Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2021 | |
Document Information [Line Items] | |
Entity Registrant Name | WEIBO CORPORATION |
Entity Central Index Key | 0001595761 |
Document Type | 6-K |
Document Period End Date | Sep. 30, 2021 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2021 |
Amendment Flag | false |
UNAUDITED INTERIM CONSOLIDATED
UNAUDITED INTERIM CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Current assets: | |||
Cash and cash equivalents | $ 1,828,691 | $ 2,005,106 | $ 1,814,844 |
Short-term investments | 878,487 | 930,822 | 1,682,048 |
Accounts receivable due from third parties, net of allowances of $29,061 and $35,219 as of December 31, 2020 and September 30, 2021, respectively | 544,283 | 467,246 | 314,159 |
Prepaid expenses and other current assets (including loans to and interest receivable from other related parties of $158,622 and $283,904 as of December 31, 2020 and September 30, 2021, respectively) | 944,044 | 587,293 | 296,757 |
Amount due from SINA (Note 10) | 515,534 | 498,618 | 548,900 |
Total current assets | 4,850,466 | 4,653,048 | 4,834,559 |
Property and equipment, net | 64,396 | 61,033 | 60,632 |
Operating lease assets | 10,666 | 12,260 | 7,176 |
Intangible assets, net | 170,756 | 157,177 | 146,976 |
Goodwill | 128,576 | 113,604 | 61,712 |
Long-term investments | 1,195,549 | 1,123,258 | 1,179,466 |
Other non-current assets | 577,627 | 582,345 | 44,596 |
Total assets | 6,998,036 | 6,702,725 | 6,335,117 |
Current liabilities (including amounts of the consolidated VIEs without recourse to the primary beneficiary of $538,269 and $710,781 as of December 31, 2020 and September 30, 2021, respectively.) | |||
Accounts payable | 177,647 | 159,497 | 149,509 |
Accrued and other liabilities | 732,519 | 692,390 | 556,753 |
Operating lease liability, short-term | 4,405 | 5,594 | 5,580 |
Income taxes payable | 115,241 | 89,100 | 102,844 |
Deferred revenues | 132,468 | 146,085 | 143,684 |
Total current liabilities | 1,162,280 | 1,092,666 | 958,370 |
Long-term liabilities | |||
Convertible debt | 895,505 | 894,470 | 892,399 |
Unsecured senior notes | 1,537,840 | 1,537,264 | 1,536,112 |
Deferred tax liability | 54,453 | 56,048 | 58,299 |
Operating lease liability, long-term | 5,831 | 6,154 | 1,505 |
Other non-current liabilities | 11,714 | 8,505 | 2,102 |
Total long-term liabilities | 2,505,343 | 2,502,441 | 2,490,417 |
Total liabilities | 3,667,623 | 3,595,107 | 3,448,787 |
Commitments and contingencies (Note 17) | |||
Redeemable non-controlling interests (Note 18) | 74,170 | 69,359 | 57,714 |
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; 227,688 shares (including 125,909 Class A ordinary shares and 101,779 Class B ordinary shares) and 229,092 shares (including 127,313 Class A ordinary shares and 101,779 Class B ordinary shares) issued and outstanding as of December 31, 2020 and September 30, 2021, respectively. | 57 | 57 | 57 |
Additional paid-in capital | 1,269,014 | 1,239,461 | 1,201,622 |
Accumulated other comprehensive income | 114,066 | 108,452 | 79,526 |
Retained earnings | 1,843,806 | 1,662,068 | 1,531,220 |
Total Weibo shareholders' equity | 3,226,943 | 3,010,038 | 2,812,425 |
Non-controlling interests | 29,300 | 28,221 | 16,191 |
Total shareholders' equity | 3,256,243 | 3,038,259 | 2,828,616 |
Total liabilities, redeemable non-controlling interests and shareholders' equity | 6,998,036 | 6,702,725 | 6,335,117 |
Alibaba (Note 10) | |||
Current assets: | |||
Accounts receivable due from related parties | 98,262 | 122,991 | 135,321 |
Other related parties (Note 10) | |||
Current assets: | |||
Accounts receivable due from related parties | $ 41,165 | $ 40,972 | $ 42,530 |
UNAUDITED INTERIM CONSOLIDATE_2
UNAUDITED INTERIM CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) shares in Thousands | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Net of allowances | $ 35,283,000 | $ 35,880,000 | $ 35,156,000 |
Loans to and interest receivable | 283,904,000 | 336,558,000 | 158,622,000 |
Current liabilities | $ 1,162,280,000 | $ 1,092,666,000 | $ 958,370,000 |
Ordinary shares, par value (in dollars per share) | $ 0.00025 | $ 0.00025 | $ 0.00025 |
Ordinary shares, shares authorized | 2,400,000 | 2,400,000 | 2,400,000 |
Ordinary shares, shares issued | 229,092 | 228,281 | 227,688 |
Ordinary shares, shares outstanding | 229,092 | 228,281 | 227,688 |
Class A ordinary shares | |||
Ordinary shares, shares authorized | 1,800,000 | 1,800,000 | 1,800,000 |
Ordinary shares, shares issued | 127,313 | 126,502 | 125,909 |
Class B ordinary shares | |||
Ordinary shares, shares authorized | 200,000 | 200,000 | 200,000 |
Ordinary shares, shares issued | 101,779 | 101,779 | 101,779 |
Ordinary shares to be designated | |||
Ordinary shares, shares authorized | 400,000 | 400,000 | 400,000 |
Consolidated VIEs | Without recourse | |||
Current liabilities | $ 710,781,000 | $ 655,757,000 | $ 538,269,000 |
Alibaba (Note 10) | |||
Net of allowances | 0 | 0 | 0 |
Other related parties (Note 10) | |||
Net of allowances | 64 | 0 | 6,095,000 |
Loans to and interest receivable | 37,518,000 | 32,058,000 | 15,884,000 |
Third parties | |||
Net of allowances | $ 35,219,000 | $ 35,880,000 | $ 29,061,000 |
UNAUDITED INTERIM CONSOLIDATE_3
UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenues: | ||||
Revenues | $ 1,033,362 | $ 710,782 | $ 1,640,796 | $ 1,176,521 |
Costs and Expenses | ||||
Cost of revenues | 172,318 | 137,694 | 275,296 | 214,892 |
Sales and marketing | 298,368 | 211,220 | 439,207 | 316,483 |
Product development | 197,985 | 150,370 | 316,806 | 233,881 |
General and administrative | 62,850 | 47,298 | 94,597 | 86,111 |
Total costs and expenses | 731,521 | 546,582 | 1,125,906 | 851,367 |
Income from operations | 301,841 | 164,200 | 514,890 | 325,154 |
Income from equity method investments | 13,605 | 3,388 | 17,688 | 4,422 |
Realized gain from investments | 1,106 | 844 | 1,299 | 848 |
Fair value changes through earnings on investments, net | (69,495) | 117,517 | (33,073) | 127,641 |
Investment related impairment | (66,625) | (3,920) | (102,594) | (117,835) |
Interest income | 40,068 | 45,609 | 56,909 | 65,667 |
Interest expense | (35,503) | (22,363) | (53,255) | (39,677) |
Other income, net | 6,808 | 1,356 | 3,147 | 3,889 |
Income before income tax expenses | 191,805 | 306,631 | 405,011 | 370,109 |
Less: Provision of income taxes | 61,855 | 56,627 | 93,260 | 86,630 |
Net income | 129,950 | 250,004 | 311,751 | 283,479 |
Less: Net loss attributable to non-controlling interests | (898) | (520) | (835) | (843) |
Net income attributable to Weibo's shareholders | 130,848 | 250,524 | 312,586 | 284,322 |
Other comprehensive income | ||||
Currency translation adjustments (for which there were no taxes) | 29,222 | (31,347) | 34,888 | 57,670 |
Available-for-Sale securities | ||||
Total comprehensive income | 159,172 | 218,657 | 346,639 | 341,149 |
Less: Comprehensive loss attributable to non-controlling interests | (602) | (528) | (487) | (810) |
Comprehensive income attributable to Weibo's shareholders | $ 159,774 | $ 219,185 | $ 347,126 | $ 341,959 |
Shares used in computing net income per share attributable to Weibo's shareholders: | ||||
Basic | 227,936 | 226,535 | 228,185 | 226,728 |
Diluted | 229,429 | 227,129 | 229,765 | 227,352 |
Income per share: | ||||
Basic | $ 0.57 | $ 1.11 | $ 1.37 | $ 1.25 |
Diluted | $ 0.57 | $ 1.10 | $ 1.36 | $ 1.25 |
Advertising and marketing revenues | ||||
Revenues: | ||||
Revenues | $ 892,349 | $ 616,006 | $ 1,429,969 | $ 1,032,678 |
Value-added services revenues | ||||
Revenues: | ||||
Revenues | 141,013 | 94,776 | 210,827 | 143,843 |
SINA (Note 10) | Advertising and marketing revenues | ||||
Revenues: | ||||
Revenues | 30,931 | 27,624 | 58,178 | 34,149 |
Alibaba (Note 10) | Advertising and marketing revenues | ||||
Revenues: | ||||
Revenues | 109,918 | 72,542 | 134,892 | 112,906 |
Other related parties (Note 10) | Advertising and marketing revenues | ||||
Revenues: | ||||
Revenues | 22,682 | 17,985 | 38,731 | 33,360 |
Third parties | Advertising and marketing revenues | ||||
Revenues: | ||||
Revenues | $ 728,818 | $ 497,855 | $ 1,198,168 | $ 852,263 |
UNAUDITED INTERIM CONSOLIDATE_4
UNAUDITED INTERIM CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Currency translation adjustments, tax | $ 0 | $ 0 | $ 0 | $ 0 |
UNAUDITED INTERIM CONDENSED CON
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands | Ordinary Shares | Additional Paid-In Capital | Accumulated Other Comprehensive Income | Accumulated Deficit | Non-controlling Interests | Total |
Balance at Dec. 31, 2019 | $ 57 | $ 1,133,913 | $ (68,559) | $ 1,217,856 | $ (1,448) | $ 2,281,819 |
Balance (in shares) at Dec. 31, 2019 | 226,310 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Issuance of ordinary shares pursuant to stock plan | 57 | 57 | ||||
Issuance of ordinary shares pursuant to stock plan (in shares) | 606 | |||||
Non-cash stock-based compensation | 30,188 | 30,188 | ||||
Net income (loss) | 250,524 | (520) | 250,004 | |||
Sale of a subsidiary's shares to non-controlling shareholders | 539 | 978 | 1,517 | |||
Currency translation adjustments | (31,339) | (8) | (31,347) | |||
Balance at Jun. 30, 2020 | $ 57 | 1,164,697 | (99,898) | 1,468,380 | (998) | 2,532,238 |
Balance (in shares) at Jun. 30, 2020 | 226,916 | |||||
Balance at Dec. 31, 2019 | $ 57 | 1,133,913 | (68,559) | 1,217,856 | (1,448) | 2,281,819 |
Balance (in shares) at Dec. 31, 2019 | 226,310 | |||||
Increase (Decrease) in Shareholders' Equity | ||||||
Issuance of ordinary shares pursuant to stock plan | 57 | 57 | ||||
Issuance of ordinary shares pursuant to stock plan (in shares) | 1,002 | |||||
Non-cash stock-based compensation | 47,785 | 47,785 | ||||
Conversion of convertible debt | 8 | 8 | ||||
Net income (loss) | 284,322 | (843) | 283,479 | |||
Sale of a subsidiary's shares to non-controlling shareholders | 539 | 978 | 1,517 | |||
Currency translation adjustments | 57,637 | 33 | 57,670 | |||
Balance at Sep. 30, 2020 | $ 57 | 1,182,302 | (10,922) | 1,502,178 | (1,280) | 2,672,335 |
Balance (in shares) at Sep. 30, 2020 | 227,312 | |||||
Balance at Dec. 31, 2020 | $ 57 | 1,201,622 | 79,526 | 1,531,220 | 16,191 | $ 2,828,616 |
Balance (in shares) at Dec. 31, 2020 | 227,688 | 227,688 | ||||
Increase (Decrease) in Shareholders' Equity | ||||||
Issuance of ordinary shares pursuant to stock plan | 226 | $ 226 | ||||
Issuance of ordinary shares pursuant to stock plan (in shares) | 593 | |||||
Non-cash stock-based compensation | 37,840 | 37,840 | ||||
Net income (loss) | 130,848 | (898) | 129,950 | |||
Compensation cost to non-controlling interest shareholders | 2,341 | 2,341 | ||||
Disposal of a subsidiary with non-controlling interests | (227) | (520) | (747) | |||
Acquisition of a subsidiary with non-controlling interests | 10,811 | 10,811 | ||||
Currency translation adjustments | 28,926 | 296 | 29,222 | |||
Balance at Jun. 30, 2021 | $ 57 | 1,239,461 | 108,452 | 1,662,068 | 28,221 | $ 3,038,259 |
Balance (in shares) at Jun. 30, 2021 | 228,281 | 228,281 | ||||
Balance at Dec. 31, 2020 | $ 57 | 1,201,622 | 79,526 | 1,531,220 | 16,191 | $ 2,828,616 |
Balance (in shares) at Dec. 31, 2020 | 227,688 | 227,688 | ||||
Increase (Decrease) in Shareholders' Equity | ||||||
Issuance of ordinary shares pursuant to stock plan | 1,214 | $ 1,214 | ||||
Issuance of ordinary shares pursuant to stock plan (in shares) | 1,404 | |||||
Non-cash stock-based compensation | 66,437 | 66,437 | ||||
Net income (loss) | 312,586 | (835) | 311,751 | |||
Compensation cost to non-controlling interest shareholders | 2,792 | 2,792 | ||||
Disposal of a subsidiary with non-controlling interests | (259) | (7) | (266) | |||
Acquisition of a subsidiary with non-controlling interests | 10,811 | 10,811 | ||||
Currency translation adjustments | 34,540 | 348 | 34,888 | |||
Balance at Sep. 30, 2021 | $ 57 | $ 1,269,014 | $ 114,066 | $ 1,843,806 | $ 29,300 | $ 3,256,243 |
Balance (in shares) at Sep. 30, 2021 | 229,092 | 229,092 |
UNAUDITED INTERIM CONDENSED C_2
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||||
Net income | $ 129,950 | $ 250,004 | $ 311,751 | $ 283,479 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||||
Depreciation and amortization | 26,034 | 13,692 | 40,172 | 21,422 |
Stock-based compensation | 36,221 | 30,188 | 61,258 | 47,785 |
Amortization of operating lease assets | 2,508 | 1,872 | 4,211 | 2,958 |
Non-cash compensation cost to non-controlling interest shareholders | 13,280 | 18,420 | ||
Provision of allowance for credit losses | 10,444 | 25,233 | 13,160 | 52,900 |
Deferred income taxes | (5,061) | 12,745 | (11,546) | 11,682 |
Income from equity method investments | (13,605) | (3,388) | (17,688) | (4,422) |
Dividend received from equity method investments | 2,880 | 11,695 | ||
Gain on sale of investments | (1,106) | (844) | (1,299) | (848) |
Fair value changes through earnings on investments, net | 69,495 | (117,517) | 33,073 | (127,641) |
Investment related impairment | 66,625 | 3,920 | 102,594 | 117,835 |
Gain on disposal of property and equipment | (65) | (27) | (63) | (27) |
Amortization of convertible debt and unsecured senior notes issuance cost | 3,223 | 2,738 | 4,834 | 4,333 |
Changes in assets and liabilities: | ||||
Accounts receivable due from third parties | (162,548) | (13,265) | (241,309) | (61,633) |
Prepaid expenses and other current assets | 1,978 | (23,858) | 7,849 | (36,769) |
Other non-current assets | (3,760) | (1,189) | (4,194) | (159) |
Accounts payable | 9,050 | (20,321) | 24,290 | (14,256) |
Accrued and other liabilities | 164,593 | (21,044) | 190,348 | 6,081 |
Deferred revenues | 600 | 51,054 | (13,235) | 40,956 |
Operating lease liabilities | (2,930) | (2,100) | (4,550) | (3,100) |
Income taxes payable | (14,748) | (22,531) | 11,195 | 8,071 |
Net cash provided by operating activities | 338,357 | 185,264 | 564,352 | 420,495 |
Cash flows from investing activities: | ||||
Purchases of bank time deposits and wealth management products | (501,944) | (793,810) | (560,246) | (2,048,210) |
Maturities of bank time deposits and wealth management products | 1,253,803 | 891,610 | 1,371,867 | 1,241,610 |
Investment in and prepayment on long-term investments | (960,446) | (257,500) | (1,471,280) | (287,449) |
Proceeds from disposal of/refund of prepayment on long-term investments | 168,283 | 62,129 | 242,558 | 178,886 |
Proceeds from disposal of property and equipment | 260 | 38 | 273 | 38 |
Purchases of property and equipment | (15,491) | (15,752) | (23,786) | (26,404) |
Prepayment for purchase of SINA Plaza | (132,531) | (132,531) | ||
Payment for acquisitions, net of cash acquired | (51,873) | (61,160) | (2,386) | |
Net cash used in investing activities | (162,508) | (154,782) | (567,860) | (1,240,855) |
Cash flows from financing activities: | ||||
Proceeds from employee options exercised | 226 | 108 | 1,214 | 122 |
Proceeds from unsecured senior notes, net of issuance costs | 740,324 | |||
Proceeds from sale of a subsidiary's equity interest to a non-controlling shareholder | 1,517 | 1,517 | ||
Net cash provided by financing activities | 226 | 1,625 | 1,214 | 741,963 |
Effect of exchange rate changes on cash and cash equivalents | 14,187 | (12,841) | 16,141 | 37,341 |
Net increase (decrease) in cash and cash equivalents | 190,262 | 19,266 | 13,847 | (41,056) |
Cash and cash equivalents at the beginning of the period | 1,814,844 | 1,452,985 | 1,814,844 | 1,452,985 |
Cash and cash equivalents at the end of the period | 2,005,106 | 1,472,251 | 1,828,691 | 1,411,929 |
Supplemental disclosure of cash flow information | ||||
Cash paid for income taxes | (82,265) | (66,199) | (94,189) | (66,305) |
Cash paid for interest expenses on convertible debt/unsecured senior notes | (5,625) | (33,625) | (32,281) | (33,625) |
Supplemental schedule of non-cash investing and financing activities | ||||
Property and equipment in accounts payable | 3,048 | 7,767 | 5,657 | 4,492 |
Unpaid consideration for acquisition | 6,205 | |||
SINA (Note 10) | ||||
Changes in assets and liabilities: | ||||
Amount due from SINA | (16,739) | 2,487 | (23,357) | 70,807 |
Cash flows from investing activities: | ||||
Loan to SINA | (310,923) | (188,194) | (481,215) | (443,637) |
Repayment of loan by SINA | 388,354 | 146,697 | 547,660 | 146,697 |
Alibaba (Note 10) | ||||
Changes in assets and liabilities: | ||||
Accounts receivable due from other related parties | 13,846 | (16,250) | 38,743 | (35,618) |
Other related parties (Note 10) | ||||
Changes in assets and liabilities: | ||||
Accounts receivable due from other related parties | $ 8,192 | $ 33,665 | $ 8,000 | $ 36,659 |
Operations
Operations | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Operations | ||
Operations | 1. Operations Weibo Corporation (“Weibo” or the “Company”) is a leading social media for people to create, share and discover 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. Weibo provides charities a platform to launch charitable projects, seek donations and volunteers, and leverage 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 value-added services, including VIP membership, live streaming, and game-related services. 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”) 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 was automatically converted into Class A ordinary shares. The call option held by a subsidiary of Alibaba Group was exercised to purchase 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. Weibo Corporation, an exempted company with limited liability under the laws of the Cayman Islands, is the holding company for the Weibo business. WB Online and Weibo HK are wholly owned subsidiaries of Weibo, and Weibo Technology, a wholly foreign-owned enterprise, (“the WFOE”), is a subsidiary of Weibo HK. The operation of Weibo business is carried out by various subsidiaries and variable interest entities (“VIE”) of the Company. The Company’s VIEs and VIEs’ subsidiaries are controlled by the WFOE through a series of contractual agreements. Weibo Corporation, its subsidiaries, VIEs and VIEs’ subsidiaries together are referred to as “the Group”. The following sets forth the Company’s major subsidiaries, major VIEs and major VIEs’ subsidiary: Percentage of Direct/ Indirect Date of Place of Economic Company Incorporation Incorporation Interest Major Subsidiaries Weibo Hong Kong Limited (“Weibo HK”) July 19, 2010 Hong Kong 100 % Weibo Internet Technology (China) Co., Ltd. (“Weibo Technology” or “the WFOE”) October 11, 2010 PRC 100 % WB Online Investment Limited (“WB Online”) June 5, 2014 Cayman Islands 100 % Hangzhou Weishichangmeng Advertising Co., Ltd. (“Weishichangmeng”) September 25, 2018 PRC 100 % Major VIEs Beijing Weimeng Technology Co., Ltd (“Weimeng”) August 9, 2010 PRC 99 % Beijing Weimeng Chuangke Investment Management Co., Ltd. (“Weimeng Chuangke”) April 9, 2014 PRC 100 % Major VIEs' subsidiary Beijing Weibo Interactive Internet Technology Co., Ltd. (“Weibo Interactive”) Acquired in May 2013 PRC 100 % 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-sub licensable, 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-sub licensable, 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. Transactions between SINA and Weibo Accounts receivable directly related to Weibo but for which SINA will receive payments and remit payments to the Group, as well as accounts receivable directly from SINA, 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, as well as liabilities directly to SINA, are included in the amount due to SINA. The amount due from/to SINA is presented as an offsetting balance on the Group’s consolidated balance sheets. Loans from SINA are presented under cash flow from financing activities, whereas loans to SINA are presented under investing activities in the consolidated statements of cash flows. Cash payment for billings from SINA for costs and expenses allocated to the Group is presented under operating activities in the consolidated statements of cash flows. The Group’s consolidated statements of comprehensive income contain 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 mutual managements. Total cost and expenses allocated from SINA were as follows: Six Months Ended June 30, 2020 2021 (Unaudited) (In thousands) Cost of revenues $ 11,112 $ 7,691 Sales and marketing 3,555 2,350 Product development 5,528 5,225 General and administrative 2,934 3,337 $ 23,129 $ 18,603 While the costs and expenses allocated to the Group for these items are not necessarily indicative of the costs and expenses that would have been incurred if the Group had transactions with independent third party suppliers directly or hired more employees, the Company does not believe that there is any significant difference between the nature and amounts of these allocated costs and expenses and the ones that would have been incurred if the Group had transactions with independent third party suppliers directly or hired more employees. Consolidation The consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, VIEs, of which the Company is the primary beneficiary, and VIEs’ subsidiaries. All significant intercompany balances and transactions have been eliminated. To comply with PRC laws and regulations, the Group provides a substantial amount of its services in China via the VIEs, which hold critical operating licenses that enable the Group to do business in China. Most of the Group’s revenues, costs and expense, and net income in China were generated directly or indirectly through the VIEs. The Company, through the WFOE, has signed various agreements with the VIEs to allow the transfer of economic benefits from the VIEs to the Company. The Group has determined that it is the primary beneficiary of the VIEs through Weibo Technology’s contractual arrangements with the VIEs. Accordingly, the Company has consolidated the VIEs’ 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 VIEs are certain nominee shareholders from the Company or SINA. The capital for their investments in the VIEs is funded by the Company and recorded as interest-free loans to these individuals. These loans were eliminated with the capital of the VIEs during consolidation. Each shareholder of the VIEs has agreed to transfer their equity interest in the VIEs 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 VIEs, including without limitation the right to appoint all directors of the VIEs, has been assigned to Weibo Technology. Weibo Technology has also entered into exclusive technical service agreements with the VIEs under which Weibo Technology provides technical and other services to the VIEs in exchange for substantially all net income of the VIEs. In addition, the shareholders of the VIEs have pledged their shares in the VIEs as collateral for the non-payment of loans or for the technical and other services fees due to Weibo Technology. As of December 31, 2020 and June 30, 2021, the total amounts of interest-free loans to the VIEs’ shareholders were $89.5 million and $90.6 million, respectively. The VIEs and VIEs’ subsidiaries had accumulated deficit of $96.1 million and $158.8 million as of December 31, 2020 and June 30, 2021, 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 VIEs and VIEs’ subsidiaries taken as a whole, which are included in the Group’s consolidated balance sheets and consolidated statements of comprehensive income: As of December 31, 2020 June 30, 2021 (In thousands) Cash, cash equivalents and short-term investments $ 445,210 $ 340,157 Accounts receivable 431,022 532,243 Prepaid expenses and other current assets 55,653 178,561 Amount due from SINA 31,142 26,032 Property and equipment, net 692 1,499 Operating lease assets 1,783 5,054 Intangible assets 146,976 157,177 Goodwill 61,712 113,604 Long-term investments 394,745 369,686 Deferred tax