net income | 4,800 | ||
Yixia | |||
Long-term investments | |||
Investments made | 120,000 | ||
Aggregate equity investment | 190,000 | ||
A company which primarily provides online literature | |||
Long-term investments | |||
Aggregate equity investment | $ 14,400 |
Acquisitions - Gametree (Detail
Acquisitions - Gametree (Details) $ in Thousands | Jun. 30, 2015USD ($)fund | Oct. 31, 2014USD ($) | Dec. 31, 2016USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) |
Acquisitions | |||||
Goodwill | $ 10,266 | $ 11,117 | $ 11,652 | ||
Transfer of Equity Interest in Weibo Funds | SINA | |||||
Acquisitions | |||||
Number of funds acquired | fund | 2 | ||||
Consideration for transfer of equity interest | $ 22,000 | ||||
Transfer of Equity Interest in Weibo Funds | SINA | Weibo Funds, one | |||||
Acquisitions | |||||
Percentage of equity interest transferred to Group | 55.00% | ||||
Transfer of Equity Interest in Weibo Funds | SINA | Weibo Funds, two | |||||
Acquisitions | |||||
Percentage of equity interest transferred to Group | 85.00% | ||||
Gametree | |||||
Acquisitions | |||||
Cash consideration | $ 3,062 | ||||
Equity interest acquired (as a percent) | 84.00% | ||||
Non-controlling interests | $ 292 | ||||
Total consideration | 3,354 | ||||
Tangible assets | 1,518 | ||||
Identifiable intangible assets acquired | 1,688 | ||||
Liabilities assumed | (3,692) | ||||
Goodwill | 3,840 | ||||
Total consideration | $ 3,354 | ||||
Gametree | Game platform technology | |||||
Acquisitions | |||||
Estimated useful life of identifiable intangible assets acquired | 4 years 3 months 18 days | ||||
Identifiable intangible assets acquired | $ 1,700 |
Acquisitions - Changes in the G
Acquisitions - Changes in the Group's Goodwill (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Changes in the Group's goodwill by segment | ||
Balance at the beginning of the year | $ 11,117 | $ 11,652 |
Currency translation adjustment | (851) | (535) |
Balance at the end of the year | 10,266 | 11,117 |
Impairment of goodwill | 0 | |
Advertising & Marketing | ||
Changes in the Group's goodwill by segment | ||
Balance at the beginning of the year | 0 | 0 |
Currency translation adjustment | 0 | 0 |
Balance at the end of the year | 0 | 0 |
Other | ||
Changes in the Group's goodwill by segment | ||
Balance at the beginning of the year | 11,117 | 11,652 |
Currency translation adjustment | (851) | (535) |
Balance at the end of the year | $ 10,266 | $ 11,117 |
Acquisitions - Future Amortizat
Acquisitions - Future Amortization Expenses (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Acquisitions | |||
Intangible assets, net | $ 1,100 | $ 1,966 | |
Amortization expense | 700 | $ 1,500 | $ 1,200 |
Future estimated amortization expenses | |||
2,017 | 616 | ||
2,018 | 484 | ||
2019 and thereafter | 0 | ||
Total expected amortization expense | $ 1,100 |
Stock-Based Compensation - Ince
Stock-Based Compensation - Incentive Plan Details (Details) - shares | Jan. 01, 2015 | Mar. 31, 2014 | Aug. 31, 2010 | Dec. 31, 2015 | Dec. 31, 2014 |
Stock-based compensation | |||||
Number of additional shares for the plan | 21,684,000 | 1,000,000 | |||
2010 Plan | |||||
Stock-based compensation | |||||
Term of share incentive plan | 10 years | ||||
Ordinary shares reserved for issuance | 35,000,000 | ||||
Amount that maximum number of ordinary shares available for issuance is reduced for every share issued pursuant to share option or share appreciation right | 1 | ||||
Amount that maximum number of ordinary shares available for issuance is reduced for every share issued as restricted shares or pursuant to restricted share units | 1.75 | ||||
2014 Plan | |||||
Stock-based compensation | |||||
Term of share incentive plan | 10 years | ||||
Ordinary shares reserved for issuance | 4,600,000 | ||||
Number of additional shares for the plan | 1,000,000 | ||||
One-time percentage increase on January 1, 2015 for maximum aggregate number of shares which may be issued (as a percent) | 10.00% |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Stock-based compensation | |||
Stock-based compensation expense | $ 36,902 | $ 26,399 | $ 13,779 |
Amortization period | 4 years | ||
Cost of revenues | |||
Stock-based compensation | |||
Stock-based compensation expense | $ 2,616 | 1,196 | 755 |
Sales and marketing | |||
Stock-based compensation | |||
Stock-based compensation expense | 5,357 | 3,209 | 1,583 |
Product development | |||
Stock-based compensation | |||
Stock-based compensation expense | 15,076 | 10,210 | 4,392 |
General and administrative | |||
Stock-based compensation | |||
Stock-based compensation expense | $ 13,853 | $ 11,784 | $ 7,049 |
Stock-Based Compensation - Numb
Stock-Based Compensation - Number of Shares Available for Issuance (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||
Mar. 31, 2014 | Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Number of shares available for issuance | |||||
Outstanding number of shares available for issuance at the beginning of the year (in shares) | 20,217,000 | 2,738,000 | 4,648,000 | ||
Addition (in shares) | 21,684,000 | 1,000,000 | |||
Granted (in shares) | (1,917,000) | (4,851,000) | (2,951,000) | ||
Cancelled/expired/forfeited (in shares) | 578,000 | 646,000 | 41,000 | ||
Outstanding number of shares available for issuance at the end of the year (in shares) | 18,878,000 | 20,217,000 | 2,738,000 | 4,648,000 | |
Aggregate Intrinsic Value | |||||
Fair value per ordinary share (in dollars per share) | $ 40.60 | $ 19.50 | $ 14.24 | ||
2014 Plan | |||||
Number of shares available for issuance | |||||
Addition (in shares) | 1,000,000 | ||||
Stock options | |||||
Options Outstanding | |||||
Outstanding at the beginning of the year (in shares) | 6,303,000 | 14,330,000 | 18,561,000 | ||
Exercise (in shares) | (3,625,000) | (7,309,000) | (3,697,000) | ||
Cancelled/expired/forfeited (in shares) | (91,000) | (718,000) | (534,000) | ||
Outstanding at the end of the year (in shares) | 2,587,000 | 6,303,000 | 14,330,000 | 18,561,000 | |
Vested and expected to vest at the end of the year (in shares) | 2,572,000 | 6,237,000 | |||
Exercisable at the end of the year (in shares) | 2,433,000 | 5,649,000 | |||
Weighted Average Exercise Price | |||||
Outstanding at the beginning of the year (in dollars per share) | $ 1.26 | $ 1.28 | $ 1.17 | ||
Exercise (in dollars per share) | 1.10 | 1.11 | 0.52 | ||
Cancelled/expired/forfeited (in dollars per share) | 3.37 | 3.22 | 2.84 | ||
Outstanding at the end of the year (in dollars per share) | 1.41 | 1.26 | $ 1.28 | $ 1.17 | |
Vested and expected to vest at the end of the year (in dollars per share) | 1.40 | 1.24 | |||
Exercisable at the end of the year (in dollars per share) | $ 1.28 | $ 1.01 | |||
Weighted Average Remaining Contractual Life (in years) | |||||
Outstanding at the end of the year | 1 year 7 months 6 days | 2 years 4 months 24 days | 3 years 2 months 12 days | 4 years 3 months 18 days | |
Vested and expected to vest at the end of the year | 1 year 7 months 6 days | 2 years 4 months 24 days | |||
Exercisable at the end of the year | 1 year 4 months 24 days | 2 years 2 months 12 days | |||
Aggregate Intrinsic Value | |||||
Outstanding at the end of the year | $ 101,403 | $ 114,975 | $ 185,684 | $ 239,975 | |
Vested and expected to vest at the end of the year | 100,819 | 113,909 | |||
Exercisable at the end of the year | 95,678 | 104,473 | |||
Total intrinsic value of options exercised | 129,300 | 106,200 | 65,700 | ||
Cash received from the exercise of stock option | 4,200 | 7,800 | $ 1,500 | ||
Unrecognized compensation cost | $ 1,100 | $ 3,900 | |||
Weighted-average period of unrecognized compensation cost | 9 months 18 days | ||||
Stock options | 2014 Plan | |||||
Options Outstanding | |||||
Granted (in shares) | 0 | 0 | 0 | ||
Restricted share units | |||||
Number of shares available for issuance | |||||
Restricted shares units granted (in shares) | 1,900,000 | 4,900,000 | 3,000,000 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Option Activities (Details) - Stock options - $ / shares shares in Thousands | 12 Months Ended | |
Dec. 31, 2016 | Dec. 31, 2015 | |
Range of Exercise Prices | ||
Options Outstanding (in shares) | 2,587 | 6,303 |
Weighted Average Exercise Price (in dollars per share) | $ 1.41 | $ 1.26 |
Options Exercisable (in shares) | 2,433 | 5,649 |
Weighted Average Exercise Price (in dollars per share) | $ 1.28 | $ 1.01 |
Weighted Average Remaining Contractual Life (in years) | 1 year 7 months 6 days | 2 years 2 months 12 days |
$0.36 - 0.41 | ||
Range of Exercise Prices | ||
Exercise prices, outstanding stock option awards, low end of range (in dollars per share) | $ 0.36 | $ 0.36 |
Exercise prices, outstanding stock option awards, high end of range (in dollars per share) | $ 0.41 | $ 0.41 |
Options Outstanding (in shares) | 1,639 | 4,167 |
Weighted Average Exercise Price (in dollars per share) | $ 0.36 | $ 0.36 |
Options Exercisable (in shares) | 1,639 | 4,167 |
Weighted Average Exercise Price (in dollars per share) | $ 0.36 | $ 0.36 |
Weighted Average Remaining Contractual Life (in years) | 8 months 12 days | 1 year 8 months 12 days |
$0.96 - 1.80 | ||
Range of Exercise Prices | ||
Exercise prices, outstanding stock option awards, low end of range (in dollars per share) | $ 0.96 | $ 0.96 |
Exercise prices, outstanding stock option awards, high end of range (in dollars per share) | $ 1.80 | $ 1.80 |
Options Outstanding (in shares) | 79 | 406 |
Weighted Average Exercise Price (in dollars per share) | $ 0.97 | $ 1.24 |
Options Exercisable (in shares) | 79 | 406 |
Weighted Average Exercise Price (in dollars per share) | $ 0.97 | $ 1.24 |
Weighted Average Remaining Contractual Life (in years) | 1 year 2 months 12 days | 2 years 3 months 18 days |
$3.25 - $3.36 | ||
Range of Exercise Prices | ||
Exercise prices, outstanding stock option awards, low end of range (in dollars per share) | $ 3.25 | $ 3.25 |
Exercise prices, outstanding stock option awards, high end of range (in dollars per share) | $ 3.36 | $ 3.36 |
Options Outstanding (in shares) | 341 | 682 |
Weighted Average Exercise Price (in dollars per share) | $ 3.33 | $ 3.32 |