assets 15,392 15,516 Others 223 250,268 Total assets $ 1,584,550 $ 1,989,797 Accounts payable $ 83,336 $ 97,710 Accrued and other liabilities 341,552 399,549 Deferred revenues 85,846 89,098 Income taxes payable 26,417 67,347 Amount due to the subsidiaries of the Group 968,138 1,285,039 Operating lease liability 1,704 5,060 Deferred tax liability 32,418 34,008 Other non-current liabilities 2,102 8,506 Total liabilities $ 1,541,513 $ 1,986,317 Six Months Ended June 30, 2020 2021 (Unaudited) (In thousands) Net revenues $ 570,963 $ 794,981 Net loss after intercompany service fee charge $ (37,727) $ (62,726) Six Months Ended June 30, 2020 2021 (Unaudited) (In thousands) Net cash provided by (used in) operating activities $ (55,363) $ 317,989 Net cash used in investing activities (40,927) (468,791) Net cash provided by financing activities 36,837 31,406 Net decrease in cash and cash equivalents $ (59,453) $ (119,396) Under the contractual arrangements with the VIEs, the Company has the power to direct activities of the VIEs through Weibo Technology and can have assets transferred freely out of the VIEs without restrictions. Therefore, the Company considers that there is no asset of the VIEs that can only be used to settle obligations of the VIEs and VIEs’ subsidiaries, except for the registered capital and non-distributable reserve funds of the VIEs and VIEs’ subsidiaries, amounting to $196.6 million and $228.5 million as of December 31, 2020 and June 30, 2021, respectively. Since the VIEs are incorporated as limited liability companies under the PRC Company Law, creditors of the VIEs 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 VIEs. As the Company is conducting certain businesses mainly through the VIEs, 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 VIEs was $7.2 million and $1.9 million for the six months ended June 30, 2020 and 2021, respectively. Unrecognized revenue-producing assets held by the VIEs include the Internet Content Provision License, the Online Culture Operating Permit, the domain names of Weibo.com, Weibo.cn and Weibo.com.cn and so on. Recognized revenue-producing assets held by the VIEs include game technology, live streaming platform technology, supplier-relationship contracts, and trademark and domain names, which were acquired through the previous acquisitions. Unrecognized revenue-producing assets, including customer lists relating to advertising and marketing services, VIP membership, and game-related services, as well as trademarks, are also held by Weibo Technology. The following is a summary of the VIE agreements with Weimeng. The VIE agreements with Weimeng Chuangke are substantially the same as those described below: Loan Agreements. Share Transfer Agreements. Loan Repayment Agreements. Agreement on Authorization to Exercise Shareholder’s Voting Power. Share Pledge Agreements. Exclusive Technical Services Agreement, Exclusive Sales Agency Agreement and Trademark License Agreement. These VIE agreements provide Weibo Technology with the power to direct the activities that most significantly affect the economic performance of the Group’s consolidated VIEs and enable the Group to receive substantially all of the economic benefits generated by them. For the six months ended June 30, 2020 and 2021, the total amount of service fees that Weibo Technology charge to Weimeng under these service agreements and trademark license agreement was $312.7 million and $438.5 million, respectively, which were based on the actual cost incurred from providing the services and the cash position and operations of Weimeng. Weibo Technology, Weimeng Chuangke and Weimeng Chuangke’s shareholders have entered into contractual arrangements which contain agreements and terms substantially similar to Weibo Technology’s contractual arrangements with Weimeng and Weimeng’s shareholders described above. Minority Investment in Weimeng In April 2020, WangTouTongDa (Beijing) Technology Co., Ltd., an entity affiliated with ZhongWangTou (Beijing) Technology Co., Ltd., made an investment of approximately RMB10.7 million in Weimeng for 1% of Weimeng’s enlarged registered capital. Such third party minority stake holder is entitled to customary economic rights in proportion to its equity ownership, and certain minority shareholder rights such as the right to appoint a director to Weimeng’s three-member board of directors, and veto rights over certain matters related to content decision, and certain future financings of Weimeng. The third party minority stake holder is not a party to the contractual arrangements mentioned above that are currently in effect among Weimeng, Weibo Technology and Weimeng’s other shareholders. As such, despite the fact that the Company is still able to enjoy economic benefits and exercise effective control over Weimeng and its subsidiaries, the Company is not able to purchase or have the third party minority stake holder pledge its 1% equity interests in Weimeng in the same manner as agreed under existing contractual arrangements, nor is it granted the authorization of voting rights over these 1% equity interests. The Company believes Weibo Technology, the wholly-owned PRC subsidiary, still controls and is the primary beneficiary of Weimeng as it continues to have a controlling financial interest in Weimeng pursuant to ASC 810-10-25-38A after the issuance of such 1% equity interests. The Company believes that the contractual arrangements among the WFOE, VIEs and VIEs’ 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 VIEs and VIEs’ subsidiaries in the consolidated financial statements. The Company’s ability to control the VIEs also depends on the authorization by the shareholders of the VIEs to exercise voting rights on all matters requiring shareholder approval in the VIEs. 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 VIEs 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 VIEs as a result of the aforementioned risks and uncertainties is remote. | 1. Operations Weibo Corporation (“Weibo” or the “Company”) is a leading social media for people to create, share and discover 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. Weibo provides charities a platform to launch charitable projects, seek donations and volunteers, and leverage 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 value-added services, including VIP membership, live streaming, and game-related services. 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”) 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 was automatically converted into Class A ordinary shares. The call option held by a subsidiary of Alibaba Group was exercised to purchase 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. Weibo Corporation, an exempted company with limited liability under the laws of the Cayman Islands, is the holding company for the Weibo business. WB Online and Weibo HK are wholly owned subsidiaries of Weibo, and Weibo Technology, a wholly foreign-owned enterprise, (“the WFOE”), is a subsidiary of Weibo HK. The operation of Weibo business is carried out by various subsidiaries and variable interest entities (“VIE”) of the Company. The Company’s VIEs and VIEs’ subsidiaries are controlled by the WFOE through a series of contractual agreements. Weibo Corporation, its subsidiaries, VIEs and VIEs’ subsidiaries together are referred to as “the Group”. The following sets forth the Company’s major subsidiaries, major VIEs and major VIEs’ subsidiary: Percentage of Direct/ Indirect Date of Place of Economic Company Incorporation Incorporation Interest Major Subsidiaries Weibo Hong Kong Limited (“Weibo HK”) July 19, 2010 Hong Kong 100 % Weibo Internet Technology (China) Co., Ltd. (“Weibo Technology” or “the WFOE”) October 11, 2010 PRC 100 % WB Online Investment Limited (“WB Online”) June 5, 2014 Cayman Islands 100 % Hangzhou Weishichangmeng Advertising Co., Ltd. (“Weishichangmeng”) September 25, 2018 PRC 100 % Major VIEs Beijing Weimeng Technology Co., Ltd (“Weimeng”) August 9, 2010 PRC 99 % Beijing Weimeng Chuangke Investment Management Co., Ltd. (“Weimeng Chuangke”) April 9, 2014 PRC 100 % Major VIEs’ subsidiary Beijing Weibo Interactive Internet Technology Co., Ltd. (“Weibo Interactive”) Acquired in May 2013 PRC 100 % 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-sub licensable, 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-sub licensable, 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. Transactions between SINA and Weibo Accounts receivable directly related to Weibo but for which SINA will receive payments and remit payments to the Group, as well as accounts receivable directly from SINA, 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, as well as liabilities directly to SINA, are included in the amount due to SINA. The amount due from/to SINA is presented as an offsetting balance on the Group’s unaudited interim condensed consolidated balance sheets. Loans from SINA are presented under cash flow from financing activities, whereas loans to SINA are presented under investing activities in the unaudited interim condensed consolidated statements of cash flows. Cash payment for billings from SINA for costs and expenses allocated to the Group is presented under operating activities in the unaudited interim condensed consolidated statements of cash flows. The Group’s unaudited interim condensed consolidated statements of comprehensive income contain 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 mutual managements. Total cost and expenses allocated from SINA were as follows: Nine Months Ended September 30, 2020 2021 (In thousands) Cost of revenues $ 14,210 $ 11,544 Sales and marketing 1,079 2,832 Product development 7,112 7,692 General and administrative 6,725 6,728 $ 29,126 $ 28,796 While the costs and expenses allocated to the Group for these items are not necessarily indicative of the costs and expenses that would have been incurred if the Group had transactions with independent third party suppliers directly or hired more employees, the Company does not believe that there is any significant difference between the nature and amounts of these allocated costs and expenses and the ones that would have been incurred if the Group had transactions with independent third party suppliers directly or hired more employees. Consolidation The unaudited interim condensed consolidated financial statements include the accounts of the Company, its wholly-owned subsidiaries, VIEs, of which the Company is the primary beneficiary, and VIEs’ subsidiaries. All significant intercompany balances and transactions have been eliminated. To comply with PRC laws and regulations, the Group provides a substantial amount of its services in China via the VIEs, which hold critical operating licenses that enable the Group to do business in China. Most of the Group’s revenues, costs and expense, and net income in China were generated directly or indirectly through the VIEs. The Company, through the WFOE, has signed various agreements with the VIEs to allow the transfer of economic benefits from the VIEs to the Company. The Group has determined that it is the primary beneficiary of the VIEs through Weibo Technology’s contractual arrangements with the VIEs. Accordingly, the Company has consolidated the VIEs’ 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 VIEs are certain nominee shareholders from the Company or SINA. The capital for their investments in the VIEs is funded by the Company and recorded as interest-free loans to these individuals. These loans were eliminated with the capital of the VIEs during consolidation. Each shareholder of the VIEs has agreed to transfer their equity interest in the VIEs 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 VIEs, including without limitation the right to appoint all directors of the VIEs, has been assigned to Weibo Technology. Weibo Technology has also entered into exclusive technical service agreements with the VIEs under which Weibo Technology provides technical and other services to the VIEs in exchange for substantially all net income of the VIEs. In addition, the shareholders of the VIEs have pledged their shares in the VIEs as collateral for the non-payment of loans or for the technical and other services fees due to Weibo Technology. As of December 31, 2020 and September 30, 2021, the total amounts of interest-free loans to the VIEs’ shareholders were $89.5 million and $90.7 million, respectively. The VIEs and VIEs’ subsidiaries had accumulated deficit of $96.1 million and $186.1 million as of December 31, 2020 and September 30, 2021, respectively, which were included in the Group’s unaudited interim condensed consolidated financial statements. The following table sets forth the assets, liabilities, results of operations and cash flows of the VIEs and VIEs’ subsidiaries taken as a whole, which are included in the Group’s unaudited interim condensed consolidated balance sheets and unaudited interim condensed consolidated statements of comprehensive income: As of December 31, 2020 September 30, 2021 (In thousands) Cash, cash equivalents and short-term investments $ 445,210 $ 359,508 Accounts receivable 431,022 599,831 Prepaid expenses and other current assets 55,653 445,338 Amount due from SINA 31,142 28,175 Property and equipment, net 692 1,872 Operating lease assets 1,783 4,602 Intangible assets 146,976 170,756 Goodwill 61,712 128,576 Long-term investments 394,745 412,122 Deferred tax assets 15,392 15,542 Others 223 245,006 Total assets $ 1,584,550 $ 2,411,328 Accounts payable $ 83,336 $ 114,551 Accrued and other liabilities 341,552 414,080 Deferred revenues 85,846 79,001 Income taxes payable 26,417 101,337 Amount due to the subsidiaries of the Group 968,138 1,666,777 Operating lease liability 1,704 4,587 Deferred tax liability 32,418 37,520 Other non-current liabilities 2,102 11,715 Total liabilities $ 1,541,513 $ 2,429,568 Nine Months Ended September 30, 2020 2021 (In thousands) Net revenues $ 925,789 $ 1,286,641 Net loss after intercompany service fee charge $ (138,779) $ (90,069) Nine Months Ended September 30, 2020 2021 (In thousands) Net cash provided by (used in) operating activities $ (20,553) $ 363,351 Net cash used in investing activities (30,331) (816,742) Net cash provided by financing activities 46,236 326,392 Net decrease in cash and cash equivalents $ (4,648) $ (126,999) Under the contractual arrangements with the VIEs, the Company has the power to direct activities of the VIEs through Weibo Technology and can have assets transferred freely out of the VIEs without restrictions. Therefore, the Company considers that there is no asset of the VIEs that can only be used to settle obligations of the VIEs and VIEs’ subsidiaries, except for the registered capital and non-distributable reserve funds of the VIEs and VIEs’ subsidiaries, amounting to $196.6 million and $228.8 million as of December 31, 2020 and September 30, 2021, respectively. Since the VIEs are incorporated as limited liability companies under the PRC Company Law, creditors of the VIEs 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 VIEs. As the Company is conducting certain businesses mainly through the VIEs, 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 VIEs was $7.0 million and $2.6 million for the nine months ended September 30, 2020 and 2021, respectively. Unrecognized revenue-producing assets held by the VIEs include the Internet Content Provision License, the Online Culture Operating Permit, the domain names of Weibo.com, Weibo.cn and Weibo.com.cn and so on. Recognized revenue-producing assets held by the VIEs include game technology, live streaming platform technology, supplier-relationship contracts, and trademark and domain names, which were acquired through the previous acquisitions. Unrecognized revenue-producing assets, including customer lists relating to advertising and marketing services, VIP membership, and game-related services, as well as trademarks, are also held by Weibo Technology. The following is a summary of the VIE agreements with Weimeng. The VIE agreements with Weimeng Chuangke are substantially the same as those described below: Loan Agreements. Share Transfer Agreements. Loan Repayment Agreements. Agreement on Authorization to Exercise Shareholder’s Voting Power. Share Pledge Agreements. Exclusive Technical Services Agreement, Exclusive Sales Agency Agreement and Trademark License Agreement. These VIE agreements provide Weibo Technology with the power to direct the activities that most significantly affect the economic performance of the Group’s consolidated VIEs and enable the Group to receive substantially all of the economic benefits generated by them. For the nine months ended September 30, 2020 and 2021, the total amount of service fees that Weibo Technology charged to Weimeng under these service agreements and trademark license agreement was $528.6 million and $744.1 million, respectively, which were based on the actual cost incurred from providing the services and the cash position and operations of Weimeng. Weibo Technology, Weimeng Chuangke and Weimeng Chuangke’s shareholders have entered into contractual arrangements which contain agreements and terms substantially similar to Weibo Technology’s contractual arrangements with Weimeng and Weimeng’s shareholders described above. Minority Investment in Weimeng In April 2020, WangTouTongDa (Beijing) Technology Co., Ltd., an entity affiliated with ZhongWangTou (Beijing) Technology Co., Ltd., made an investment of approximately RMB10.7 million in Weimeng for 1% of Weimeng’s enlarged registered capital. Such third party minority stake holder is entitled to customary economic rights in proportion to its equity ownership, and certain minority shareholder rights such as the right to appoint a director to Weimeng’s three-member board of directors, and veto rights over certain matters related to content decision, and certain future financings of Weimeng. The third party minority stake holder is not a party to the contractual arrangements mentioned above that are currently in effect among Weimeng, Weibo Technology and Weimeng’s other shareholders. As such, despite the fact that the Company is still able to enjoy economic benefits and exercise effective control over Weimeng and its subsidiaries, the Company is not able to purchase or have the third party minority stake holder pledge its 1% equity interests in Weimeng in the same manner as agreed under existing contractual arrangements, nor is it granted the authorization of voting rights over these 1% equity interests. The Company believes Weibo Technology, the wholly-owned PRC subsidiary, still controls and is the primary beneficiary of Weimeng as it continues to have a controlling financial interest in Weimeng pursuant to ASC 810-10-25-38A after the issuance of such 1% equity interests. The Company believes that the contractual arrangements among the WFOE, VIEs and VIEs’ 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 VIEs and VIEs’ subsidiaries in the consolidated financial statements. The Company’s ability to control the VIEs also depends on the authorization by the shareholders of the VIEs to exercise voting rights on all matters requiring shareholder approval in the VIEs. 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 VIEs 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 VIEs as a result of the aforementioned risks and uncertainties is remote. |
Significant Accounting Policies
Significant Accounting Policies | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
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 U.S. GAAP. The consolidated financial statements include the accounts of Weibo, its wholly owned subsidiaries, VIEs, and VIEs’ subsidiaries. All significant intercompany balances and transactions have been eliminated. The comparative financial statements for the six months ended June 30, 2020 are unaudited. Use of estimates Conformity with U.S. 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. U.S. 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, long-term investments, goodwill and other long-lived assets, allowances for credit losses, stock-based compensation, the estimated useful lives of assets, convertible debt, business combination, and foreign currency. 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 Under ASC 606, revenues are recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Group expects to be entitled to in exchange for those goods or services. The Group identifies its contracts with customers and all performance obligations within those contracts. The Group then determines the transaction price and allocates the transaction price to the performance obligations within the Group’s contracts with customers, recognizing revenue when, or as, the Group satisfies its performance obligations. The Group does not believe that significant management judgments are involved in revenue recognition, but the amount and timing of the Group's revenues could be different for any period if management made different judgments. Certain customers may receive sales rebates, which are accounted for as variable consideration. The Group estimates annual expected revenue volume of each individual agent with reference to their historical results. The Group recognizes revenue for the amount of fees it receives from its advertisers, after deducting estimated sales rebates and net of value-added tax (“VAT”) under ASC 606. The Group believes that there will not be significant changes to its estimates of variable consideration. Revenue disaggregated by revenue source for the six months ended June 30, 2020 and 2021 consists of the following: Six Months Ended June 30, 2020 2021 (Unaudited) (In thousands) Advertising and marketing revenues $ 616,006 $ 892,349 Value-added services revenues 94,776 141,013 Total revenues $ 710,782 $ 1,033,362 The Group enters into contracts with its customers, which may give rise to contract assets (unbilled revenue) or contract liabilities (deferred revenue). The payment terms and conditions within the Group’s contracts vary by the type and location of its customers and products or services purchased, the substantial majority of which are due in less than one year. Deferred revenues related to unsatisfied performance obligations at the end of the period are mainly from the customer advance of the advertising and marketing services and the sales of the fee-based services, such as VIP membership,live streaming, and virtual currency or in-game virtual items sold for game related services. The deferred revenues are recognized based on customers' consumption or amortized on a straight-line basis through the service period for different products/services. Due to the generally short-term duration of the contracts, the majority of the performance obligations are satisfied in the following reporting period. The amount of revenue recognized that was included in the deferred revenue balance at the beginning of the period was $104.5 million for the six months ended June 30, 2021. Practical Expedients and Exemptions The Group generally expenses sales commissions when incurred because the amortization period is generally one year or less. These costs are recorded within sales and marketing expenses. 