Options Exercisable (in shares) | 338 | 519 |
Weighted Average Exercise Price (in dollars per share) | $ 3.33 | $ 3.33 |
Weighted Average Remaining Contractual Life (in years) | 2 years 6 months | 3 years 6 months |
$3.43 - $3.50 | ||
Range of Exercise Prices | ||
Exercise prices, outstanding stock option awards, low end of range (in dollars per share) | $ 3.43 | $ 3.43 |
Exercise prices, outstanding stock option awards, high end of range (in dollars per share) | $ 3.50 | $ 3.50 |
Options Outstanding (in shares) | 528 | 1,048 |
Weighted Average Exercise Price (in dollars per share) | $ 3.48 | $ 3.48 |
Options Exercisable (in shares) | 377 | 557 |
Weighted Average Exercise Price (in dollars per share) | $ 3.48 | $ 3.48 |
Weighted Average Remaining Contractual Life (in years) | 3 years 8 months 12 days | 4 years 7 months 6 days |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Share Units (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Performance-based restricted share units | |||
Shares Granted | |||
Awarded (in shares) | 111,000 | 0 | |
Cancelled (in shares) | (3,000) | ||
Outstanding at the end of the year (in shares) | 108,000 | ||
Weighted-Average Grant Date Fair Value | |||
Awarded (in dollars per share) | $ 27 | ||
Cancelled (in dollars per share) | 27 | ||
Outstanding at the end of the year (in dollars per share) | $ 27 | ||
Unrecognized compensation cost | $ 0.3 | ||
Service-based restricted share units | |||
Shares Granted | |||
Outstanding at the beginning of the year (in shares) | 6,501,000 | 3,507,000 | 800,000 |
Awarded (in shares) | 1,806,000 | 4,851,000 | 2,951,000 |
Vested (in shares) | (2,274,000) | (1,211,000) | (203,000) |
Cancelled (in shares) | (575,000) | (646,000) | (41,000) |
Outstanding at the end of the year (in shares) | 5,458,000 | 6,501,000 | 3,507,000 |
Weighted-Average Grant Date Fair Value | |||
Outstanding at the beginning of the year (in dollars per share) | $ 13.98 | $ 16.44 | $ 13.19 |
Awarded (in dollars per share) | 24.94 | 12.41 | 17.11 |
Vested (in dollars per share) | 14.73 | 14.69 | 13.19 |
Cancelled (in dollars per share) | 14.58 | 14.18 | 17.23 |
Outstanding at the end of the year (in dollars per share) | $ 17.23 | $ 13.98 | $ 16.44 |
Unrecognized compensation cost | $ 76.8 | ||
Expected weighted-average recognition period for unrecognized compensation cost | 2 years 9 months 18 days | ||
Total fair value vested | $ 33.5 | $ 17.8 | $ 2.7 |
Other Balance Sheet Component57
Other Balance Sheet Components - Accounts Receivable (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Accounts receivable, net: | |||
Total gross amount | $ 122,583,000 | $ 121,605,000 | |
Allowance for doubtful accounts: | |||
Balance at the beginning of the year | (1,375,000) | (2,440,000) | $ (3,242,000) |
Reversal (additional provision) charged to expenses, net | (7,787,000) | 368,000 | (2,138,000) |
Write-off | 2,633,000 | 697,000 | 2,940,000 |
Balance at the end of the year | (6,529,000) | (1,375,000) | $ (2,440,000) |
Accounts receivable, net | 116,054,000 | 120,230,000 | |
Alibaba | |||
Accounts receivable, net: | |||
Total gross amount | 24,293,000 | 54,052,000 | |
Allowance for doubtful accounts: | |||
Balance at the beginning of the year | 0 | ||
Balance at the end of the year | 0 | 0 | |
Accounts receivable, net | 24,293,000 | 54,052,000 | |
Other related parties | |||
Accounts receivable, net: | |||
Total gross amount | 31,589,000 | 33,961,000 | |
Allowance for doubtful accounts: | |||
Balance at the beginning of the year | 0 | ||
Balance at the end of the year | (1,483,000) | 0 | |
Accounts receivable, net | 30,106,000 | 33,961,000 | |
Third parties | |||
Accounts receivable, net: | |||
Total gross amount | 66,701,000 | 33,592,000 | |
Allowance for doubtful accounts: | |||
Balance at the beginning of the year | (1,375,000) | ||
Balance at the end of the year | (5,046,000) | (1,375,000) | |
Accounts receivable, net | $ 61,655,000 | $ 32,217,000 |
Other Balance Sheet Component58
Other Balance Sheet Components - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Prepaid expenses and other current assets: | ||
Rental and other deposits | $ 3,965 | $ 3,636 |
Prepayment for investments | 24,953 | 25,574 |
Advertising prepayment | 5,267 | 3,531 |
Prepayment to outsourced service providers | 4,043 | 5,422 |
Amounts deposited by users | 21,203 | |
Others | 7,233 | 4,132 |
Prepaid expenses and other current assets | $ 66,664 | $ 42,295 |
Other Balance Sheet Component59
Other Balance Sheet Components - Property and Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Property and equipment, net: | ||
Property and equipment, gross | $ 98,801 | $ 101,515 |
Less: Accumulated depreciation | (75,985) | (78,665) |
Property and equipment, net | 22,816 | 22,850 |
Computers and equipment | ||
Property and equipment, net: | ||
Property and equipment, gross | 94,170 | 93,947 |
Leasehold improvements | ||
Property and equipment, net: | ||
Property and equipment, gross | 2,054 | 4,795 |
Furniture and fixtures | ||
Property and equipment, net: | ||
Property and equipment, gross | 922 | 1,309 |
Others | ||
Property and equipment, net: | ||
Property and equipment, gross | $ 1,655 | $ 1,464 |
Other Balance Sheet Component60
Other Balance Sheet Components - Accrued and other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Accrued and other liabilities: | ||
Payroll and welfare | $ 33,786 | $ 25,972 |
Marketing expenses | 40,968 | 30,035 |
Payroll withholding taxes | 3,547 | 3,547 |
Sales rebates | 31,598 | 19,593 |
Professional fees | 4,255 | 3,127 |
VAT and other tax payable | 35,728 | 23,071 |
Payable to other service providers | 1,457 | 2,673 |
Amounts due to users | 21,203 | |
Others | 7,600 | 9,022 |
Total accrued and other liabilities | $ 180,142 | $ 117,040 |
Income Taxes (Details)
Income Taxes (Details) $ / shares in Units, $ in Thousands | Feb. 22, 2008 | Dec. 31, 2016USD ($)jurisdiction$ / shares | Dec. 31, 2015USD ($)$ / shares | Dec. 31, 2014USD ($) | Dec. 31, 2013 | Dec. 31, 2012 | Dec. 31, 2011 | Dec. 31, 2010 | Dec. 31, 2009 | Dec. 31, 2008 |
Income taxes | ||||||||||
Number of taxable jurisdictions | jurisdiction | 2 | |||||||||
Components of loss before income taxes | ||||||||||
Income (Loss) before income tax expenses | $ 109,980 | $ 36,780 | $ (64,340) | |||||||
Loss from non-China operations | (60,193) | (28,016) | (54,073) | |||||||
Income (Loss) from China operations | 170,173 | 64,796 | (10,267) | |||||||
Income tax expense applicable to China operations | $ 4,316 | $ 2,591 | $ 1,128 | |||||||
Effective tax rate for China operations (as a percent) | 2.50% | 4.00% | (11.00%) | |||||||
Loss from the change in fair value of investor option liability | $ 46,972 | |||||||||
Loss from investment impairments | $ (31,586) | $ (6,608) | $ (2,521) | |||||||
Income tax rate (as a percent) | 25.00% | 25.00% | 25.00% | |||||||
Net operating loss carry forwards | $ 129,300 | $ 160,500 | ||||||||
Composition of income tax expenses for China operations | ||||||||||
Deferred tax expenses (benefits) | (4,630) | (977) | $ 866 | |||||||
Current income tax expenses | 8,946 | 3,568 | 262 | |||||||
Income tax expenses | $ 4,316 | $ 2,591 | $ 1,128 | |||||||
Reconciliation of the statutory tax rate to the effective tax rate for China operations | ||||||||||
Statutory EIT rate (as a percent) | 25.00% | 25.00% | 25.00% | |||||||
Effect on tax holiday (as a percent) | (29.60%) | (24.20%) | ||||||||
Permanent differences (as a percent) | 1.20% | 0.50% | 2.20% | |||||||
Change in valuation allowance (as a percent) | 5.90% | 2.70% | (38.20%) | |||||||
Effective tax rate for China operations (as a percent) | 2.50% | 4.00% | (11.00%) | |||||||
Deferred tax assets: | ||||||||||
Net operating loss carry forwards | $ 32,158 | $ 41,604 | ||||||||
Less: valuation allowance | (32,158) | (41,604) | ||||||||
Depreciation, accounts receivable, accrued and other liabilities | 13,957 | 4,550 | ||||||||
Less: valuation allowance | (8,576) | (3,057) | ||||||||
Net deferred tax assets | 5,381 | 1,493 | ||||||||
Valuation allowance on deferred tax assets | 40,700 | 44,700 | ||||||||
Deferred tax liabilities: | ||||||||||
Acquired intangible assets | 274 | 477 | ||||||||
Depreciation | 362 | 295 | ||||||||
Others | 181 | 566 | ||||||||
Total deferred tax liabilities | $ 817 | 1,338 | ||||||||
Historical rate for valuing deferred tax assets (as a percent) | 25.00% | |||||||||
Weibo Technology | ||||||||||
Reconciliation of the statutory tax rate to the effective tax rate for China operations | ||||||||||
Effect of tax exemption | $ 50,400 | $ 15,700 | ||||||||
Effect of tax exemption on basic net income per share (USD per share) | $ / shares | $ 0.23 | $ 0.08 | ||||||||
Non- China | ||||||||||
Components of loss before income taxes | ||||||||||
Loss from the change in fair value of investor option liability | $ 47,000 | |||||||||
Loss from investment impairments | $ 23,800 | |||||||||
Cayman Islands | ||||||||||
Components of loss before income taxes | ||||||||||
Withholding income tax on dividends distributed by subsidiaries to its immediate holding entity outside China (as a percent) | 0.00% | |||||||||
Hong Kong | ||||||||||
Components of loss before income taxes | ||||||||||
Income tax rate (as a percent) | 16.50% | 16.50% | 16.50% | |||||||
Net operating loss carry forwards | $ 1,400 | |||||||||
Reconciliation of the statutory tax rate to the effective tax rate for China operations | ||||||||||
Statutory EIT rate (as a percent) | 16.50% | 16.50% | 16.50% | |||||||
China | ||||||||||
Components of loss before income taxes | ||||||||||
Income tax rate (as a percent) | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | |
Withholding income tax on dividends distributed by subsidiaries to its immediate holding entity outside China (as a percent) | 10.00% | |||||||||
Maximum percentage of withholding income tax on dividends distributed by subsidiaries to its immediate holding entity in Hong Kong | 5.00% | |||||||||
Percentage of ownership interests held by foreign investors | 25.00% | |||||||||