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 or website 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. Under the CPM model, customers are obligated to pay when the advertisement is displayed. The Group’s majority revenue transactions are based on standard business terms and conditions, which are recognized net of agency rebates. The agency rebates are accounted for as variable consideration and are estimated during interim periods based on estimated annual revenue volume of each individual agent with reference to their historical results, which involves accounting judgment. The Group believes its estimation approach in variable consideration results in revenue recognition in a manner consistent with the underlying economics of the transaction. The Group’s contracts with customers may include multiple performance obligations, which primarily consist of combinations of service to allow customers to place advertisements on different areas of its platform or website. For such arrangements, advertising arrangements involving multiple deliverables are broken down into single-element arrangements based on their stand-alone selling price for revenue recognition purposes. The estimation of stand-alone selling price involves significant judgment, especially for the deliverables that have not been sold separately. For those deliverables, the Group determines best estimate of the stand-alone selling price by taking into consideration of the pricing of advertising areas of the Group’s platform or website with similar popularities and advertisements with similar formats and quoted prices from competitors and other market conditions. The Group believes the estimation approach in stand-alone selling price and allocation of the transaction price on a relative stand-alone selling price to each performance obligation results in revenue recognition in a manner consistent with the underlying economics of the transaction and the allocation principle included in ASC 606. Revenues recognized with reference to best estimation of selling price were immaterial for all periods presented. Most of such contracts have all performance obligations completed within one year. Changes in judgments on these assumptions and estimates could materially impact the timing or amount of revenue recognition. Contracts with customers of online advertising may require cooperation from third parties. The Group pays a predetermined portion of revenues earned from advertising contracts to the third parties such as key opinion leaders who participate in advertising and promotion activities by monetizing their social assets. The Group has determined that it is the principal in these transactions, as it has primary responsibility for fulfilling all the obligations related to advertising contracts. The Group has discretion in establishing pricing of the contracts and controls the advertising inventory before the delivery to customers. The Group records revenues derived from such contracts on a gross basis and the portion paid to the third parties is recognized as cost of revenues. 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 are received in exchange for advertising services are recorded based on the fair values of the goods or services received. Value-added services revenues The Group generates value-added services revenues principally from fee-based services, mainly including VIP membership, live streaming, and game-related services. Other value-added services revenues mainly include the revenues from the provision of traffic acquisition services to various customers. Revenues from these services are recognized when control of the promised services is transferred to customers, in an amount that reflects the consideration the Group expects to be entitled to in exchange for those services. VIP membership. Live streaming. The Group designs, creates and offers various virtual items for sales to users with pre-determined selling prices. Each virtual item is considered as a distinctive performance obligation. Sales proceeds are recorded as deferred revenue and recognized as revenue based on the consumption of the virtual items. Users can purchase and present virtual items to broadcasters to show support for their favorite ones. Under the arrangements with broadcasters or broadcaster agencies, the Group shares with them a portion of the revenues derived from the consumption of virtual items. Revenues derived from the sale of virtual items are recorded on a gross basis as the Group has determined that it acts as the principal to fulfill all obligations related to the live streaming services. The portion paid to broadcasters and/or broadcaster agencies is recognized as cost of revenues. The Group does not have further obligations to the user after the virtual items are consumed. Game-related services. Cost of revenues Cost of revenues consists mainly of costs associated with the maintenance of platform, which primarily include bandwidth and other infrastructure costs, revenue-share cost, advertisement production cost, labor cost and turnover taxes levied on the revenues, part of which were allocated from SINA. The Group is subject to 3% cultural business construction fees for its advertising and marketing revenues, which is included in cost of revenues. Starting from July 1, 2019, the 3% cultural business construction fees was reduced to 1.5%. Moreover, as part of the measures taken by the government to ease the negative impact from Covid-19 pandemic, the cultural business construction fees were exempted for the fiscal years of 2020 and 2021.An aggregate of $10.3 million and $11.5 million cultural business construction fees was exempted for the six months ended June 30, 2020 and 2021, 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. Pursuant to the adoption of ASC 606, the recognition of revenues and expenses at fair value for advertising barter transactions has resulted in an increase of revenue and advertising expenses. For the six months ended June 30, 2020 and 2021, the advertising and promotional expenses were $156.9 million and $219.9 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. The Group expenses all costs incurred for the planning, 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 expense 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, if it is probable that the performance condition will be achieved 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 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. Uncertain tax positions. Short-term investments Short-term investments represent bank time deposits and wealth management products which are certain deposits with variable interest rates or principal not-guaranteed with certain financial institutions. Their original maturities are of greater than three months but less than one year. In accordance with ASC 825, Financial Instruments Credit losses In 2016, the FASB issued ASC Topic 326, which amends previously issued guidance regarding the impairment of financial instruments by creating an impairment model that is based on expected losses. The guidance is applicable to accounts receivable and the Group adopted ASC Topic 326 on January 1, 2020. Accounts receivable are recorded at the original amounts less an allowance for any potential uncollectible amounts. The Group makes estimates of expected credit and collectability trends for the allowance for credit losses based upon assessment of various factors, including historical experience, the age of the accounts receivable balances, credit-worthiness of the customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from the customers. The Group also provides specific provisions for allowance when facts and circumstances indicate that the receivable is unlikely to be collected. Expected credit losses for accounts receivable are recorded as general and administrative expenses on the consolidated statements of comprehensive income. The initial impact of applying ASC Topic 326 on the consolidated financial statements is immaterial to the Group's retained earnings as of January 1, 2020. ASC Topic 326 is also applicable to the loans to and interest receivable from other related parties included in the prepaid expenses and other current assets on the consolidated balance sheets. Management estimates the allowance for credit losses on loans and interest receivable not sharing similar risk characteristic on an individual basis, based on lifetime expected credit losses of these loans and interest receivable by estimating loan collection schedule, then discounting these cash flows to their present values. The key factors considered when determining the above allowances for credit losses include estimated loan collection schedule, discount rate, financial condition and performance data of the borrowers and reasonable and supportable performance forecasts. 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. The Group measures the equity method investments at fair value on a non-recurring basis only if an impairment charge were to be recognized. For those investments without readily determinable fair value, the Group measures them at fair value when observable price changes are identified or impairment charge was recognized. The fair values of the Group’s privately held investments as disclosed are determined based on the discounted cash flow model using the discount curve of market interest rates or based on the similar transaction price in the market directly. The fair values of the Group’s long-term investments in the equity securities of publicly listed companies are measured using quoted market prices. The Group’s non-financial assets, such as intangible assets, goodwill, fixed assets and operating lease assets, are measured at fair value only if they are determined to be impaired. 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 SINA, accounts payable, accrued and other liabilities approximates fair value because of their short-term nature. See Note 15 Fair Value Measurement Long-term investments Long-term investments are comprised of investments in publicly traded companies, privately held companies, and limited partnerships. The Group uses the equity method to account for ordinary-share-equivalent equity investments on which it has significant influence but does not own a majority equity interest or otherwise control. The Group measures investments in equity securities, other than equity method investments, at fair value through earnings. For those investments without readily determinable fair values, the Group elects to record these investments at cost, less impairment, plus or minus subsequent adjustments for observable price changes. Under this measurement alternative, changes in the carrying value of the investments will be recognized in consolidated statement of comprehensive income, whenever there are observable price changes in orderly transactions for the identical or similar investment of the same issuer. Pursuant to ASC 321, for equity investments measured at fair value with changes in fair value recorded in earnings, the Group does not assess whether those securities are impaired. For equity investments without readily determinable fair value for which the Group has elected to use the measurement alternative, the Group makes a qualitative assessment of whether the investment is impaired at each reporting date, applying significant judgement in considering various factors and events including a) adverse performance of investees; b) adverse industry developments affecting investees; and c) adverse regulatory, social, economic or other developments affecting investees. If a qualitative assessment indicates that the investment is impaired, the Group estimates the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the Group recognizes an impairment loss in net income equal to the difference between the carrying value and fair value. Significant judgement is applied by the Group in estimating the fair value to determine if an impairment exists, and if so, to measure the impairment losses for these equity security investments. These judgements include the selection of valuation methods in estimating fair value and the determination of key valuation assumptions used,including cash flow forecasts and critical assumptions used in cash flow forecasts, such as the investees’ revenue growth rate, terminal growth rate, discount rate, selection of comparable companies and multiples, estimated volatility rate and discount for lack of marketability. Investments in entities which the Group can exercise significant influence and holds an investment in voting common shares or in-substance common shares (or both) of the investee but does not own a majority equity interest or control are accounted for using the equity method of accounting in accordance with ASC topic 323 (“ASC 323”), Investment - Equity Method and Joint Ventures. Under the equity method, the Group initially records its investments at cost and the difference between the cost of the equity investee and the fair value of the underlying equity in the net assets of the equity investee is recognized as equity method goodwill, which is included in the equity method investment on the consolidated balance sheets. The Group subsequently adjusts the carrying amount of the investments to recognize the Group’s proportionate share of each equity investee’s net income or loss into earnings after the date of investment. The Group evaluates the equity method investments for impairment under ASC 323. An impairment loss on the equity method investments is recognized in earnings when the decline in value is determined to be other-than-temporary. In January 2020, the FASB issued ASU No. 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force). The amendments in this update clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. Early adoption is permitted. The Group adopted the ASU on January 1, 2021, which did not have a material impact on the consolidated financial statements. 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. Leases In February 2016, the FASB issued a new standard on leases, ASU 2016-02, “Leases (Topic 842)”, which requires a lessee to recognize assets and liabilities arising from operating leases. A lessee should recognize a liability to make lease payments (the Lease Liability) and a right-of-use asset (the Operating Lease Assets) representing its right to use the underlying asset for the lease term. For leases with a term of twelve months or less, a lessee is permitted to make an accounting policy choice not to recognize lease assets and lease liabilities. In July 2018, the FASB issued an amendment, ASU 2018-11, which provides another transition method in addition to the existing transition methods by allowing entities to initially apply the new leases standard at the effective date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption and to not retrospectively adjust prior periods financial statements. On January 1, 2019, the Group adopted the new lease standard using the transition method by applying the standard to all leases existing at the date of initial application. The Group chose to not recognize lease assets and lease liabilities for leases with a term of twelve months or less, to not separate non-lease components from lease components, and to not reassess lease classification, treatment of initial direct costs or whether an existing or expired contract contains a lease according to the practical expedients permitted under the transition method. The Group did not retrospectively adjust the prior comparative periods. Under the new lease standard, the Group determines if an arrangement is or contains a lease at inception. Right-of-use assets and liabilities are recognized at lease commencement date based on the present value of remaining lease payments over the lease terms. The Group considers only payments that are fixed and determinable at the time of lease commencement. 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 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, consolidated VIEs and VIEs’ subsidiaries. The Group assesses goodwill for impairment in accordance with ASC Subtopic 350-20 (“ASC 350-20”), Intangibles - Goodwill and Other: Goodwill 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 three Convertible debt and unsecured senior notes The Group determines the appropriate accounting treatment of its convertible debt in accordance with the terms in relation to the conversion feature. After considering the impact of such features, the Group may account for such instrument as a liability in its entirety, or separate the instrument into debt and equity components following the respective guidance described under ASC 815 Derivatives and Hedging Debt The debt discount, if any, together with related issuance cost are subsequently amortized as interest expense over the contractual life. The Group presented the issuance costs of debt as a direct deduction from the related debt during the periods presented. The unsecured senior notes are recognized initially at fair value, net of debt discounts or premiums, if any, issuance costs and other incidental fees, all of which are recorded as a direct deduction of the proceeds received from issuing the unsecured senior notes and the related accretion is recorded as interest expense in the consolidated statement of comprehensive income over the estimated term using the effective interest method. 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 VIP membership, live streaming, and virtual currency or in-game virtual items sold for game related services. 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. 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 is 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 (loss) as a component of shareholders’ equity. Translation gains or losses a | 2. Significant Accounting Policies Basis of presentation The interim unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements. In the opinion of the Company, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of September 30, 2021, its results of operations and cash flows for the nine months ended September 30, 2020 and 2021. The unaudited interim condensed consolidated balance sheet as of December 31, 2020, was derived from audited annual financial statements included in the Company’s Annual Report on Form 20-F filed on April 22, 2021, but does not contain all of the footnote disclosures from the annual financial statements. The preparation of the Group’s unaudited interim condensed consolidated financial statements is in conformity with U.S. GAAP. The unaudited interim condensed consolidated financial statements include the accounts of Weibo, its wholly owned subsidiaries, VIEs, and VIEs’ subsidiaries. All significant intercompany balances and transactions have been eliminated. Use of estimates Conformity with U.S. GAAP requires the use of estimates and judgments that affect the reported amounts in the unaudited interim condensed 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. U.S. 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, long-term investments, goodwill and other long-lived assets, allowances for credit losses, stock-based compensation, the estimated useful lives of assets, convertible debt, business combination, and foreign currency. 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 Under ASC 606, revenues are recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Group expects to be entitled to in exchange for those goods or services. The Group identifies its contracts with customers and all performance obligations within those contracts. The Group then determines the transaction price and allocates the transaction price to the performance obligations within the Group’s contracts with customers, recognizing revenue when, or as, the Group satisfies its performance obligations. The Group does not believe that significant management judgments are involved in revenue recognition, but the amount and timing of the Group’s revenues could be different for any period if management made different judgments. Certain customers may receive sales rebates, which are accounted for as variable consideration. The Group estimates annual expected revenue volume of each individual agent with reference to their historical results. The Group recognizes revenue for the amount of fees it receives from its advertisers, after deducting estimated sales rebates and net of value-added tax (“VAT”) under ASC 606. The Group believes that there will not be significant changes to its estimates of variable consideration. Revenue disaggregated by revenue source for the nine months ended September 30, 2020 and 2021 consists of the following: Nine Months Ended September 30, 2020 2021 (In thousands) Advertising and marketing revenues $ 1,032,678 $ 1,429,969 Value-added services revenues 143,843 210,827 Total revenues $ 1,176,521 $ 1,640,796 The Group enters into contracts with its customers, which may give rise to contract assets (unbilled revenue) or contract liabilities (deferred revenue). The payment terms and conditions within the Group’s contracts vary by the type and location of its customers and products or services purchased, the substantial majority of which are due in less than one year. Deferred revenues related to unsatisfied performance obligations at the end of the period are mainly from the customer advance of the advertising and marketing services and the sales of the fee-based services, such as VIP membership, live streaming, and virtual currency or in-game virtual items sold for game related services. The deferred revenues are recognized based on customers’ consumption or amortized on a straight-line basis through the service period for different products/services. Due to the generally short-term duration of the contracts, the majority of the performance obligations are satisfied in the following reporting period. The amount of revenue recognized that was included in the deferred revenue balance at the beginning of the period was $120.1 million for the nine months ended September 30, 2021. Practical Expedients and Exemptions The Group generally expenses sales commissions when incurred because the amortization period is generally one year or less. These costs are recorded within sales and marketing expenses. 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 or website 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. Under the CPM model, customers are obligated to pay when the advertisement is displayed. The Group’s majority revenue transactions are based on standard business terms and conditions, which are recognized net of agency rebates. The agency rebates are accounted for as variable consideration and are estimated during interim periods based on estimated annual revenue volume of each individual agent with reference to their historical results, which involves accounting judgment. The Group believes its estimation approach in variable consideration results in revenue recognition in a manner consistent with the underlying economics of the transaction. The Group’s contracts with customers may include multiple performance obligations, which primarily consist of combinations of service to allow customers to place advertisements on different areas of its platform or website. For such arrangements, advertising arrangements involving multiple deliverables are broken down into single-element arrangements based on their stand-alone selling price for revenue recognition purposes. The estimation of stand-alone selling price involves significant judgment, especially for the deliverables that have not been sold separately. For those deliverables, the Group determines best estimate of the stand-alone selling price by taking into consideration of the pricing of advertising areas of the Group’s platform or website with similar popularities and advertisements with similar formats and quoted prices from competitors and other market conditions. The Group believes the estimation approach in stand-alone selling price and allocation of the transaction price on a relative stand-alone selling price to each performance obligation results in revenue recognition in a manner consistent with the underlying economics of the transaction and the allocation principle included in ASC 606. Revenues recognized with reference to best estimation of selling price were immaterial for all periods presented. Most of such contracts have all performance obligations completed within one year. Changes in judgments on these assumptions and estimates could materially impact the timing or amount of revenue recognition. Contracts with customers of online advertising may require cooperation from third parties. The Group pays a predetermined portion of revenues earned from advertising contracts to the third parties such as key opinion leaders who participate in advertising and promotion activities by monetizing their social assets. The Group has determined that it is the principal in these transactions, as it has primary responsibility for fulfilling all the obligations related to advertising contracts. The Group has discretion in establishing pricing of the contracts and controls the advertising inventory before the delivery to customers. The Group records revenues derived from such contracts on a gross basis and the portion paid to the third parties is recognized as cost of revenues. 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 are received in exchange for advertising services are recorded based on the fair values of the goods or services received. Value-added services revenues The Group generates value-added services revenues principally from fee-based services, mainly including VIP membership, live streaming, and game-related services. Other value-added services revenues mainly include the revenues from the provision of traffic acquisition services to various customers. Revenues from these services are recognized when control of the promised services is transferred to customers, in an amount that reflects the consideration the Group expects to be entitled to in exchange for those services. VIP membership. Live streaming. The Group designs, creates and offers various virtual items for sales to users with pre-determined selling prices. Each virtual item is considered as a distinctive performance obligation. Sales proceeds are recorded as deferred revenue and recognized as revenue based on the consumption of the virtual items. Users can purchase and present virtual items to broadcasters to show support for their favorite ones. Under the arrangements with broadcasters or broadcaster agencies, the Group shares with them a portion of the revenues derived from the consumption of virtual items. Revenues derived from the sale of virtual items are recorded on a gross basis as the Group has determined that it acts as the principal to fulfill all obligations related to the live streaming services. The portion paid to broadcasters and/or broadcaster agencies is recognized as cost of revenues. The Group does not have further obligations to the user after the virtual items are consumed. Game-related services. Cost of revenues Cost of revenues consists mainly of costs associated with the maintenance of platform, which primarily include bandwidth and other infrastructure costs, revenue-share cost, advertisement production cost, labor cost and turnover taxes levied on the revenues, part of which were allocated from SINA. The Group is subject to 3% cultural business construction fees for its advertising and marketing revenues, which is included in cost of revenues. Starting from July 1 2019, the 3% cultural business construction fees was reduced to 1.5%. Moreover, as part of the measures taken by the government to ease the negative impact from Covid-19 pandemic, the cultural business construction fees were exempted for the fiscal years of 2020 and 2021.An aggregate of $15.7 million and $18.8 million cultural business construction fees was exempted for the nine months ended September 30, 2020 and 2021, 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. Pursuant to the adoption of ASC 606, the recognition of revenues and expenses at fair value for advertising barter transactions has resulted in an increase of revenue and advertising expenses. For the nine months ended September 30, 2020 and 2021, the advertising and promotional expenses were $230.3 million and $312.9 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. The Group expenses all costs incurred for the planning, 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 expense 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, if it is probable that the performance condition will be achieved 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 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. Uncertain tax positions. Short-term investments Short-term investments represent bank time deposits and wealth management products which are certain deposits with variable interest rates or principal not-guaranteed with certain financial institutions. Their original maturities are of greater than three months but less than one year. In accordance with ASC 825, Financial Instruments Credit losses In 2016, the FASB issued ASC Topic 326, which amends previously issued guidance regarding the impairment of financial instruments by creating an impairment model that is based on expected losses. The guidance is applicable to accounts receivable and the Group adopted ASC Topic 326 on January 1, 2020. Accounts receivable are recorded at the original amounts less an allowance for any potential uncollectible amounts. The Group makes estimates of expected credit and collectability trends for the allowance for credit losses based upon assessment of various factors, including historical experience, the age of the accounts receivable balances, credit-worthiness of the customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from the customers. The Group also provides specific provisions for allowance when facts and circumstances indicate that the receivable is unlikely to be collected. Expected credit losses for accounts receivable are recorded as general and administrative expenses on the unaudited interim condensed consolidated statements of comprehensive income. The initial impact of applying ASC Topic 326 on the consolidated financial statements is immaterial to the Group’s retained earnings as of January 1, 2020. ASC Topic 326 is also applicable to the loans to and interest receivable from other related parties included in the prepaid expenses and other current assets on the unaudited interim condensed consolidated balance sheets. Management estimates the allowance for credit losses on loans and interest receivable not sharing similar risk characteristic on an individual basis, based on lifetime expected credit losses of these loans and interest receivable by estimating loan collection schedule, then discounting these cash flows to their present values. The key factors considered when determining the above allowances for credit losses include estimated loan collection schedule, discount rate, financial condition and performance data of the borrowers and reasonable and supportable performance forecasts. Fair value measurements Financial instruments All financial assets and liabilities are recognized or disclosed at fair value in the unaudited interim condensed 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. The Group measures the equity method investments at fair value on a non-recurring basis only if an impairment charge were to be recognized. For those investments without readily determinable fair value, the Group measures them at fair value when observable price changes are identified or impairment charge was recognized. The fair values of the Group’s privately held investments as disclosed are determined based on the discounted cash flow model using the discount curve of market interest rates or based on the similar transaction price in the market directly. The fair values of the Group’s long-term investments in the equity securities of publicly listed companies are measured using quoted market prices. The Group’s non-financial assets, such as intangible assets, goodwill, fixed assets and operating lease assets, are measured at fair value only if they are determined to be impaired. 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 SINA, accounts payable, accrued and other liabilities approximates fair value because of their short-term nature. See Note 15 Fair Value Measurement Long-term investments Long-term investments are comprised of investments in publicly traded companies, privately held companies, and limited partnerships. The Group uses the equity method to account for ordinary-share-equivalent equity investments on which it has significant influence but does not own a majority equity interest or otherwise control. The Group measures investments in equity securities, other than equity method investments, at fair value through earnings. For those investments without readily determinable fair values, the Group elects to record these investments at cost, less impairment, plus or minus subsequent adjustments for observable price changes. Under this measurement alternative, changes in the carrying value of the investments will be recognized in unaudited interim condensed consolidated statement of comprehensive income, whenever there are observable price changes in orderly transactions for the identical or similar investment of the same issuer. Pursuant to ASC 321, for equity investments measured at fair value with changes in fair value recorded in earnings, the Group does not assess whether those securities are impaired. For equity investments without readily determinable fair value for which the Group has elected to use the measurement alternative, the Group makes a qualitative assessment of whether the investment is impaired at each reporting date, applying significant judgement in considering various factors and events including a) adverse performance of investees; b) adverse industry developments affecting investees; and c) adverse regulatory, social, economic or other developments affecting investees. If a qualitative assessment indicates that the investment is impaired, the Group estimates the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the Group recognizes an impairment loss in net income equal to the difference between the carrying value and fair value. Significant judgement is applied by the Group in estimating the fair value to determine if an impairment exists, and if so, to measure the impairment losses for these equity security investments. These judgements include the selection of valuation methods in estimating fair value and the determination of key valuation assumptions used,including cash flow forecasts and critical assumptions used in cash flow forecasts, such as the investees’ revenue growth rate, terminal growth rate, discount rate, selection of comparable companies and multiples, estimated volatility rate and discount for lack of marketability. Investments in entities which the Group can exercise significant influence and holds an investment in voting common shares or in-substance common shares (or both) of the investee but does not own a majority equity interest or control are accounted for using the equity method of accounting in accordance with ASC topic 323 (“ASC 323”), Investment - Equity Method and Joint Ventures. Under the equity method, the Group initially records its investments at cost and the difference between the cost of the equity investee and the fair value of the underlying equity in the net assets of the equity investee is recognized as equity method goodwill, which is included in the equity method investment on the unaudited interim condensed consolidated balance sheets. The Group subsequently adjusts the carrying amount of the investments to recognize the Group’s proportionate share of each equity investee’s net income or loss into earnings after the date of investment. The Group evaluates the equity method investments for impairment under ASC 323. An impairment loss on the equity method investments is recognized in earnings when the decline in value is determined to be other-than-temporary. In January 2020, the FASB issued ASU No. 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force). The amendments in this update clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. Early adoption is permitted. The Group adopted the ASU on January 1, 2021, which did not have a material impact on the unaudited interim condensed consolidated financial statements. 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 unaudited interim condensed consolidated statements of comprehensive income. Leases In February 2016, the FASB issued a new standard on leases, ASU 2016-02, “Leases (Topic 842)”, which requires a lessee to recognize assets and liabilities arising from operating leases. A lessee should recognize a liability to make lease payments (the Lease Liability) and a right-of-use asset (the Operating Lease Assets) representing its right to use the underlying asset for the lease term. For leases with a term of twelve months or less, a lessee is permitted to make an accounting policy choice not to recognize lease assets and lease liabilities. In July 2018, the FASB issued an amendment, ASU 2018-11, which provides another transition method in addition to the existing transition methods by allowing entities to initially apply the new leases standard at the effective date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption and to not retrospectively adjust prior periods financial statements. On January 1, 2019, the Group adopted the new lease standard using the transition method by applying the standard to all leases existing at the date of initial application. The Group chose to not recognize lease assets and lease liabilities for leases with a term of twelve months or less, to not separate non-lease components from lease components, and to not reassess lease classification, treatment of initial direct costs or whether an existing or expired contract contains a lease according to the practical expedients permitted under the transition method. The Group did not retrospectively adjust the prior comparative periods. Under the new lease standard, the Group determines if an arrangement is or contains a lease at inception. Right-of-use assets and liabilities are recognized at lease commencement date based on the present value of remaining lease payments over the lease terms. The Group considers only payments that are fixed and determinable at the time of lease commencement. 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 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, consolidated VIEs and VIEs’ subsidiaries. The Group assesses goodwill for impairment in accordance with ASC Subtopic 350-20 (“ASC 350-20”), Intangibles - Goodwill and Other: Goodwill 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 three Convertible debt and unsecured senior notes The Group determines the appropriate accounting treatment of its convertible debt in accordance with the terms in relation to the conversion feature. After considering the impact of such features, the Group may account for such instrument as a liability in its entirety, or separate the instrument into debt and equity components following the respective guidance described under ASC 815 Derivatives and Hedging Debt The debt discount, if any, together with related issuance cost are subsequently amortized as interest expense over the contractual life. The Group presented the issuance costs of debt as a direct deduction from the related debt during the periods presented. The unsecured senior notes are recognized initially at fair value, net of debt discounts or premiums, if any, issuance costs and other incidental fees, all of which are recorded as a direct deduction of the proceeds received from issuing the unsecured senior notes and the related accretion is recorded as interest expense in the unaudited interim condensed consolidated statement of comprehensive income over the estimated term using the effective interest method. 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 VIP membership, live streaming, and virtual currency or in-game virtual items sold for game related services. 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, |
Cash, Cash Equivalents and Shor
Cash, Cash Equivalents and Short-term Investments | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Cash, Cash Equivalents and Short-term Investments | ||
Cash, Cash Equivalents and Short-term Investments | 3. Cash, Cash Equivalents and Short-term Investments Cash, cash equivalents and short-term investments consist of the following: As of December 31, June 30, 2020 2021 (In thousands) Cash and cash equivalents: Cash $ 1,814,844 $ 2,005,106 Short-term investments: Bank time deposits 1,515,880 750,467 Wealth management products 166,168 180,355 Subtotal 1,682,048 930,822 Total cash, cash equivalents and short-term investments $ 3,496,892 $ 2,935,928 The carrying amounts of cash, cash equivalents and short-term investments approximate fair value. Interest income was $45.6 million and $40.1 million for the six months ended June 30, 2020 and 2021, respectively. The maturity dates for the time deposits and wealth management products were within one year. | 3. Cash, Cash Equivalents and Short-term Investments Cash, cash equivalents and short-term investments consist of the following: As of December 31, September 30, 2020 2021 (In thousands) Cash and cash equivalents: Cash $ 1,814,844 $ 1,828,691 Short-term investments: Bank time deposits 1,515,880 665,983 Wealth management products 166,168 212,504 Subtotal 1,682,048 878,487 Total cash, cash equivalents and short-term investments $ 3,496,892 $ 2,707,178 The carrying amounts of cash, cash equivalents and short-term investments approximate fair value. Interest income was $65.7 million and $56.9 million for the nine months ended September 30, 2020 and 2021, respectively. The maturity dates for the time deposits and wealth management products were within one year. |
Long-term Investments
Long-term Investments | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Long-term Investments | ||
Long-term Investments | 4. Long-term Investments Long-term investments comprised of investments in publicly traded companies, privately held companies, and limited partnerships. The following sets forth the changes in the Group’s long-term investments: Equity Securities Equity Securities With Without Readily Readily Determinable Fair Determinable Fair Values Equity Method Values Total (In thousands) Balance at December 31, 2020 $ 579,084 $ 311,161 $ 289,221 $ 1,179,466 Investments made/transfers from prepayments 47,957 103,932 — 151,889 Income from equity method investment, net — 13,605 — 13,605 Dividend received from equity method investments — (2,880) — (2,880) Disposal of investments (16,883) — (4,946) (21,829) Changes from measurement alternative to consolidation (Note 6) (66,415) — — (66,415) Impairment of investments (66,625) — — (66,625) Fair value change through earnings (26,810) — (42,685) (69,495) Currency translation adjustment 3,150 2,392 — 5,542 Balance at June 30, 2021 $ 453,458 $ 428,210 $ 241,590 $ 1,123,258 In the second quarter of 2021, the Group obtained control of its investment in an investee operating a leading mobile photo and video application in China, Wuta Application, through a step acquisition of consideration of $39.5 million. The Group recorded $27.6 million fair value change loss for the equity interest previously held by the Group immediately prior to the step acquisition. The impact of the transaction was reflected in the changes from measurement alternative to consolidation. For the six months ended June 30, 2021, the Group invested in private high-tech companies totaling $48.0 million, which were accounted for under investments without readily determinable fair values. These investments were to further expand and strengthen the Group’s ecosystem and mainly included a further investment of $39.5 million in a leading mobile photo and video application in China during the six months ended June 30, 2021. The Group also invested $103.9 million in companies, which were accounted for under equity method for the six months ended June 30, 2021. These investments mainly included several investment funds for the six months ended June 30, 2021. The Group used measurement alternative for recording equity investments without readily determinable fair values at cost, less impairment, adjusted for subsequent observable price changes. Based on ASU 2016-01, entities that elect the measurement alternative will report changes in the carrying value of the equity investments in current earnings. If measurement alternative is used, changes in the carrying value of the equity investment will be recognized whenever there are observable price changes in orderly transactions for the identical or similar investment of the same issuer, and impairment charges will be recorded when any impairment indicators are noted and the fair value is lower than the carrying value. The Group classifies the valuation techniques on investments that use similar identifiable transaction prices as Level 2 of fair value measurements. The following table summarizes the total carrying value of the equity investments accounted for under the measurement alternative as of June 30, 2021, including cumulative upward and downward adjustments made to the initial cost basis of the securities. The Group recorded $94.2 million downward adjustment for the six months ended June 30, 2021, which included $66.6 million impairment for equity investments accounted for under the measurement alternative in the period. The Group recorded a $59.4 million partial impairment for investment in Yixia Tech Co., Ltd. for the six months ended June 30, 2021 due to its unsatisfied financial performance with no obvious upturn or potential financing solutions in the foreseeable future. Cumulative Results (In thousands) Initial cost basis $ 835,552 Upward adjustments 82,217 Downward adjustments (477,891) Foreign currency translation 13,580 Total carrying value at June 30, 2021 $ 453,458 As of June 30, 2021, investment in Didi Global Inc. (“Didi”) amounting to $142.0 million was accounted for under measurement alternative. Didi completed its initial public offering and its shares started trading on July 1, 2021, China time. Therefore, investment in Didi was transferred from measurement alternative to equity securities with readily determinable fair value from July 1, 2021, with the fair value determined based on the quoted prices in active market. Investments in marketable equity securities are valued using the market approach based on the quoted prices in active markets at the reporting dates. The Group classified the valuation techniques that use these inputs as Level 1 of fair value measurements. The Group recorded $42.7 million fair value loss, which was unrealized in the first half year of 2021, and the fair value of the marketable securities was $241.6 million as of June 30, 2021. The following table shows the carrying amount and fair value of the marketable securities: Gross Gross Cost Unrealized Unrealized Fair Basis Gains Losses Value (In thousands) Showworld $ 81,385 $ 204,675 $ — $ 286,060 Other marketable securities 15,274 — (12,113) 3,161 December 31, 2020 $ 96,659 $ 204,675 $ (12,113) $ 289,221 Showworld $ 81,385 $ 160,205 $ — $ 241,590 June 30, 2021 $ 81,385 $ 160,205 $ — $ 241,590 | 4. Long-term Investments Long-term investments comprised of investments in publicly traded companies, privately held companies, and limited partnerships. The following sets forth the changes in the Group’s long-term investments: Equity Securities Equity Securities With Without