Percentage of withholding income tax on dividends distributed by PRC subsidiaries to its immediate holding company in Hong Kong | 5.00% | |||||||||
Reconciliation of the statutory tax rate to the effective tax rate for China operations | ||||||||||
Statutory EIT rate (as a percent) | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | 25.00% | |
China | Software enterprise | ||||||||||
Components of loss before income taxes | ||||||||||
Period of income tax exemption | 2 years | |||||||||
Reduction in preferential tax rate (as a percent) | 50.00% | |||||||||
Preferential statutory rate (as a percent) | 12.50% | |||||||||
Period of reduced preferential income tax rate | 3 years |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Related party transactions | |||
Costs and expenses allocated from SINA | $ 25,703,000 | $ 24,678,000 | $ 42,360,000 |
Interest expense on amount due to SINA | 0 | 0 | 2,838,000 |
Repayment of amount due to SINA | 2,863,000 | 269,042,000 | |
Related party outstanding balance: | |||
Due to related parties | 12,188,000 | ||
SINA | |||
Related party transactions | |||
Revenue billed through SINA | 39,285,000 | 22,114,000 | 4,057,000 |
Deemed contribution from SINA | 61,176,000 | ||
Costs and expenses allocated from SINA | 25,703,000 | 24,678,000 | 42,360,000 |
Interest expense on amount due to SINA | 2,838,000 | ||
Repayment of amount due to SINA | 2,863,000 | 276,614,000 | |
Other costs and expenses billed by SINA | 20,300,000 | 29,400,000 | 15,100,000 |
Related party outstanding balance: | |||
Accounts receivable due from related parties | 18,565,000 | ||
Due to related parties | 12,188,000 | ||
SINA | Transfer of Equity Interest in Weibo Funds | |||
Related party transactions | |||
Legal transfer of investee and recognition of due to SINA | 22,565,000 | ||
Alibaba | |||
Related party transactions | |||
Advertising and marketing revenues from related party | 57,908,000 | 143,650,000 | 107,587,000 |
Deemed contribution from Alibaba | 15,300,000 | ||
Services provided by Alibaba | 13,988,000 | 4,515,000 | 128,000 |
Related party outstanding balance: | |||
Accounts receivable due from related parties | 24,293,000 | 54,052,000 | |
Alibaba | Strategic cooperation with Alibaba | |||
Related party transactions | |||
Advertising and marketing revenues from related party | 137,400,000 | 107,600,000 | |
Other related parties | |||
Related party transactions | |||
Advertising and marketing revenues from related party | 45,600,000 | 29,200,000 | 27,600,000 |
Related party outstanding balance: | |||
Other revenues from related party | 600,000 | 2,100,000 | 1,500,000 |
Amount of promotional services from related parties | 10,600,000 | 7,800,000 | $ 11,200,000 |
Due from related parties | 30,100,000 | 33,900,000 | |
Due to related parties | $ 9,300,000 | $ 8,000,000 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
China Contribution Plan | |||
Employee Benefit Plans | |||
Employer contribution under China Contribution Plan | $ 31.4 | $ 29.7 | $ 27.2 |
Net Income (Loss) Per Share (De
Net Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Anti-dilutive share | |||
Number of preferred shares included in the calculation of diluted net income (loss) per share | 0 | 0 | 0 |
Numerator: | |||
Net income (loss) attributable to Weibo | $ 108,027 | $ 34,745 | $ (65,325) |
Denominator: | |||
Weighted average ordinary shares outstanding (in shares) | 214,745,000 | 208,163,000 | 186,878,000 |
Basic net income (loss) per share attributable to Weibo (in dollars per share) | $ 0.50 | $ 0.17 | $ (0.35) |
Numerator: | |||
Net income (loss) attributable for calculating diluted net loss per share | $ 108,027 | $ 34,745 | $ (65,325) |
Denominator: | |||
Weighted average ordinary shares outstanding (in shares) | 214,745,000 | 208,163,000 | 186,878,000 |
Weighted average ordinary shares equivalents: | |||
Effects of dilutive securities (in shares) | 8,100,000 | 9,800,000 | |
Shares used in computing diluted net income (loss) per share attributable to Weibo (in shares) | 222,859,000 | 217,918,000 | 186,878,000 |
Diluted net income (loss) per share attributable to Weibo (in dollars per share) | $ 0.48 | $ 0.16 | $ (0.35) |
Stock options | |||
Weighted average ordinary shares equivalents: | |||
Effects of dilutive securities (in shares) | 4,334,000 | 8,572,000 | |
Restricted share units | |||
Weighted average ordinary shares equivalents: | |||
Effects of dilutive securities (in shares) | 3,780,000 | 1,183,000 | |
Options and RSUs | |||
Anti-dilutive share | |||
Anti-dilutive share excluded from the calculation of diluted net income (loss) per share | 17,800,000 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)segment | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Summary information by segment | |||
Number of principal business segments | segment | 2 | ||
Revenues | $ 655,800 | $ 477,891 | $ 334,172 |
Advertising & Marketing | |||
Summary information by segment | |||
Revenues | 570,982 | 402,415 | 264,782 |
Other | |||
Summary information by segment | |||
Revenues | $ 84,818 | $ 75,476 | $ 69,390 |