Readily Readily Determinable Fair Determinable Fair Values Equity Method Values Total (In thousands) Balance at December 31, 2020 $ 579,084 $ 311,161 $ 289,221 $ 1,179,466 Investments made/transfers from prepayments 67,957 159,584 — 227,541 Income from equity method investment, net — 17,688 — 17,688 Dividend received from equity method investments — (11,695) — (11,695) Disposal of investments (16,883) — (4,946) (21,829) Changes from measurement alternative to consolidation (Note 6) (66,415) — — (66,415) Reclassification of equity investment without readily determinable fair values to those with readily determinable fair values (142,000) — 142,000 — Impairment on investments (102,594) — — (102,594) Fair value change through earnings (26,810) — (6,263) (33,073) Currency translation adjustment 3,565 2,895 — 6,460 Balance at September 30, 2021 $ 295,904 $ 479,633 $ 420,012 $ 1,195,549 For the nine months ended September 30, 2021, the Group invested in private high-tech companies totaling $68.0 million, which were accounted for under investments without readily determinable fair values. These investments were to further expand and strengthen the Group’s ecosystem and mainly included a further investment of $39.5 million in a leading mobile photo and video application in China during the nine months ended September 30, 2021. The Group obtained control of the company operating the mobile photo and video application through the step acquisition and recorded $27.6 million fair value change loss for the equity interest previously held by the Group immediately prior to the step acquisition. The impact of the transaction was reflected in the changes from measurement alternative to consolidation. The Group also invested $159.6 million in companies, which mainly included several investment funds and were accounted for under equity method, for the nine months ended September 30, 2021. The Group used measurement alternative for recording equity investments without readily determinable fair values at cost, less impairment, adjusted for subsequent observable price changes. Based on ASU 2016-01, entities that elect the measurement alternative will report changes in the carrying value of the equity investments in current earnings. If measurement alternative is used, changes in the carrying value of the equity investment will be recognized whenever there are observable price changes in orderly transactions for the identical or similar investment of the same issuer, and impairment charges will be recorded when any impairment indicators are noted and the fair value is lower than the carrying value. The Group classifies the valuation techniques on investments that use similar identifiable transaction prices as Level 2 of fair value measurements. The following table summarizes the total carrying value of the equity investments accounted for under the measurement alternative as of September 30, 2021, including cumulative upward and downward adjustments made to the initial cost basis of the securities. The Group recorded $130.2 million downward adjustment for the nine months ended September 30, 2021, which included $102.6 million impairment for equity investments accounted for under the measurement alternative in the period. The Group recorded a $75.3 million full impairment for investment in Yixia Tech Co., Ltd. for the nine months ended September 30, 2021 due to its unsatisfied financial performance with no obvious upturn or potential financing solutions in the foreseeable future. Cumulative Results (In thousands) Initial cost basis $ 713,552 Upward adjustments 82,217 Downward adjustments (513,861) Foreign currency translation 13,996 Total carrying value at September 30, 2021 $ 295,904 Investments in marketable equity securities are valued using the market approach based on the quoted prices in active markets at the reporting dates. The Group classified the valuation techniques that use these inputs as Level 1 of fair value measurements. The Group recorded $6.3 million fair value loss, which was unrealized in the nine months ended September 30, 2021, and the fair value of the marketable securities was $420.0 million as of September 30, 2021. The following table shows the carrying amount and fair value of the marketable securities: Gross Gross Cost Unrealized Unrealized Fair Basis Gains Losses Value (In thousands) Showworld $ 81,385 $ 204,675 $ — $ 286,060 Other marketable securities 15,274 — (12,113) 3,161 December 31, 2020 $ 96,659 $ 204,675 $ (12,113) $ 289,221 Showworld $ 81,385 $ 105,384 $ — $ 186,769 Didi $ 142,000 $ 91,243 $ — $ 233,243 September 30, 2021 $ 223,385 $ 196,627 $ — $ 420,012 One of the Group’s investees, Didi Global Inc. (“Didi”), a company operating a mobility technology platform, completed its initial public offering and started trading on July 1, 2021, China time. Therefore, investment in Didi amounting to $142.0 million was transferred from measurement alternative to equity securities with readily determinable fair value, and a fair value change gain of $91.2 million was recorded for the nine months ended September 30, 2021. The Group recorded a fair value change loss of $99.3 million in Showworld for the nine months ended September 30, 2021. |
Leases
Leases | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Leases | ||
Leases | 5. Leases The Group has operating leases primarily for office spaces in China. The determination of whether an arrangement is or contains a lease is made at inception by evaluating whether the arrangement conveys the right to use an identified asset and whether the Group obtains substantially all of the economic benefits from and has the ability to direct the use of the asset. Operating lease assets and liabilities are included in operating lease right-of-use assets, operating lease liabilities, short-term, and operating lease liabilities, long-term on the Group’s consolidated balance sheets. The Group has chosen to not recognize lease assets and lease liabilities for leases with a term of twelve months or less on the consolidated balance sheets. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of lease payments over the lease terms at the lease commencement dates. The Group uses its incremental borrowing rate in determining the present value of lease payments. The incremental borrowing rate is a hypothetical rate based on the Group’s understanding of what interest the Group would pay in order to obtain a borrowing with an amount equivalent to the lease payments in a similar economic environment over the lease term on a collateralized basis from banks in China. Certain lease agreements contain an option for the Group to renew a lease for a term agreed by the Group and the lessor or an option to terminate a lease earlier than the maturity dates. The Group considers these options, which may be elected at the Group’s sole discretion, in determining the lease term on a lease-by-lease basis. The Group’s lease agreements generally do not contain any residual value guarantees or material restrictive covenants. Certain of the Group’s leases contain free or escalating rent payment terms. The Group’s lease agreements generally contain lease and non-lease components. Non-lease components primarily include payments for maintenance and utilities. The Group has chosen to combine payments for non-lease components with lease payments and accounted them together as a single lease component. Payments under the lease arrangements are primarily fixed. However, for arrangements accounted for as a single lease component, there may be variability in future lease payments as the amount of the non-lease components is typically revised from one period to the next. Additionally, certain lease agreements with SINA contain variable payments, which are determined based on actual SINA headquarters spaces occupied by the Group and are expensed as incurred and not included in the operating lease assets and liabilities. The components of lease cost for the six months ended June 30, 2020 and 2021 were as follows: Six Months Ended June 30, 2020 2021 (Unaudited) (In thousands) Operating lease cost $ 2,246 $ 3,339 Short-term lease cost 1,611 1,921 Variable lease cost 2,131 2,598 Total lease cost $ 5,988 $ 7,858 Other information related to leases was as follows: Six Months Ended June 30, 2020 2021 (Unaudited) (In thousands) Supplemental Cash Flows Information: Cash paid for amounts included in the measurement of lease liabilities: Cash paid for operating leases $ (2,589) $ (3,938) Operating lease assets obtained in exchange for operating lease liabilities $ — $ 8,287 Maturities of lease liabilities under operating leases as of June 30, 2021 were as follows: Twelve Months Ended June 30, (In thousands) 2022 $ 6,020 2023 2,020 2024 1,612 2025 1,434 2026 and thereafter 1,714 Total future payments for recognized leasing assets $ 12,800 Less: imputed interest 1,052 Total lease liabilities $ 11,748 As of June 30, 2021, operating leases recognized in lease liabilities have average remaining lease terms of 3.6 years and weighted-average discount rate of 5%. As of June 30, 2021, the Group had no lease contract that has been entered into but not yet commenced. | 5. Leases The Group has operating leases primarily for office spaces in China. The determination of whether an arrangement is or contains a lease is made at inception by evaluating whether the arrangement conveys the right to use an identified asset and whether the Group obtains substantially all of the economic benefits from and has the ability to direct the use of the asset. Operating lease assets and liabilities are included in operating lease right-of-use assets, operating lease liabilities, short-term, and operating lease liabilities, long-term on the Group’s unaudited interim condensed consolidated balance sheets. The Group has chosen to not recognize lease assets and lease liabilities for leases with a term of twelve months or less on the unaudited interim condensed consolidated balance sheets. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of lease payments over the lease terms at the lease commencement dates. The Group uses its incremental borrowing rate in determining the present value of lease payments. The incremental borrowing rate is a hypothetical rate based on the Group’s understanding of what interest the Group would pay in order to obtain a borrowing with an amount equivalent to the lease payments in a similar economic environment over the lease term on a collateralized basis from banks in China. Certain lease agreements contain an option for the Group to renew a lease for a term agreed by the Group and the lessor or an option to terminate a lease earlier than the maturity dates. The Group considers these options, which may be elected at the Group’s sole discretion, in determining the lease term on a lease-by-lease basis. The Group’s lease agreements generally do not contain any residual value guarantees or material restrictive covenants. Certain of the Group’s leases contain free or escalating rent payment terms. The Group’s lease agreements generally contain lease and non-lease components. Non-lease components primarily include payments for maintenance and utilities. The Group has chosen to combine payments for non-lease components with lease payments and accounted them together as a single lease component. Payments under the lease arrangements are primarily fixed. However, for arrangements accounted for as a single lease component, there may be variability in future lease payments as the amount of the non-lease components is typically revised from one period to the next. Additionally, certain lease agreements with SINA contain variable payments, which are determined based on actual SINA headquarters spaces occupied by the Group and are expensed as incurred and not included in the operating lease assets and liabilities. The components of lease cost for the nine months ended September 30, 2020 and 2021 were as follows: Nine Months Ended September 30, 2020 2021 (In thousands) Operating lease cost $ 3,515 $ 5,206 Short-term lease cost 2,336 2,940 Variable lease cost 3,349 4,041 Total lease cost $ 9,200 $ 12,187 Other information related to leases was as follows: Nine Months Ended September 30, 2020 2021 (In thousands) Supplemental Cash Flows Information: Cash paid for amounts included in the measurement of lease liabilities: Cash paid for operating leases $ (3,922) $ (5,824) Operating lease assets obtained in exchange for operating lease liabilities $ 1,183 $ 8,301 Maturities of lease liabilities under operating leases as of September 30, 2021 were as follows: Twelve Months Ended September 30, (In thousands) 2022 $ 5,001 2023 1,979 2024 1,617 2025 1,436 2026 and thereafter 1,358 Total future payments for recognized leasing assets $ 11,391 Less: imputed interest 1,155 Total lease liabilities $ 10,236 As of September 30, 2021, operating leases recognized in lease liabilities have average remaining lease terms of 3.6 years and weighted-average discount rate of 5%. As of September 30, 2021, the Group had no lease contract that has been entered into but not yet commenced. |
Goodwill, Intangible Assets and
Goodwill, Intangible Assets and Acquisitions | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Goodwill, Intangible Assets and Acquisitions | ||
Goodwill, Intangible Assets and Acquisitions | 6. Goodwill, Intangible Assets and Acquisitions In the second quarter of 2021, the Group acquired another 51.2% equity interest of an investee operating a leading mobile photo and video application in China, Wuta application, in which the Group previously held 34.8% equity interest, with a cash consideration of $39.5 million. The Group obtained the control and held 86% equity interest in the investee upon completion of the transaction on May 1, 2021. An independent valuation firm was engaged by the Group to help the management determine the fair value of assets and liabilities obtained from the transaction. The identifiable intangible assets acquired on the acquisition date included user base, domain names and operating system of $16.5 million with estimated lives ranging from three The consideration of acquisition of the mobile app company was allocated based on the fair value of the assets acquired and the liabilities assumed as follows: As of May 1, 2021 (In thousands) Consideration $ 39,540 Fair value of previously held equity interest 26,875 Non-controlling interest 10,811 Total 77,226 Cash and short-term investments acquired 5,786 Other assets acquired 6,801 Identifiable intangible assets acquired 16,495 Goodwill 51,034 Liabilities assumed (2,890) Total $ 77,226 The acquisition mentioned above resulted an immaterial impact to revenues and net income for the six months end 2021. Since it did not have a material impact on the Group’s consolidated financial statements, pro forma disclosures have not been presented. Apart from what have been mentioned above, there was no acquisition during the six months ended June 30, 2021. The following sets forth the changes in the Group’s goodwill by segment: Advertising & Value-added Marketing services Total (In thousands) Balance as of December 31, 2020 $ 30,899 $ 30,813 $ 61,712 Acquisition of the company operating Wuta application 51,034 — 51,034 Currency translation adjustment 499 359 858 Balance as of June 30, 2021 $ 82,432 $ 31,172 $ 113,604 The increase of the balance in the six months ended June 30, 2021 was mainly due to the goodwill arising from the acquisition of the company operating Wuta application completed in the second quarter of 2021. The following table summarizes the Group’s intangible assets arising from acquisitions: As of December 31, 2020 As of June 30, 2021 Accumulated Accumulated Cost Amortization Net Cost Amortization Net (In thousands) (In thousands) Game related $ 127,238 $ (2,199) $ 125,039 $ 128,725 $ (8,905) $ 119,820 Technology 9,544 (4,417) 5,127 10,012 (4,918) 5,094 Trademark and Domain name 12,788 (1,542) 11,246 19,763 (2,792) 16,971 Supplier-relationship 10,253 (4,689) 5,564 10,373 (5,798) 4,575 Others 2,449 (2,449) — 13,706 (2,989) 10,717 Total $ 162,272 $ (15,296) $ 146,976 $ 182,579 $ (25,402) $ 157,177 The amortization expense for the six months ended June 30, 2020 and 2021 was $1.6 million and $9.9 million, respectively. As of June 30, 2021, estimated amortization expenses for future periods are expected as follows: Year Ended December 31, (In thousands) The remainder of 2021 $ 11,348 2022 22,347 2023 20,858 2024 19,191 2025 and thereafter 83,433 Total expected amortization expense $ 157,177 | 6. Goodwill, Intangible Assets and Acquisitions In the second quarter of 2021, the Group acquired another 51.2% equity interest of an investee operating a leading mobile photo and video application in China, Wuta application, in which the Group previously held 34.8% equity interest, with a cash consideration of $39.5 million. The Group obtained the control and held 86% equity interest in the investee upon completion of the transaction on May 1, 2021. An independent valuation firm was engaged by the Group to help the management determine the fair value of assets and liabilities obtained from the transaction. The identifiable intangible assets acquired on the acquisition date included user base, domain names and operating system of $16.5 million with estimated lives ranging from three The consideration of acquisition of the mobile app company was allocated based on the fair value of the assets acquired and the liabilities assumed as follows: As of May 1, 2021 (In thousands) Consideration $ 39,540 Fair value of previously held equity interest 26,875 Non-controlling interest 10,811 Total 77,226 Cash and short-term investments acquired 5,786 Other assets acquired 6,801 Identifiable intangible assets acquired 16,495 Goodwill 51,034 Liabilities assumed (2,890) Total $ 77,226 In August, 2021, the Group acquired an E-sports team and related assets. An independent valuation firm was engaged by the Group to help the management determine the fair value of assets and liabilities obtained from the transaction. The identifiable intangible assets acquired on acquisition date included game related assets of $19.3 million with estimated lives of ten years. The intangible assets were measured at fair value upon acquisition primarily using royalty savings method and multi-periods excess earning method. Key assumptions used in determining the fair value of these intangible assets include discount rate, terminal growth rate and royalty rate. The consideration of acquisition of the E-sports team and related assets was allocated based on the fair value of the assets acquired and the liabilities assumed as follows: As of August 1, 2021 (In thousands) Consideration $ 30,953 Identifiable intangible assets acquired 19,274 Goodwill 14,745 Liabilities assumed (3,066) Total $ 30,953 The acquisition mentioned above resulted an immaterial impact to revenues and net income for the nine months ended September 30, 2021. Since it did not have a material impact on the Group’s unaudited interim condensed consolidated financial statements, pro forma disclosures have not been presented. Apart from what have been mentioned above, there was no acquisition during the nine months ended September 30, 2021. The following sets forth the changes in the Group’s goodwill by segment: Advertising & Value-added Marketing services Total (In thousands) Balance as of December 31, 2020 $ 30,899 $ 30,813 $ 61,712 Acquisition of the company operating Wuta application 51,034 — 51,034 Acquisition of an E-sports team — 14,745 14,745 Currency translation adjustment 638 447 1,085 Balance as of September 30, 2021 $ 82,571 $ 46,005 $ 128,576 The increase of the balance in the nine months ended September 30, 2021 was mainly due to the goodwill arising from the acquisition of the company operating Wuta application and the acquisition of the E-sports team and related assets. The following table summarizes the Group’s intangible assets arising from acquisitions: As of December 31, 2020 As of September 30, 2021 Accumulated Accumulated Cost Amortization Net Cost Amortization Net (In thousands) (In thousands) Game related $ 127,238 $ (2,199) $ 125,039 $ 148,262 $ (12,588) $ 135,674 Technology 9,544 (4,417) 5,127 10,029 (5,172) 4,857 Trademark and Domain name 12,788 (1,542) 11,246 19,796 (3,595) 16,201 Supplier-relationship 10,253 (4,689) 5,564 10,391 (6,336) 4,055 Others 2,449 (2,449) — 13,729 (3,760) 9,969 Total $ 162,272 $ (15,296) $ 146,976 $ 202,207 $ (31,451) $ 170,756 The amortization expense for the nine months ended September 30, 2020 and 2021 was $2.5 million and $15.9 million, respectively. As of September 30, 2021, estimated amortization expenses for future periods are expected as follows: Year Ended December 31, (In thousands) The remainder of 2021 $ 6,166 2022 24,317 2023 22,825 2024 21,156 2025 and thereafter 96,292 Total expected amortization expense $ 170,756 |
Stock-Based Compensation
Stock-Based Compensation | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Stock-Based Compensation | ||