Profit Appropriation and Rest66
Profit Appropriation and Restricted Net Assets (Details) $ in Millions | 12 Months Ended | |
Dec. 31, 2016USD ($)fund | Dec. 31, 2015USD ($) | |
Profit Appropriation and Restricted Net Assets | ||
Minimum percentage of after-tax profit transferred by Chinese subsidiaries to general reserve fund | 10.00% | |
Maximum percentage criteria for appropriation of after-tax profit of Chinese subsidiaries to general reserve fund | 50.00% | |
Number of reserve funds except general reserve fund, appropriation at the entity's discretion | fund | 2 | |
Minimum percentage of after-tax profit transferred by VIEs to statutory reserve fund | 10.00% | |
Maximum percentage criteria for in appropriation of after-tax profit by VIEs to certain statutory reserve funds | 50.00% | |
Reserves made to non-distributable reserve fund (in dollars) | $ 28 | $ 7.1 |
Net assets subject to restriction for the Group (in dollars) | $ 231.5 | |
Percent of restricted net assets of total consolidated net assets | 31.00% |
Financial Instruments - Fair Va
Financial Instruments - Fair Value Hierarchy (Details) - Financial instruments measured on a recurring basis - USD ($) $ in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Fair Value of Financial Instruments | ||
Bank time deposits | $ 31,188 | $ 149,532 |
Available-for-sale securities | 5,274 | 12,831 |
Total | 36,462 | 162,363 |
Quoted Prices in Active Market for Identical Assets (Level 1) | ||
Fair Value of Financial Instruments | ||
Available-for-sale securities | 5,274 | 12,831 |
Total | 5,274 | 12,831 |
Significant Other Observable Inputs (Level 2) | ||
Fair Value of Financial Instruments | ||
Bank time deposits | 31,188 | 149,532 |
Total | $ 31,188 | $ 149,532 |
Financial Instruments -Recurrin
Financial Instruments -Recurring Basis (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Mar. 31, 2014 | |
Key inputs used in investor option liability valuation | ||||
Impairment loss for available-for-sale investments | $ 4,800,000 | $ 0 | $ 0 | |
Loss on fair value change of investor option liability | (46,972,000) | |||
Financial instruments measured on a recurring basis | ||||
Key inputs used in investor option liability valuation | ||||
Impairment loss for available-for-sale investments | $ 4,800,000 | $ 0 | 0 | |
Financial instruments measured on a recurring basis | Investor option liability | ||||
Key inputs used in investor option liability valuation | ||||
Investor option liability | $ 76,500,000 | |||
Loss on fair value change of investor option liability | $ (47,000,000) | |||
Financial instruments measured on a recurring basis | Significant Unobservable Inputs (Level 3) | Alibaba | ||||
Key inputs used in investor option liability valuation | ||||
Percentage of ownership interest in subsidiary to be reached if fully exercised | 30.00% |
Financial Instruments - Non-rec
Financial Instruments - Non-recurring Basis (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Reconciliation of the fair value measurements using significant unobservable inputs | |||
Investment related impairment | $ 40,161 | $ 8,005 | $ 2,521 |
Non-recurring | |||
Reconciliation of the fair value measurements using significant unobservable inputs | |||
Investment related impairment | 35,400 | 8,000 | $ 2,500 |
Non-recurring | Certain investments under cost method and equity method were measured using significant unobservable inputs | |||
Reconciliation of the fair value measurements using significant unobservable inputs | |||
Fair value of investments | $ 0 | $ 0 | |
Significant Unobservable Inputs (Level 3) | Non-recurring | Minimum | |||
Reconciliation of the fair value measurements using significant unobservable inputs | |||
Discount rate (as a percent) | 20.00% | ||
Significant Unobservable Inputs (Level 3) | Non-recurring | Maximum | |||
Reconciliation of the fair value measurements using significant unobservable inputs | |||
Discount rate (as a percent) | 22.00% |
Commitments and Contingencies70
Commitments and Contingencies (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016USD ($)item | Dec. 31, 2015USD ($) | Dec. 31, 2014USD ($) | |
Commitments and Contingencies | |||
Lease expense | $ 14,400 | $ 15,500 | $ 14,900 |
Operating lease commitments | |||
Total | 32,804 | ||
Less than One Year | 7,217 | ||
One to Three Years | 13,127 | ||
Three to Five Years | 12,460 | ||
More than Five Years | 0 | ||
Purchase commitments | |||
Total | 227,247 | ||
Less than One Year | 185,615 | ||
One to Three Years | 41,517 | ||
Three to Five Years | 115 | ||
More than Five Years | $ 0 | ||
Number of claims, lawsuits, investigations and proceedings, including unasserted claims that are probable to be assessed, are likely to have, a material change on the Company's financial position results of operations or cash flow | item | 0 |
Additional Information-Conden71
Additional Information-Condensed Financial Statements of Weibo Corporation - Balance Sheets (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | Dec. 31, 2013 | |
Additional Information | ||||
Minimum percentage of after-tax profit to reserve fund | 10.00% | |||
Current assets: | ||||
Cash and cash equivalents | $ 364,766 | $ 237,440 | $ 284,865 | $ 249,099 |
Short-term investments | 31,188 | 98,439 | ||
Prepaid expenses and other current assets | 66,664 | 42,295 | ||
Total current assets | 597,237 | 498,404 | ||
Total assets | 1,036,944 | 839,189 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
Accrued and other liabilities | 180,142 | 117,040 | ||
Long-term Liabilities | 1,483 | 2,385 | ||
Total liabilities | 279,586 | 211,160 | ||
Commitments and contingencies | ||||
Shareholders' equity: | ||||
Ordinary shares: $0.00025 par value; 2,400,000 and 2,400,000 shares (including 1,800,000 Class A ordinary shares, 200,000 Class B ordinary shares and 400,000 shares to be designated) authorized; 212,177 and 218,076 shares (including 109,155 Class A ordinary shares and 108,921 Class B ordinary shares) issued and outstanding as of December 31, 2015 and 2016, respectively. | 55 | 53 | ||
Additional paid-in capital | 979,805 | 938,922 | ||
Accumulated other comprehensive loss | (26,994) | (10,635) | ||
Accumulated deficit | (199,641) | (307,668) | ||
Total Weibo shareholders' equity | 753,225 | 620,672 | ||
Total liabilities and shareholders' equity | 1,036,944 | 839,189 | ||
Weibo Corporation | ||||
Current assets: | ||||
Cash and cash equivalents | 7,235 | 60,810 | $ 229,950 | $ 182,871 |
Short-term investments | 30,401 | 98,284 | ||
Prepaid expenses and other current assets | 5,682 | 5,905 | ||
Total current assets | 43,318 | 164,999 | ||
Long-term investments | 349,502 | 256,059 | ||
Investment in subsidiaries, VIE and VIE's subsidiaries | 367,114 | 210,325 | ||
Amount due from SINA | 89 | 1,002 | ||
Total assets | 760,023 | 632,385 | ||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||
Accrued and other liabilities | 6,132 | 10,666 | ||
Long-term Liabilities | 666 | 1,047 | ||
Total liabilities | 6,798 | 11,713 | ||
Commitments and contingencies | ||||
Shareholders' equity: | ||||
Ordinary shares: $0.00025 par value; 2,400,000 and 2,400,000 shares (including 1,800,000 Class A ordinary shares, 200,000 Class B ordinary shares and 400,000 shares to be designated) authorized; 212,177 and 218,076 shares (including 109,155 Class A ordinary shares and 108,921 Class B ordinary shares) issued and outstanding as of December 31, 2015 and 2016, respectively. | 55 | 53 | ||
Additional paid-in capital | 979,805 | 938,922 | ||
Accumulated other comprehensive loss | (26,994) | (10,635) | ||
Accumulated deficit | (199,641) | (307,668) | ||
Total Weibo shareholders' equity | 753,225 | 620,672 | ||
Total liabilities and shareholders' equity | $ 760,023 | $ 632,385 |
Additional Information-Conden72
Additional Information-Condensed Financial Statements of Weibo Corporation - Balance Sheets (Parenthetical) (Details) - $ / shares shares in Thousands | Dec. 31, 2016 | Dec. 31, 2015 |
Balance sheets | ||
Ordinary shares, par value (in dollars per share) | $ 0.00025 | $ 0.00025 |
Ordinary shares, shares authorized | 2,400,000 | 2,400,000 |
Ordinary shares, shares issued | 218,076 | 212,177 |
Ordinary shares, shares outstanding | 218,076 | 212,177 |
Class A ordinary shares | ||
Balance sheets | ||
Ordinary shares, shares authorized | 1,800,000 | 1,800,000 |
Ordinary shares, shares issued | 109,155 | |
Ordinary shares, shares outstanding | 109,155 | |
Class B ordinary shares | ||
Balance sheets | ||
Ordinary shares, shares authorized | 200,000 | 200,000 |
Ordinary shares, shares issued | 108,921 | |
Ordinary shares, shares outstanding | 108,921 | |
Ordinary shares to be designated | ||
Balance sheets | ||
Ordinary shares, shares authorized | 400,000 | 400,000 |
Weibo Corporation | ||
Balance sheets | ||
Ordinary shares, par value (in dollars per share) | $ 0.00025 | $ 0.00025 |
Ordinary shares, shares authorized | 2,400,000 | 2,400,000 |
Ordinary shares, shares issued | 218,076 | 212,177 |
Ordinary shares, shares outstanding | 218,076 | 212,177 |
Weibo Corporation | Class A ordinary shares | ||
Balance sheets | ||
Ordinary shares, shares authorized | 1,800,000 | 1,800,000 |
Ordinary shares, shares issued | 109,155 | |
Ordinary shares, shares outstanding | 109,155 | |
Weibo Corporation | Class B ordinary shares | ||
Balance sheets | ||
Ordinary shares, shares authorized | 200,000 | 200,000 |
Ordinary shares, shares issued | 108,921 | |
Ordinary shares, shares outstanding | 108,921 | |
Weibo Corporation | Ordinary shares to be designated | ||
Balance sheets | ||
Ordinary shares, shares authorized | 400,000 | 400,000 |
Additional Information-Conden73
Additional Information-Condensed Financial Statements of Weibo Corporation - Statements of Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statements of Comprehensive Income (Loss) | |||
Operating loss | $ 140,980 | $ 37,503 | $ (22,103) |
Interest and other income (expenses), net | 8,757 | 6,344 | 6,780 |
Investment related impairment | (40,161) | (8,005) | (2,521) |
Change in fair value of investor option liability (Note 15) | (46,972) | ||