Stock-Based Compensation | 7. Stock-Based Compensation In March 2014, the Company adopted the 2014 Share Incentive Plan (the “2014 Plan”), which included the remaining 4.6 million shares from the terminated 2010 Share Incentive Plan, plus an additional 1.0 million shares. On January 1, 2015, shares in the 2014 Plan, which has 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 talents. Stock-based compensation related to the grants is amortized generally over four years on a straight-line basis (generally one year for performance-based restricted shares). The following table sets forth the stock-based compensation included in each of the relevant accounts: Six Months Ended June 30, 2020 2021* (Unaudited) (In thousands) Cost of revenues $ 2,502 $ 3,240 Sales and marketing 4,263 5,549 Product development 14,452 18,213 General and administrative 8,971 9,219 $ 30,188 $ 36,221 * Excluded non-cash stock-based compensation of $1.6 million to SINA employees charged through Amount due from SINA for the six months end June 30, 2021. The following table sets forth a summary of the number of shares available for issuance: Shares Available (In thousands) December 31, 2020 12,495 Addition — Granted* (1,098) Cancelled/expired/forfeited 277 June 30, 2021 11,674 * During the six months ended June 30, 2021, 1.1 million restricted share units were granted under the 2014 Plan. No options were granted for the six months ended June 30, 2021. Stock Options The following table sets forth a summary of option activities under the Company’s stock option program: Weighted Average Options Weighted Average Remaining Aggregate Outstanding Exercise Price Contractual Life Intrinsic Value (In thousands) (In years) (In thousands) December 31, 2020 551 $ 28.85 5.8 $ 6,683 Granted — — Exercised (72) $ 3.50 Cancelled/expired/forfeited (10) 32.68 June 30, 2021 469 $ 32.68 6.1 $ 9,342 Vested and expected to vest as of June 30, 2021 423 $ 32.68 6.1 $ 8,428 Exercisable as of June 30, 2021 — $ — — $ — The total intrinsic value of options exercised for the six months ended June 30, 2021 was $3.4 million. 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, 2020 and June 30, 2021 was $40.99 and $52.62, respectively. Cash received from the exercise of stock options during the six months ended June 30, 2020 and 2021 was $0.1 million and $0.2 million, respectively. As of June 30, 2021, unrecognized compensation cost (adjusted for estimated forfeitures) was $4.5 million, which was related to non-vested stock options granted to the Company’s employees and directors. This cost is expected to be recognized over a weighted-average period of 3.1 years. Information regarding stock options outstanding at June 30, 2021 is summarized below: Weighted Weighted Weighted Average Options Average Options Average Remaining Range of Exercise Prices Outstanding Exercise Price Exercisable Exercise Price Contractual Life (In thousands) (In thousands) (In years) $32.68 469 $ 32.68 — $ — — Restricted Share Units Summary of Performance-Based Restricted Share Units The following table sets forth a summary of performance-based restricted share unit activities: Weighted-Average Grant Date Shares Granted Fair Value (In thousands) December 31, 2020 17 $ 36.49 Awarded 1 $ 47.09 Vested (2) $ 36.49 Cancelled (15) $ 36.49 June 30, 2021 1 $ 47.09 As of June 30, 2021, there was no material unrecognized compensation cost (adjusted for estimated forfeitures), which was related to performance-based restricted share units granted to the Company’s employees. Summary of Service-Based Restricted Share Units The following table sets forth a summary of service-based restricted share unit activities: Weighted- Average Shares Grant Date Granted Fair Value (In thousands) December 31, 2020 4,324 $ 41.86 Awarded 1,097 $ 46.06 Vested (520) $ 52.65 Cancelled (252) $ 38.98 June 30, 2021 4,649 $ 41.81 As of June 30, 2021, unrecognized compensation cost (adjusted for estimated forfeitures) was $134.4 million,which was related to non-vested service-based restricted share units granted to the Company’s employees and directors. This cost is expected to be recognized over a weighted-average period of 2.7 years. The total fair value based on the vesting date of the restricted share units vested was $27.4 million for the six months ended June 30, 2021. | 7. Stock-Based Compensation In March 2014, the Company adopted the 2014 Share Incentive Plan (the “2014 Plan”), which included the remaining 4.6 million shares from the terminated 2010 Share Incentive Plan, plus an additional 1.0 million shares. On January 1, 2015, shares in the 2014 Plan, which has 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 talents. Stock-based compensation related to the grants is amortized generally over four years on a straight-line basis (generally one year for performance-based restricted shares). The following table sets forth the stock-based compensation included in each of the relevant accounts: Nine Months Ended September 30, 2020 2021* (In thousands) Cost of revenues $ 3,909 $ 5,690 Sales and marketing 6,886 10,249 Product development 22,890 29,260 General and administrative 14,100 16,059 $ 47,785 $ 61,258 * Excluded non-cash stock-based compensation of $5.2 million to SINA employees charged through Amount due from SINA for the nine months end September 30, 2021. The following table sets forth a summary of the number of shares available for issuance: Shares Available (In thousands) December 31, 2020 12,495 Addition — Granted* (4,407) Cancelled/expired/forfeited 613 September 30, 2021 8,701 * During the nine months ended September 30, 2021, 4.4 million restricted share units were granted under the 2014 Plan. No options were granted for the nine months ended September 30, 2021. Stock Options The following table sets forth a summary of option activities under the Company’s stock option program: Weighted Average Options Weighted Average Remaining Aggregate Outstanding Exercise Price Contractual Life Intrinsic Value (In thousands) (In years) (In thousands) December 31, 2020 551 $ 28.85 5.8 $ 6,683 Granted — — Exercised (102) $ 12.11 Cancelled/expired/forfeited (54) $ 32.68 September 30, 2021 395 $ 32.68 5.9 $ 5,847 Vested and expected to vest as of September 30, 2021 359 $ 32.68 5.9 $ 5,316 Exercisable as of September 30,2021 85 $ 32.68 5.9 $ 1,263 The total intrinsic value of options exercised for the nine months ended September 30, 2021 was $4.0 million. 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, 2020 and September 30, 2021 was $40.99 and $47.49, respectively. Cash received from the exercise of stock options during the nine months ended September 30, 2020 and 2021 was $0.1 million and $1.2 million, respectively. As of September 30, 2021, unrecognized compensation cost (adjusted for estimated forfeitures) was $3.6 million, which was related to non-vested stock options granted to the Company’s employees and directors. This cost is expected to be recognized over a weighted-average period of 2.9 years. Information regarding stock options outstanding at September 30, 2021 is summarized below: Weighted Weighted Weighted Average Options Average Options Average Remaining Range of Exercise Prices Outstanding Exercise Price Exercisable Exercise Price Contractual Life (In thousands) (In thousands) (In years) $32.68 395 $ 32.68 85 $ 32.68 5.9 Restricted Share Units Summary of Performance-Based Restricted Share Units The following table sets forth a summary of performance-based restricted share unit activities: Weighted-Average Grant Date Shares Granted Fair Value (In thousands) December 31, 2020 17 $ 36.49 Awarded 15 $ 54.08 Vested (2) $ 38.78 Cancelled (19) $ 40.63 September 30, 2021 11 $ 54.17 As of September 30, 2021, there was no material unrecognized compensation cost (adjusted for estimated forfeitures), which was related to performance-based restricted share units granted to the Company’s employees. Summary of Service-Based Restricted Share Units The following table sets forth a summary of service-based restricted share unit activities: Weighted- Average Shares Grant Date Granted Fair Value (In thousands) December 31, 2020 4,324 $ 41.86 Awarded 4,392 $ 50.44 Vested (1,299) $ 44.28 Cancelled (540) $ 44.01 September 30, 2021 6,877 $ 46.72 As of September 30, 2021, unrecognized compensation cost (adjusted for estimated forfeitures) was $232.9 million, which was related to non-vested service-based restricted share units granted to the Company’s employees and directors. This cost is expected to be recognized over a weighted-average period of 3.3 years. The total fair value based on the vesting date of the restricted share units vested was $66.9 million for the nine months ended September 30, 2021. |
Other Balance Sheet Components
Other Balance Sheet Components | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Other Balance Sheet Components | ||
Other Balance Sheet Components | 8. Other Balance Sheet Components As of June 30, December 31, June 30, 2020 2020 2021 (Unaudited) (In thousands) Accounts receivable, net: Due from third parties $ 343,220 $ 503,126 Due from Alibaba 135,321 122,991 Due from other related parties 48,625 40,972 Total gross amount $ 527,166 $ 667,089 Allowance for credit losses: Balance at the beginning of the year/period (36,594) (36,594) (35,156) Additional provision charged to expenses, net (25,233) (53,124) (10,444) Write-off 22,587 54,562 9,720 Balance at the end of the year/period (39,240) (35,156) (35,880) $ 492,010 $ 631,209 Prepaid expenses and other current assets: Rental and other deposits $ 1,186 $ 1,169 Deductible value-added taxes 598 4,960 Investment prepayment (1) 15,308 15,487 Loans to and interest receivable from other related parties (2) (Note 10) 158,622 336,558 Loans to and interest receivable from third parties (2) 41,784 148,891 Advertising prepayment 18,888 11,907 Prepayment to outsourced service providers 3,719 3,727 Amounts deposited by users (3) 45,745 49,849 Content fees 3,080 352 Others 7,827 14,393 $ 296,757 $ 587,293 Property and equipment, net: Computers and equipment $ 165,880 $ 173,498 Leasehold improvements 6,429 6,924 Furniture and fixtures 2,159 2,437 Others 5,077 6,431 Property and equipment, gross 179,545 189,290 Accumulated depreciation (118,913) (128,257) $ 60,632 $ 61,033 Other non-current assets Investment related deposits (4) $ 15,450 $ 408,432 Prepayment for purchase of SINA Plaza (5) — 131,636 Deferred tax assets 27,020 27,279 Others 2,126 14,998 $ 44,596 $ 582,345 Accrued and other liabilities (6) : Payroll and welfare $ 126,023 $ 138,603 Marketing expenses 59,410 79,173 Sales rebates 222,064 312,418 Professional fees 3,880 7,431 VAT and other tax payable 49,971 54,744 Amounts due to users (3) 45,745 49,849 Unpaid consideration for acquisition 10,280 — Unpaid consideration for investment 19,257 434 Interest payable for convertible debt and unsecured senior notes 923 27,579 Others 19,200 22,159 $ 556,753 $ 692,390 (1) For the year ended December 31,2020 and six months ended June 30, 2021, the Group recognized $1.5 million and nil of impairment charges on investment prepayment (all fully impaired), respectively, due to the deterioration of investees’ operations resulting in their inability to refund the prepayments. (2) Loans to related parties and third parties incurred for the six months ended June 30, 2021 were non-trade in nature. (3) Weibo wallet enables users to conduct interest-generation activities on Weibo, such as handing out “red envelopes” 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 receivable 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. (4) As of June 30, 2021, investment related deposits primarily included $76.7 million in a micro loan company, $79.0 million in an insurance company and $221.9 million in a game company. These non-current assets will be transferred to long-term investment when the legal procedures are completed. (5) Weibo entered into a letter of intent to purchase the office building (SINA Plaza) from SINA. As of June 30, 2021, the balance of prepayment for SINA Plaza was $131.6 million. (6) Include amounts due to third parties, employees, related parties (Note 10) and Weibo wallet users. | 8. Other Balance Sheet Components As of September 30, December 31, September 30, 2020 2020 2021 (In thousands) Accounts receivable, net: Due from third parties $ 343,220 $ 579,502 Due from Alibaba 135,321 98,262 Due from other related parties 48,625 41,229 Total gross amount $ 527,166 $ 718,993 Allowance for credit losses: Balance at the beginning of the year/period (36,594) (36,594) (35,156) Additional provision charged to expenses, net (52,900) (53,124) (13,160) Write-off 32,670 54,562 13,033 Balance at the end of the year/period (56,824) (35,156) (35,283) $ 492,010 $ 683,710 Prepaid expenses and other current assets: Rental and other deposits $ 1,186 $ 876 Deductible value-added taxes 598 4,545 Investment prepayment (1) 15,308 310 Loans to and interest receivable from other related parties (2) (Note 10) 158,622 283,904 Loans to and interest receivable from third parties (2) 41,784 575,323 Advertising prepayment 18,888 9,471 Prepayment to outsourced service providers 3,719 3,809 Amounts deposited by users (3) 45,745 51,412 Content fees 3,080 199 Others 7,827 14,195 $ 296,757 $ 944,044 Property and equipment, net: Computers and equipment $ 165,880 $ 183,829 Leasehold improvements 6,429 6,923 Furniture and fixtures 2,159 2,310 Others 5,077 7,150 Property and equipment, gross 179,545 200,212 Accumulated depreciation (118,913) (135,816) $ 60,632 $ 64,396 Other non-current assets Investment related deposits (4) $ 15,450 $ 410,741 Prepayment for purchase of SINA Plaza (5) — 131,859 Deferred tax assets 27,020 27,325 Others 2,126 7,702 $ 44,596 $ 577,627 Accrued and other liabilities (6) : Payroll and welfare $ 126,023 $ 177,235 Marketing expenses 59,410 77,339 Sales rebates 222,064 296,560 Professional fees 3,880 7,482 VAT and other tax payable 49,971 57,339 Amounts due to users (3) 45,745 51,412 Unpaid consideration for acquisition 10,280 6,205 Unpaid consideration for investment 19,257 434 Prepayment received for sale of an investee — 12,410 Interest payable for convertible debt and unsecured senior notes 923 17,063 Others 19,200 29,040 $ 556,753 $ 732,519 (1) For the year ended December 31, 2020 and nine months ended September 30, 2021, the Group recognized $1.5 million and nil of impairment charges on investment prepayment (all fully impaired), respectively, due to the deterioration of investees’ operations resulting in their inability to refund the prepayments. (2) Loans to related parties and third parties incurred for the nine months ended September 30, 2021 were non-trade in nature. (3) Weibo wallet enables users to conduct interest-generation activities on Weibo, such as handing out “red envelopes” 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 receivable 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 unaudited interim condensed consolidated balance sheets. (4) As of September 30, 2021, investment related deposits primarily included $76.8 million in a micro loan company, $79.1 million in an insurance company and $223.9 million in a game company. These non-current assets will be transferred to long-term investment when the legal procedures are completed. (5) Weibo entered into a letter of intent to purchase the office building (SINA Plaza) from SINA. As of September 30, 2021, the balance of prepayment for SINA Plaza was $131.9 million. (6) Include amounts due to third parties, employees, related parties (Note 10) and Weibo wallet users. |
Income Taxes
Income Taxes | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
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 before income taxes is as follows: Six Months Ended June 30, 2020 2021 (Unaudited) (In thousands, except percentage) Income before income tax expenses $ 306,631 $ 191,805 Less: Income (Loss) from non-China operations 79,717 (163,411) Income from China operations $ 226,914 $ 355,216 Income tax expense (benefits) applicable to non-China operations $ 13,296 $ (4,275) Income tax expense applicable to China operations 43,331 66,130 Total income tax expenses $ 56,627 $ 61,855 Effective tax rate for China operations 19.1 % 18.6 % The Company generated the majority of its operating income from PRC operations and has recorded income tax provision for the periods presented. The Group’s income (loss) from non-China operations mainly included stock-based compensation, fair value changes through earnings on investments and investment related impairment recorded by the Group’s non-China subsidiaries. The Group’s non-China operations have recognized $13.3 million deferred tax charges from fair value change of investments during the six months ended June 30, 2020, as well as a $4.3 million reversal of previously recognized deferred tax charges during the six months ended June 30, 2021. 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 16.5% Hong Kong profit tax on its taxable income generated from operations in Hong Kong. Commencing from the year of assessment 2018/2019, the first HK$2 million of profits earned by entities incorporated in Hong Kong will be taxed at half the current tax rate (i.e., 8.25%) while the remaining profits will continue to be taxed at the existing 16.5% tax rate. 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. Preferential tax treatments will be granted to companies conducting businesses in certain encouraged sectors and to entities qualified as “software enterprise”, “key software enterprise” (“KSE”) and/or “high and new technology enterprise” (“HNTE”). Weibo Technology, the Group’s WFOE, was qualified as a “software enterprise” in 2020, it will not enjoy a reduced tax rate for its “software enterprise” status as it has been five years since its first profitable year of 2015 and it has already benefited from the preferential tax treatment of "software enterprise" status from 2015 to 2019. Weibo Technology was also granted the HNTE status for the fiscal years from 2017 to 2022, which entitled the qualified entity a preferential tax rate of 15% in 2020 and 2021. Its qualification as a HNTE is subject to annual evaluation and a three-year review by the relevant authorities in China. In addition, certain of the Group’s other PRC entities are also qualified as a “software enterprise”, and/or HNTE, and currently enjoy the respective preferential tax treatments. 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 are 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%. 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 June 30, 2021, the Group did not record any withholding tax for its PRC subsidiaries. According to the relevant laws and regulations in the PRC, enterprises engaging in research and development activities were entitled to claim 150% of their research and development expenses incurred as tax deductible expenses when determining their assessable profits for that year (the “R&D Deduction”). The State Taxation Administration of the PRC announced in September 2018 that enterprises engaging in research and development activities would be entitled to claim 175% of their research and development expenses as R&D Deduction from January 1, 2018 to December 31, 2020. Composition of income tax expenses The following table sets forth current and deferred portion of income tax expenses of the Group: Six Months Ended June 30, 2020 2021 (Unaudited) (In thousands) Deferred tax provisions (benefits) $ 12,745 $ (5,061) Current income tax expenses 43,882 66,916 Income tax expenses $ 56,627 $ 61,855 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, 2020 June 30, 2021 (In thousands) Deferred tax assets: Net operating loss carry forwards $ 8,872 $ 8,976 Valuation allowance (8,872) (8,976) Depreciation, investment-related impairment, accounts receivable, accrued and other liabilities 107,892 109,154 Valuation allowance (80,872) (81,875) Net deferred tax assets (included in other non-current assets) $ 27,020 $ 27,279 Deferred tax liabilities: Acquired intangible assets $ 30,999 $ 32,652 Depreciation 1,435 1,452 Investment gain 25,496 21,571 Others 369 373 Total deferred tax liabilities $ 58,299 $ 56,048 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, 2020 and June 30, 2021 was $89.7 million and $90.9 million, respectively. The valuation allowance primarily consists of bad debt expenses and investment impairment charges/fair value change of investments. Historically, deferred tax assets were valued using the statutory rate of 25% for China operations. Net operating loss carry forwards for China operations as of December 31, 2020 will expire, if unused, in the years ending December 31, 2021 through December 31, 2025. Uncertain tax position Except for the lag recognition of preferential tax treatment of KSE status, research and development super deduction and stock based related deduction, the Group did not record any liability or decrease in deferred tax asset related to uncertain tax positions as of December 31, 2020 and June 30, 2021, and thus, no interest and penalties related to uncertain tax positions were recorded. For the six months ended June 30, 2021, based on interactions with the tax authorities, the Group received additional guidance regarding certain areas with heightened requirements, and updated its estimate of related tax benefit amount that is expected to be sustained upon settlement with tax authorities. Additional $27.9 million tax liability related to uncertain tax positions was recognized for the six months ended June 30, 2021, which is based on the updated estimate of the largest amount of tax benefit that is greater than 50% likely to be realized upon settlement with the tax authorities. It is possible that the estimate and ultimate resolution of these uncertain tax positions may further change based on further interactions with the tax authorities. In general, the PRC tax authorities have up to five years to review a company’s tax filings. Accordingly, tax filings of the Company’s PRC subsidiaries and VIEs for tax years 2016 through 2020 remain subject to the review by the relevant PRC tax authorities. | 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 before income taxes is as follows: Nine Months Ended September 30, 2020 2021 (In thousands, except percentage) Income before income tax expenses $ 370,109 $ 405,011 Less: Income (Loss) from non-China operations 64,479 (198,398) Income from China operations $ 305,630 $ 603,409 Income tax expense (benefits) applicable to non-China operations $ 12,358 $ (9,757) Income tax expense applicable to China operations 74,272 103,017 Total income tax expenses $ 86,630 $ 93,260 Effective tax rate for China operations 24.3 % 17.1 % The Company generated the majority of its operating income from PRC operations and has recorded income tax provision for the periods presented. The Group’s income (loss) from non-China operations mainly included stock-based compensation, fair value changes through earnings on investments and investment related impairment recorded by the Group’s non-China subsidiaries. The Group’s non-China operations have recognized $12.4 million deferred tax charges from fair value change of investments during the nine months ended September 30, 2020, as well as a $9.8 million reversal of previously recognized deferred tax charges during the nine months ended September 30, 2021. 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 16.5% Hong Kong profit tax on its taxable income generated from operations in Hong Kong. Commencing from the year of assessment 2018/2019, the first HK$2 million of profits earned by entities incorporated in Hong Kong will be taxed at half the current tax rate (i.e., 8.25%) while the remaining profits will continue to be taxed at the existing 16.5% tax rate. 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. Preferential tax treatments will be granted to companies conducting businesses in certain encouraged sectors and to entities qualified as “software enterprise”, “key software enterprise” (“KSE”) and/or “high and new technology enterprise” (“HNTE”). Weibo Technology, the Group’s WFOE, was qualified as a “software enterprise” in 2020, it will not enjoy a reduced tax rate for its “software enterprise” status as it has been five years since its first profitable year of 2015 and it has already benefited from the preferential tax treatment of “software enterprise” status from 2015 to 2019. Weibo Technology was also granted the HNTE status for the fiscal years from 2017 to 2022, which entitled the qualified entity a preferential tax rate of 15% in 2020 and 2021. Its qualification as a HNTE is subject to annual evaluation and a three-year review by the relevant authorities in China. In addition, certain of the Group’s other PRC entities are also qualified as a “software enterprise”, and/or HNTE, and currently enjoy the respective preferential tax treatments. 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 are 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%. 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 September 30, 2021, the Group did not record any withholding tax for its PRC subsidiaries. According to the relevant laws and regulations in the PRC, enterprises engaging in research and development activities were entitled to claim 150% of their research and development expenses incurred as tax deductible expenses when determining their assessable profits for that year (the “R&D Deduction”). The State Taxation Administration of the PRC announced in September 2018 that enterprises engaging in research and development activities would be entitled to claim 175% of their research and development expenses as R&D Deduction from January 1, 2018 to December 31, 2020. Composition of income tax expenses The following table sets forth current and deferred portion of income tax expenses of the Group: Nine Months Ended September 30, 2020 2021 (In thousands) Deferred tax provisions (benefits) $ 11,682 $ (11,546) Current income tax expenses 74,948 104,806 Income tax expenses $ 86,630 $ 93,260 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, 2020 September 30, 2021 (In thousands) Deferred tax assets: Net operating loss carry forwards $ 8,872 $ 8,991 Valuation allowance (8,872) (8,991) Depreciation, investment-related impairment, accounts receivable, accrued and other liabilities 107,892 109,338 Valuation allowance (80,872) (82,013) Net deferred tax assets (included in other non-current assets) $ 27,020 $ 27,325 Deferred tax liabilities: Acquired intangible assets $ 30,999 $ 36,768 Depreciation 1,435 1,454 Investment gain 25,496 15,857 Others 369 374 Total deferred tax liabilities $ 58,299 $ 54,453 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, 2020 and September 30, 2021 was $89.7 million and $91.0 million, respectively. The valuation allowance primarily consists of bad debt expenses and investment impairment charges/fair value change of investments. Historically, deferred tax assets were valued using the statutory rate of 25% for China operations. Net operating loss carry forwards for China operations as of December 31, 2020 will expire, if unused, in the years ending December 31, 2021 through December 31, 2025. Uncertain tax position Except for the lag recognition of preferential tax treatment of KSE status, research and development super deduction and stock based related deduction, the Group did not record any liability or decrease in deferred tax asset related to uncertain tax positions as of December 31, 2020 and September 30, 2021, and thus, no interest and penalties related to uncertain tax positions were recorded. For the nine months ended September 30, 2021, based on interactions with the tax authorities, the Group received additional guidance regarding certain areas with heightened requirements, and updated its estimate of related tax benefit amount that is expected to be sustained upon settlement with tax authorities. Additional $27.9 million tax liability related to uncertain tax positions was recognized for the nine months ended September 30, 2021, which is based on the updated estimate of the largest amount of tax benefit that is greater than 50% likely to be realized upon settlement with the tax authorities. It is possible that the estimate and ultimate resolution of these uncertain tax positions may further change based on further interactions with the tax authorities. In general, the PRC tax authorities have up to five years to review a company’s tax filings. Accordingly, tax filings of the Company’s PRC subsidiaries and VIEs for tax years 2016 through 2020 remain subject to the review by the relevant PRC tax authorities. |
Related Party Transactions
Related Party Transactions | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
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. During the six months ended June 30, 2020 and 2021, the Group entered in to a series of one-year loan agreements with SINA pursuant to which SINA is entitled to borrow from the Group to facilitate SINA’s business operations. SINA has withdrawn a total of $188.2 million and $310.9 million from the Group and repaid $146.7 million and $388.4 million to the Group during the six months ended June 30, 2020 and 2021, respectively. As of December 31, 2020 and June 30, 2021, the loans to and interest receivable from SINA were $547.9 million and $480.7 million, respectively. The following sets forth significant related party transactions with the Group: Six Months Ended June 30, 2020 2021 (Unaudited) (In thousands) Transactions with SINA Revenue billed through SINA $ 23,712 $ 24,586 Revenue from services provided to SINA 11,534 11,707 Total $ 35,246 $ 36,293 Costs and expenses allocated from SINA (1) $ 23,129 $ 18,603 Interest income on loans to SINA $ 4,936 $ 9,995 Transactions with Alibaba Advertising and marketing revenues from Alibaba – as an advertiser $ 63,313 $ 73,266 Advertising and marketing revenues from Alibaba – as an agent $ 9,229 $ 36,652 Services provided by Alibaba $ 26,400 $ 21,504 (1) Costs and expenses allocated from SINA represented the charges for certain services provided by SINA’s affiliates and charged to the Group using actual cost allocation based on proportional utilization (Note 1). In addition to the allocated costs and expenses, SINA also billed $20.1 million and $21.9 million for other costs and expenses incurred by Weibo but paid by SINA for the six months ended June 30, 2020 and 2021, respectively. During the six months ended June 30, 2020 and 2021, Weibo allocated $3.0 million and $1.5 million to SINA for costs and expenses related to certain of SINA’s activities for which Weibo made the payments, respectively. The following table sets forth the details of the revenues from SINA by advertising and marketing revenues and value-added services revenues for the periods specified. Six Months Ended June 30, 2020 2021 (Unaudited) (In thousands) Transactions with SINA Advertising and marketing revenues $ 27,624 $ 30,931 Value-added services revenues 7,622 5,362 Total $ 35,246 $ 36,293 The following sets forth related party outstanding balance: As of December 31, June 30, 2020 2021 (In thousands) Amount due from SINA (2) $ 548,900 $ 498,618 Accounts receivable due from Alibaba $ 135,321 $ 122,991 Loans to and interest receivable (3)(4) - Company A (an investee in e-commerce business) $ 79,762 $ 18,546 - Company B (an investee providing social and new media marketing services) 21,771 15,056 - Company C (an investee providing online brokerage services) 41,205 270,898 - Others 15,884 32,058 Total $ 158,622 $ 336,558 (2) 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 incurred by Weibo business but paid by SINA, transactions with third-party customers and suppliers settled through SINA, as well as business transactions between Weibo and SINA. These balances are trade in nature. As of December 31, 2020, and June 30, 2021, the amount due from SINA also included loans to and interest receivable from SINA of $547.9 million and $480.7 million at an annual interest rate ranging from 1.0% to 4.5% of maturity within one year, respectively, which are non-trade in nature. (3) The annual interest rates of the loans were ranging from 3.5% to 10% (interest free for Company B) and the maturities of all loans were within one year at both dates. These balances are non-trade in nature. (4) The Group assessed the collectability of outstanding loans at least on annual basis or whenever impairment indicators noted. For the year ended December 31, 2020, the Group recognized $82.2 million impairment charges on loans to and interest receivable from other related parties due to their unsatisfied financial performance and decline in forecasted revenues. For the six months ended June 30, 2021, the Group didn’t recognize any impairment charges on Loans to and interest receivable from other related parties. Other related parties mainly include investee companies on which SINA or Weibo has significant influence. These investees are generally high-tech companies operating in different internet-related business. For the six months ended June 30, 2020 and 2021, advertising and marketing revenues generated from other related parties were $18.0 million and $22.7 million, value-added services revenues generated from other related parties were $0.9 million and $0.9 million, and cost and expenses were $16.7 million and $20.2 million respectively. As of December 31, 2020 and June 30, 2021, other related parties accounted for outstanding balances of net accounts receivable of $42.5 million and $41.0 million, accounts payable of $30.8 million and $28.7 million, and accrued and other liabilities of $4.8 million and $5.4 million, respectively. | 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. During the nine months ended September 30, 2020 and 2021, the Group entered in to a series of one-year loan agreements with SINA pursuant to which SINA is entitled to borrow from the Group to facilitate SINA’s business operations. SINA has withdrawn a total of $443.6 million and $481.2 million from the Group and repaid $146.7 million and $547.7 million to the Group during the nine months ended September 30, 2020 and 2021, respectively. As of December 31, 2020 and September 30, 2021, the loans to and interest receivable from SINA were $547.9 million and $487.9 million, respectively. The following sets forth significant related party transactions with the Group: Nine Months Ended September 30, 2020 2021 (In thousands) Transactions with SINA Revenue billed through SINA $ 29,233 $ 46,374 Revenue from services provided to SINA 15,541 21,199 Total $ 44,774 $ 67,573 Costs and expenses allocated from SINA (1) $ 29,126 $ 28,796 Interest income on loans to SINA $ 8,647 $ 13,985 Transactions with Alibaba Advertising and marketing revenues from Alibaba – as an advertiser $ 92,468 $ 94,068 Advertising and marketing revenues from Alibaba – as an agent $ 20,438 $ 40,824 Services provided by Alibaba $ 39,634 $ 33,462 (1) Costs and expenses allocated from SINA represented the charges for certain services provided by SINA’s affiliates and charged to the Group using actual cost allocation based on proportional utilization (Note 1). In addition to the allocated costs and expenses, SINA also billed $32.9 million and $35.5 million for other costs and expenses incurred by Weibo but paid by SINA for the nine months ended September 30, 2020 and 2021, respectively. During the nine months ended September 30, 2020 and 2021, Weibo allocated $5.7 million and $2.2 million to SINA for costs and expenses related to certain of SINA’s activities for which Weibo made the payments, respectively. The following table sets forth the details of the revenues from SINA by advertising and marketing revenues and value-added services revenues for the periods specified. Nine Months Ended September 30, 2020 2021 (In thousands) Transactions with SINA Advertising and marketing revenues $ 34,149 $ 58,178 Value-added services revenues 10,625 9,395 Total $ 44,774 $ 67,573 The following sets forth related party outstanding balance: As of December 31, September 30, 2020 2021 (In thousands) Amount due from SINA (2) $ 548,900 $ 515,534 Accounts receivable due from Alibaba $ 135,321 $ 98,262 Loans to and interest receivable (3)(4) - Company A (an investee in e-commerce business) $ 79,762 $ — - Company B (an investee providing social and new media marketing services) 21,771 15,082 - Company C (an investee providing online brokerage services) 41,205 231,304 - Others 15,884 37,518 Total $ 158,622 $ 283,904 (2) 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 incurred by Weibo business but paid by SINA, transactions with third-party customers and suppliers settled through SINA, as well as business transactions between Weibo and SINA. As of December 31, 2020 and September 30, 2021, the amount due from SINA also included loans to and interest receivable from SINA of $547.9 million and $487.9 million at an annual interest rate ranging from 1.0% to 4.5% of maturity within one year, respectively. (3) The annual interest rates of the loans were ranging from 3.5% to 10.0% (interest free for Company B) and the maturities of all loans were within one year at both dates. (4) The Group assessed the collectability of outstanding loans at least on annual basis or whenever impairment indicators noted. For the nine months ended September 30, 2020 and 2021, the Group recognized $50.2 million and nil impairment charges on loans to and interest receivable from other related parties, respectively. Other related parties mainly include investee companies on which SINA or Weibo has significant influence. These investees are generally high-tech companies operating in different internet-related business. For the nine months ended September 30, 2020 and 2021, advertising and marketing revenues generated from other related parties were $33.4 million and $38.7 million, value-added services revenues generated from other related parties were $1.8 million and $1.7 million, and cost and expenses were $30.1 million and $29.1 million respectively. As of December 31, 2020 and September 30, 2021, other related parties accounted for outstanding balances of net accounts receivable of $42.5 million and $41.2 million, accounts payable of $30.8 million and $19.7 million, and accrued and other liabilities of $4.8million and $6.3 million, respectively. |
Employee Benefit Plans
Employee Benefit Plans | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Employee Benefit Plans | ||
Employee Benefit Plans | 11. Employee Benefit Plans China Contribution Plan The Company’s subsidiaries, VIEs and VIEs’ 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 six months ended June 30, 2020 and 2021, the Group’s total contribution was $21.4 million and $37.8 million respectively. | 11. Employee Benefit Plans China Contribution Plan The Company’s subsidiaries, VIEs and VIEs’ 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 nine months ended September 30, 2020 and 2021, the Group’s total contribution was $34.3 million and $58.4 million, respectively. |
Net Income per Share
Net Income per Share | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Net Income per Share | ||
Net Income per Share | 12. Net Income per Share Basic net income per share is computed using the weighted average number of the ordinary shares outstanding during the period. Options and RSUs 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 six months ended June 30, 2020 and 2021, options to purchase ordinary shares and RSUs of 0.6 million and 1.5 million were recognized as dilutive factors and included in the calculation of diluted net income per share, respectively. For the six months ended June 30, 2020 and 2021, options and RSUs which were anti-dilutive and excluded from the calculation of diluted net income per share were 1.0 million and 0.1 million, respectively. For the six months ended June 30, 2020 and 2021, 6.8 million shares convertible from the convertible debt were anti-dilutive and excluded from the calculation of diluted net income per share for both of the periods. The following table sets forth the computation of basic and diluted net income per share for the periods presented: Six Months Ended June 30, 2020 2021 (Unaudited) (In thousands, except per share data) Basic net income per share calculation: Numerator: Net income attributable to Weibo's shareholders $ 250,524 $ 130,848 Denominator: Weighted average ordinary shares outstanding 226,535 227,936 Basic net income per share attributable to Weibo's shareholders $ 1.11 $ 0.57 Diluted net income per share calculation: Numerator: Net income attributable to Weibo's shareholders for calculating diluted net income per share $ 250,524 $ 130,848 Denominator: Weighted average ordinary shares outstanding 226,535 227,936 Effects of dilutive securities Stock options 76 82 Unvested restricted share units 518 1,411 Shares used in computing diluted net income per share attributable to Weibo's shareholders 227,129 229,429 Diluted net income per share attributable to Weibo's shareholders $ 1.10 $ 0.57 | 12. Net Income per Share Basic net income per share is computed using the weighted average number of the ordinary shares outstanding during the period. Options and RSUs 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 nine months ended September 30, 2020 and 2021, options to purchase ordinary shares and RSUs of 0.6 million and 1.6 million were recognized as dilutive factors and included in the calculation of diluted net income per share, respectively. For the nine months ended September 30, 2020 and 2021, options and RSUs which were anti-dilutive and excluded from the calculation of diluted net income per share were 1.0 million and 0.1 million, respectively. For the nine months ended September 30, 2020 and 2021, 6.8 million shares convertible from the convertible debt were anti-dilutive and excluded from the calculation of diluted net income per share for both of the periods. The following table sets forth the computation of basic and diluted net income per share for the periods presented: Nine Months Ended September 30, 2020 2021 (In thousands, except per share data) Basic net income per share calculation: Numerator: Net income attributable to Weibo’s shareholders $ 284,322 $ 312,586 Denominator: Weighted average ordinary shares outstanding 226,728 228,185 Basic net income per share attributable to Weibo’s shareholders $ 1.25 $ 1.37 Diluted net income per share calculation: Numerator: Net income attributable to Weibo’s shareholders for calculating diluted net income per share $ 284,322 $ 312,586 Denominator: Weighted average ordinary shares outstanding 226,728 228,185 Effects of dilutive securities Stock options 73 85 Unvested restricted share units 551 1,495 Shares used in computing diluted net income per share attributable to Weibo’s shareholders 227,352 229,765 Diluted net income per share attributable to Weibo’s shareholders $ 1.25 $ 1.36 |
Segment Information
Segment Information | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
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 value-added 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 and expenses 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 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 Value-added services Total (In thousands) Six months ended June 30, 2020 (Unaudited) $ 616,006 $ 94,776 $ 710,782 Six months ended June 30, 2021 $ 892,349 $ 141,013 $ 1,033,362 | 13. Segment Information The Group currently operates and manages its business in two principal business segments globally—advertising and marketing services and value-added 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 and expenses 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 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 Value-added services Total (In thousands) Nine months ended September 30, 2020 $ 1,032,678 $ 143,843 $ 1,176,521 Nine months ended September 30, 2021 $ 1,429,969 $ 210,827 $ 1,640,796 |
Profit Appropriation and Restri
Profit Appropriation and Restricted Net Assets | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Profit Appropriation and Restricted Net Assets | ||
Profit Appropriation and Restricted Net Assets | 14. Profit Appropriation and Restricted Net Assets The Company’s subsidiaries, VIEs and VIEs’ subsidiaries in China are required to make appropriations to certain non-distributable reserve funds. In accordance with the laws applicable to WFOEs in China, 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 VIEs, 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 companies. 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, 2020 and June 30, 2021 the Group’s PRC subsidiaries accrued approximately $127.2 million and $127.0 million in the general reserve/statutory surplus funds, respectively. Under the PRC laws and regulations, the subsidiaries, VIEs and VIEs’ 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, VIEs and VIEs’ subsidiaries for working capital and other funding purposes, the Group may in the future require additional cash resources from the PRC subsidiaries, VIEs and VIEs’ 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 $450.3 million, or 14.5% of the Group’s total consolidated net assets as of June 30, 2021. | 14. Profit Appropriation and Restricted Net Assets The Company’s subsidiaries, VIEs and VIEs’ subsidiaries in China are required to make appropriations to certain non-distributable reserve funds. In accordance with the laws applicable to WFOEs in China, 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 VIEs, 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 companies. 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, 2020 and September 30, 2021 the Group’s PRC subsidiaries accrued approximately $127.2 million and $127.0 million in the general reserve/statutory surplus funds, respectively. Under the PRC laws and regulations, the subsidiaries, VIEs and VIEs’ 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, VIEs and VIEs’ subsidiaries for working capital and other funding purposes, the Group may in the future require additional cash resources from the PRC subsidiaries, VIEs and VIEs’ 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 $449.9 million, or 13.5% of the Group’s total consolidated net assets as of September 30, 2021. |
Fair Value Measurement
Fair Value Measurement | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Fair Value Measurement | ||
Fair Value Measurement | 15. Fair Value Measurement The following table summarizes, for assets measured at fair value on a recurring basis, the respective fair value and the classification by level of input within the fair value hierarchy as of December 31, 2020 and June 30, 2021: Fair Value Measurements Quoted Prices in Active Market Significant Other Significant for Identical Assets Observable Inputs Unobservable Inputs Total (Level 1) (Level 2) (Level 3) (In thousands) As of December 31, 2020: Bank time deposits * $ 1,515,880 $ — $ 1,515,880 $ — Wealth management products * 166,168 — 166,168 — Equity securities with readily determinable market value ** 289,221 289,221 — — Total $ 1,971,269 $ 289,221 $ 1,682,048 $ — As of June 30, 2021: Bank time deposits * $ 750,467 $ — $ 750,467 $ — Wealth management products * 180,355 — 180,355 — Equity securities with readily determinable market value ** 241,590 241,590 — — Total $ 1,172,412 $ 241,590 $ 930,822 $ — * Included in 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 short-term investments and equity securities with readily determinable fair values on a recurring basis. The fair value of the Group’s equity securities with readily determinable fair values are determined based on the quoted market price (Level 1). The fair value of the Group’s short-term investments are determined based on the quoted market price for similar products (Level 2). Non-recurring For those equity investments without readily determinable fair value, the Group measures them at market value when observable price changes are identified or impairment charges are recognized. The market values of the Group’s privately held investments as disclosed are determined based on the discounted cash flow model using the discount curve of market interest rates or based on the similar transaction price in the market directly. The Group classifies the valuation techniques on those investments that use similar identifiable transaction prices as Level 2 of fair value measurements. The Group measures equity method investments at fair value on a non-recurring basis only if an impairment charge is recognized. The Group measures equity method investments at fair value on a non-recurring basis only if an impairment charge is recognized. Certain privately held investments were measured using significant unobservable inputs (Level 3) and written down from their respective carrying values to fair values, considering the investees’ financial performance, assumptions about future growth, and future financing plan, with impairment charges incurred and recorded in earnings for the period then ended. For the six months ended June 30, 2020 and 2021, $2.5 million and $66.6 million impairment charges were recorded for those equity investments without readily determinable fair values. The Group’s non-financial assets, such as intangible assets, goodwill, fixed assets and operating lease assets, are measured at fair value only if they were determined to be impaired. In accordance with the Group’s 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 recognized no impairment charge of goodwill arising from previous acquisitions for the six months ended June 30, 2020 and 2021, respectively. 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 SINA, accounts payable, accrued and other liabilities approximates fair value because of their short-term nature. | 15. Fair Value Measurement The following table summarizes, for assets measured at fair value on a recurring basis, the respective fair value and the classification by level of input within the fair value hierarchy as of December 31, 2020 and September 30, 2021: Fair Value Measurements Quoted Prices in Active Market Significant Other Significant for Identical Assets Observable Inputs Unobservable Inputs Total (Level 1) (Level 2) (Level 3) (In thousands) As of December 31, 2020: Bank time deposits* $ 1,515,880 $ — $ 1,515,880 $ — Wealth management products* 166,168 — 166,168 — Equity securities with readily determinable market value ** 289,221 289,221 — — Total $ 1,971,269 $ 289,221 $ 1,682,048 $ — As of September 30, 2021: Bank time deposits* $ 665,983 $ — $ 665,983 $ — Wealth management products* 212,504 — 212,504 — Equity securities with readily determinable market value ** 420,012 420,012 — — Total $ 1,298,499 $ 420,012 $ 878,487 $ — * Included in short-term investments on the Group’s unaudited interim condensed consolidated balance sheets. ** Included in long-term investments on the Group’s unaudited interim condensed consolidated balance sheets. Recurring The Group measures short-term investments and equity securities with readily determinable fair values on a recurring basis. The fair value of the Group’s equity securities with readily determinable fair values are determined based on the quoted market price (Level 1). The fair value of the Group’s short-term investments are determined based on the quoted market price for similar products (Level 2). Non-recurring For those equity investments without readily determinable fair value, the Group measures them at market value when observable price changes are identified or impairment charges are recognized. The market values of the Group’s privately held investments as disclosed are determined based on the discounted cash flow model using the discount curve of market interest rates or based on the similar transaction price in the market directly. The Group classifies the valuation techniques on those investments that use similar identifiable transaction prices as Level 2 of fair value measurements. The Group measures equity method investments at fair value on a non-recurring basis only if an impairment charge is recognized. The Group measures equity method investments at fair value on a non-recurring basis only if an impairment charge is recognized. Certain privately held investments were measured using significant unobservable inputs (Level 3) and written down from their respective carrying values to fair values, considering the investees’ financial performance, assumptions about future growth, and future financing plan, with impairment charges incurred and recorded in earnings for the period then ended. For the nine months ended September 30, 2020 and 2021, $64.7 million and $102.6 million impairment charges were recorded for those equity investments without readily determinable fair values. The Group’s non-financial assets, such as intangible assets, goodwill, fixed assets and operating lease assets, are measured at fair value only if they were determined to be impaired. In accordance with the Group’s 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 recognized no impairment charge of goodwill arising from previous acquisitions for the nine months ended September 30, 2020 and 2021, respectively. 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 SINA, accounts payable, accrued and other liabilities approximates fair value because of their short-term nature. |