Other income (loss), net | |||
Share of income (loss) of subsidiaries, VIE, and VIE's subsidiaries | (130) | (6) | (5) |
Net income (loss) attributable to Weibo | 108,027 | 34,745 | (65,325) |
Other comprehensive loss | |||
Currency translation adjustments (net of tax of nil, nil, and nil for 2014, 2015 and 2016 respectively) | (18,898) | (7,874) | (1,450) |
Available-for-Sale securities: | |||
Change in unrealized loss from available-for-sale securities (net of tax of nil, nil, and nil for 2014, 2015, and 2016, respectively) | (2,557) | (198) | (2,067) |
Reclassification adjustment for net loss included in net income (loss) (net of tax of nil, nil, and nil for 2014, 2015, and 2016, respectively) | 4,822 | ||
Net change, net of tax | 2,265 | (198) | (2,067) |
Comprehensive income (loss) attributable to Weibo | 91,668 | 26,946 | (68,619) |
Weibo Corporation | |||
Statements of Comprehensive Income (Loss) | |||
Operating loss | (1,891) | (1,279) | (1,086) |
Interest and other income (expenses), net | 1,763 | 4,759 | 5,034 |
Investment related impairment | (23,822) | ||
Change in fair value of investor option liability (Note 15) | (46,972) | ||
Other income (loss), net | |||
Share of income (loss) of subsidiaries, VIE, and VIE's subsidiaries | 131,977 | 31,265 | (22,301) |
Net income (loss) attributable to Weibo | 108,027 | 34,745 | (65,325) |
Other comprehensive loss | |||
Currency translation adjustments (net of tax of nil, nil, and nil for 2014, 2015 and 2016 respectively) | (18,624) | (7,601) | (1,227) |
Available-for-Sale securities: | |||
Change in unrealized loss from available-for-sale securities (net of tax of nil, nil, and nil for 2014, 2015, and 2016, respectively) | (2,557) | (198) | (2,067) |
Reclassification adjustment for net loss included in net income (loss) (net of tax of nil, nil, and nil for 2014, 2015, and 2016, respectively) | 4,822 | ||
Net change, net of tax | 2,265 | (198) | (2,067) |
Comprehensive income (loss) attributable to Weibo | $ 91,668 | $ 26,946 | $ (68,619) |
Additional Information-Conden74
Additional Information-Condensed Financial Statements of Weibo Corporation - Statements of Comprehensive Income (Loss) (Parenthetical) (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statements of Comprehensive Income (Loss) | |||
Currency translation adjustments, tax | $ 0 | $ 0 | $ 0 |
Change in unrealized loss from available-for-sale securities, tax | 0 | 0 | 0 |
Reclassification adjustment for net loss included in net income (loss), tax | 0 | 0 | 0 |
Weibo Corporation | |||
Statements of Comprehensive Income (Loss) | |||
Currency translation adjustments, tax | 0 | 0 | 0 |
Change in unrealized loss from available-for-sale securities, tax | 0 | 0 | 0 |
Reclassification adjustment for net loss included in net income (loss), tax | $ 0 | $ 0 | $ 0 |
Additional Information-Conden75
Additional Information-Condensed Financial Statements of Weibo Corporation - Statements of Cash flow (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2016 | Dec. 31, 2015 | Dec. 31, 2014 | |
Statements of Cash flow | |||
Net cash provided by (used in) operating activities | $ 236,244 | $ 181,971 | $ (19,412) |
Purchase of short-term investments | (314,363) | (149,374) | (230,161) |
Maturity of short-term investments | 373,805 | 216,615 | 321,208 |
Investments and prepayments on equity investments | (155,122) | (268,758) | (54,383) |
Net cash provided by (used in) investing activities | (96,745) | (228,310) | 13,917 |
Proceeds from IPO, net of commission | 306,491 | ||
Repayment of amount due to SINA | (2,863) | (269,042) | |
Proceeds from employee options exercised | 4,183 | 7,822 | 1,508 |
Net cash provided by financing activities | 3,035 | 4,959 | 43,663 |
Cash and cash equivalents at the beginning of the year | 237,440 | 284,865 | 249,099 |
Cash and cash equivalents at the end of the year | 364,766 | 237,440 | 284,865 |
Weibo Corporation | |||
Statements of Cash flow | |||
Net cash provided by (used in) operating activities | 1,025 | 5,317 | (627) |
Purchase of short-term investments | (30,046) | (148,863) | (230,161) |
Maturity of short-term investments | 97,798 | 218,762 | 321,208 |
Investments and prepayments on equity investments | (120,000) | (247,200) | (15,096) |
Investment in subsidiaries | (6,535) | (4,978) | (68,873) |
Net cash provided by (used in) investing activities | (58,783) | (182,279) | 7,078 |
Proceeds from IPO, net of commission | 301,270 | ||
Repayment of amount due to SINA | (255,688) | ||
Proceeds from employee options exercised | 4,183 | 7,822 | 1,508 |
Others | (6,462) | ||
Net cash provided by financing activities | 4,183 | 7,822 | 40,628 |
Net increase (decrease) in cash and cash equivalents | (53,575) | (169,140) | 47,079 |
Cash and cash equivalents at the beginning of the year | 60,810 | 229,950 | 182,871 |
Cash and cash equivalents at the end of the year | 7,235 | 60,810 | 229,950 |
Supplemental schedule of non-cash investing and financing activities | |||
Investment in subsidiaries and VIE directly financed by SINA | $ 18,277 | $ 17,582 | $ 6,413 |