Convertible Debt and Unsecured
Convertible Debt and Unsecured Senior Notes | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Convertible Debt and Unsecured Senior Notes | ||
Convertible Debt and Unsecured Senior Notes | 16. Convertible Debt and Unsecured Senior Notes In October 2017, the Company issued $900 million in aggregate principal amount of 1.25% coupon interest convertible senior notes due on November 15, 2022 (“2022 Notes”) at par. The Notes may be converted into Weibo’s American depositary shares (“ADSs”), each representing one Class A ordinary share of the Company, at the option of the holders, which is equivalent to an initial conversion price of approximately $133.27 per ADS, subject to adjustment. The conversion rate may be adjusted under certain circumstances, such as distribution of dividends and stock splits. In addition, upon a make-whole fundamental change prior to the maturity date of the notes, the Company will, under certain circumstances, increase the applicable conversion rate for a holder that elects to convert his/her notes in connection with such make-whole fundamental change. The net proceeds received by the Company from the issuance of the 2022 Notes were $879.3 million, net of issuance cost of $20.7 million. The Company will pay cash interest at an annual rate of 1.25%, payable semiannually in arrears on May 15 and November 15 of each year, beginning May 15, 2018. The issuance costs of the 2022 Notes are being amortized to interest expenses over the contractual life. The 2022 Notes related interest expenses were $7.7 million for both of the six months ended June 30, 2020 and 2021. In July 2019, the Company issued $800 million in aggregate principal amount of unsecured senior notes due on July 5, 2024 (“2024 Notes”), unless previously repurchased or redeemed in accordance with the terms prior to maturity. The 2024 Notes were issued at par value and bear an annual interest rate of 3.50%, payable semiannually in arrears on January 5 and July 5 of each year, beginning on January 5, 2020. The net proceeds to the Company from the issuance of the 2024 Notes were $793.3 million, net of issuance cost of $6.7 million. The issuance costs of the 2024 Notes are being amortized to interest expenses over the contractual life. The 2024 Notes related interest expenses were $14.7 million for both of the six months ended June 30, 2020 and 2021. In July 2020, the Company issued $750 million in aggregate principal amount of unsecured senior notes due on July 8, 2030 (“2030 Notes”), unless previously repurchased or redeemed in accordance with the terms prior to maturity. The 2030 Notes bear an annual interest rate of 3.375%, payable semiannually in arrears on January 8 and July 8 of each year, beginning on January 8, 2021. The net proceeds to the Company from the issuance of the 2030 Notes were $740.3 million, net of issuance cost of $9.7 million. The issuance costs of the 2030 Notes are being amortized to interest expenses over the contractual life. For the six months ended June 30, 2021, the Group recognized $13.1 million interest expenses from the 2030 Notes. | 16. Convertible Debt and Unsecured Senior Notes In October 2017, the Company issued $900 million in aggregate principal amount of 1.25% coupon interest convertible senior notes due on November 15, 2022 (“2022 Notes”) at par. The Notes may be converted into Weibo’s American depositary shares (“ADSs”), each representing one Class A ordinary share of the Company, at the option of the holders, which is equivalent to an initial conversion price of approximately $133.27 per ADS, subject to adjustment. The conversion rate may be adjusted under certain circumstances, such as distribution of dividends and stock splits. In addition, upon a make-whole fundamental change prior to the maturity date of the notes, the Company will, under certain circumstances, increase the applicable conversion rate for a holder that elects to convert his/her notes in connection with such make-whole fundamental change. The net proceeds received by the Company from the issuance of the 2022 Notes were $879.3 million, net of issuance cost of $20.7 million. The Company pays cash interest at an annual rate of 1.25%, payable semiannually in arrears on May 15 and November 15 of each year, beginning May 15, 2018. The issuance costs of the 2022 Notes are being amortized to interest expenses over the contractual life. The 2022 Notes related interest expenses were $11.5 million for both of the nine months ended September 30, 2020 and 2021. In July 2019, the Company issued $800 million in aggregate principal amount of unsecured senior notes due on July 5, 2024 (“2024 Notes”), unless previously repurchased or redeemed in accordance with the terms prior to maturity. The 2024 Notes were issued at par value and bear an annual interest rate of 3.50%, payable semiannually in arrears on January 5 and July 5 of each year, beginning on January 5, 2020. The net proceeds to the Company from the issuance of the 2024 Notes were $793.3 million, net of issuance cost of $6.7 million. The issuance costs of the 2024 Notes are being amortized to interest expenses over the contractual life. The 2024 Notes related interest expenses were $22.0 million for both of the nine months ended September 30, 2020 and 2021. In July 2020, the Company issued $750 million in aggregate principal amount of unsecured senior notes due on July 8, 2030 (“2030 Notes”), unless previously repurchased or redeemed in accordance with the terms prior to maturity. The 2030 Notes bear an annual interest rate of 3.375%, payable semiannually in arrears on January 8 and July 8 of each year, beginning on January 8, 2021. The net proceeds to the Company from the issuance of the 2030 Notes were $740.3 million, net of issuance cost of $9.7 million. The issuance costs of the 2030 Notes are being amortized to interest expenses over the contractual life. For the nine months ended September 30, 2020 and 2021, the Group recognized $6.1 million and $19.7 million interest expenses from the 2030 Notes. |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Commitments and Contingencies | ||
Commitments and Contingencies | 17. 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. For the six months ended June 30, 2020 and 2021, the Group recorded $6.0 million and $7.9 million lease expense, respectively. Based on the current rental lease agreements, future minimum lease payments commitments as of June 30, 2021 were as follows: Less than One One to Three to More than Operating lease commitments Total Year Three Years Five Years Five Years (In thousands) As of June 30, 2021 $ 12,800 $ 6,020 $ 3,632 $ 2,855 $ 293 Purchase commitments mainly include minimum commitments for marketing activities and internet connection. Purchase commitments as of June 30, 2021 were as follows: Less than One One to Three to More than Purchase commitments Total Year Three Years Five Years Five Years (In thousands) As of June 30, 2021 $ 591,545 $ 561,167 $ 28,263 $ 2,093 $ 22 2022 Notes represent the future maximum commitments relating to the principal amount and interests in connection with the issuance of $900 million in aggregate principal amount of 1.25% coupon interest convertible senior notes, which will mature on November 15, 2022. 2024 Notes represent future maximum commitment relating to the principal amount and interests in connection with the issuance of $800 million in aggregate principal amount of unsecured senior notes bearing an annual interest rate of 3.50%, which will mature on July 5, 2024. 2030 Notes represent future maximum commitment relating to the principal amount and interests in connection with the issuance of $750 million in aggregate principal amount of unsecured senior notes bearing an annual interest rate of 3.375%, which will mature on July 8, 2030. Less than One One to Three to More than Other commitments Total Year Three Years Five Years Five Years (In thousands) 2022 Notes $ 916,867 $ 11,250 $ 905,617 $ — $ — 2024 Notes 898,000 28,000 56,000 814,000 — 2030 Notes 990,469 25,313 50,625 50,625 863,906 Total $ 2,805,336 $ 64,563 $ 1,012,242 $ 864,625 $ 863,906 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 the Company, 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 statements. | 17. 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. For the nine months ended September 30, 2020 and 2021, the Group recorded $9.2 million and $12.2 million lease expense, respectively. Based on the current rental lease agreements, future minimum lease payments commitments as of September 30, 2021 were as follows: Less than One One to Three to More than Operating lease commitments Total Year Three Years Five Years Five Years (In thousands) As of September 30, 2021 $ 11,391 $ 5,001 $ 3,596 $ 2,661 $ 133 Purchase commitments mainly include minimum commitments for marketing activities and internet connection. Purchase commitments as of September 30, 2021 were as follows: Less than One One to Three to More than Purchase commitments Total Year Three Years Five Years Five Years (In thousands) As of September 30, 2021 $ 620,620 $ 588,994 $ 29,613 $ 2,006 $ 7 2022 Notes represent the future maximum commitments relating to the principal amount and interests in connection with the issuance of $900 million in aggregate principal amount of 1.25% coupon interest convertible senior notes, which will mature on November 15, 2022. 2024 Notes represent future maximum commitment relating to the principal amount and interests in connection with the issuance of $800 million in aggregate principal amount of unsecured senior notes bearing an annual interest rate of 3.50%, which will mature on July 5, 2024. 2030 Notes represent future maximum commitment relating to the principal amount and interests in connection with the issuance of $750 million in aggregate principal amount of unsecured senior notes bearing an annual interest rate of 3.375%, which will mature on July 8, 2030. Less than One One to Three to More than Other commitments Total Year Three Years Five Years Five Years (In thousands) 2022 Notes $ 916,867 $ 11,250 $ 905,617 $ — $ — 2024 Notes 884,000 28,000 856,000 — — 2030 Notes 977,812 25,312 50,625 50,625 851,250 Total $ 2,778,679 $ 64,562 $ 1,812,242 $ 50,625 $ 851,250 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 the Company, 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 statements. |
Redeemable Non-controlling Inte
Redeemable Non-controlling Interests | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Redeemable Non-controlling Interests | ||
Redeemable Non-controlling Interests | 18. Redeemable Non-controlling Interests In the fourth quarter of 2020, the Group entered into a series of share purchase agreements with then existing shareholders of Shanghai Jiamian Information Technology Co., Ltd. (“JM Tech”) to acquire the majority of the company’s equity interest. The Group agreed to redeem the non-controlling interests held by founders and CEO of the company under certain circumstances during the following years subsequent to the acquisition. The Group determined that the non-controlling interest with redemption rights should be classified as redeemable non-controlling interest since they are contingently redeemable upon the occurrence of certain conditional events, which are not solely within the control of the Group. The redeemable non-controlling interests is recognized at fair value on the acquisition date. The Group records accretion on the redeemable non-controlling interest to the redemption value over the period from the date of the acquisition to the date of earliest redemption. The accretion using the effective interest method, is recorded as deemed dividends to preferred shareholders, which reduce retained earnings and equity classified non-controlling interests, and earnings available to common shareholders in calculating basic and diluted earnings per share. The process of adjusting redeemable non-controlling interests to its redemption value (the “Mezzanine Adjustment”) should be performed after attribution of the subsidiary's net income or loss pursuant to ASC 810, Consolidation. The carrying amount of redeemable non-controlling interests will equal the higher of the amount resulting from application of ASC 810 or the amount resulting from the Mezzanine Adjustment. As the expected redemption value is less than the carrying value of redeemable non-controlling interests, there is nil mezzanine adjustment recognized for the six months ended June 30, 2021. Pursuant to the agreements between the Group and the founders who are also employees of JM Tech, the founders are required to be in employment during the following two years till December 31, 2022 to be entitled to their proportionate share in JM Tech’s existing and future retained earnings during the period. Such entitlement will automatically be forfeited upon the termination of their employment during the period. The Company considered this arrangement as certain economic interests associated with the founders’ non-controlling interest in JM Tech till December 31, 2022. Therefore, the Company recognized compensation costs for the founders’ share of JM Tech’s retained earnings with the credit increasing non-controlling interest and redeemable non-controlling interest. During the six months ended June 30, 2021, $13.3 million compensation costs were recognized, of which $10.9 million was recorded to increase redeemable non-controlling interest. | 18. Redeemable Non-controlling Interests In the fourth quarter of 2020, the Group entered into a series of share purchase agreements with then existing shareholders of Shanghai Jiamian Information Technology Co., Ltd. (“JM Tech”) to acquire the majority of the company’s equity interest. The Group agreed to redeem the non-controlling interests held by founders and CEO of the company under certain circumstances during the following years subsequent to the acquisition. The Group determined that the non-controlling interest with redemption rights should be classified as redeemable non-controlling interest since they are contingently redeemable upon the occurrence of certain conditional events, which are not solely within the control of the Group. The redeemable non-controlling interests is recognized at fair value on the acquisition date. The Group records accretion on the redeemable non-controlling interest to the redemption value over the period from the date of the acquisition to the date of earliest redemption. The accretion using the effective interest method, is recorded as deemed dividends to preferred shareholders, which reduce retained earnings and equity classified non-controlling interests, and earnings available to common shareholders in calculating basic and diluted earnings per share. The process of adjusting redeemable non-controlling interests to its redemption value (the “Mezzanine Adjustment”) should be performed after attribution of the subsidiary’s net income or loss pursuant to ASC 810, Consolidation. The carrying amount of redeemable non-controlling interests will equal the higher of the amount resulting from application of ASC 810 or the amount resulting from the Mezzanine Adjustment. As the expected redemption value is less than the carrying value of redeemable non-controlling interests, there is nil mezzanine adjustment recognized for the nine months ended September 30, 2021. Pursuant to the agreements between the Group and the founders who are also employees of JM Tech, the founders are required to be in employment during the following two years till December 31, 2022 to be entitled to their proportionate share in JM Tech’s existing and future retained earnings during the period. Such entitlement will automatically be forfeited upon the termination of their employment during the period. The Company considered this arrangement as certain economic interests associated with the founders’ non-controlling interest in JM Tech till December 31, 2022. Therefore, the Company recognized compensation costs for the founders’ share of JM Tech’s retained earnings with the credit increasing non-controlling interest and redeemable non-controlling interest. During the nine months ended September 30, 2021, $18.4 million compensation costs were recognized, of which $15.6 million was recorded to increase redeemable non-controlling interest. |
Subsequent events
Subsequent events | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Subsequent events | ||
Subsequent events | 19. Subsequent events From June 30, 2021 to the date of publication of this report, there was no subsequent event which had a material impact on the Group. | 19. Subsequent events From September 30, 2021 to the date of publication of this report, there was no subsequent event which had a material impact on the Group. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Significant Accounting Policies | ||
Basis of presentation | Basis of presentation The preparation of the Group’s consolidated financial statements is in conformity with U.S. GAAP. The consolidated financial statements include the accounts of Weibo, its wholly owned subsidiaries, VIEs, and VIEs’ subsidiaries. All significant intercompany balances and transactions have been eliminated. The comparative financial statements for the six months ended June 30, 2020 are unaudited. | Basis of presentation The interim unaudited condensed consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements. In the opinion of the Company, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary for a fair statement of its financial position as of September 30, 2021, its results of operations and cash flows for the nine months ended September 30, 2020 and 2021. The unaudited interim condensed consolidated balance sheet as of December 31, 2020, was derived from audited annual financial statements included in the Company’s Annual Report on Form 20-F filed on April 22, 2021, but does not contain all of the footnote disclosures from the annual financial statements. The preparation of the Group’s unaudited interim condensed consolidated financial statements is in conformity with U.S. GAAP. The unaudited interim condensed consolidated financial statements include the accounts of Weibo, its wholly owned subsidiaries, VIEs, and VIEs’ subsidiaries. All significant intercompany balances and transactions have been eliminated. |
Use of estimates | Use of estimates Conformity with U.S. 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. U.S. 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, long-term investments, goodwill and other long-lived assets, allowances for credit losses, stock-based compensation, the estimated useful lives of assets, convertible debt, business combination, and foreign currency. 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. | Use of estimates Conformity with U.S. GAAP requires the use of estimates and judgments that affect the reported amounts in the unaudited interim condensed 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. U.S. 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, long-term investments, goodwill and other long-lived assets, allowances for credit losses, stock-based compensation, the estimated useful lives of assets, convertible debt, business combination, and foreign currency. 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 Under ASC 606, revenues are recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Group expects to be entitled to in exchange for those goods or services. The Group identifies its contracts with customers and all performance obligations within those contracts. The Group then determines the transaction price and allocates the transaction price to the performance obligations within the Group’s contracts with customers, recognizing revenue when, or as, the Group satisfies its performance obligations. The Group does not believe that significant management judgments are involved in revenue recognition, but the amount and timing of the Group's revenues could be different for any period if management made different judgments. Certain customers may receive sales rebates, which are accounted for as variable consideration. The Group estimates annual expected revenue volume of each individual agent with reference to their historical results. The Group recognizes revenue for the amount of fees it receives from its advertisers, after deducting estimated sales rebates and net of value-added tax (“VAT”) under ASC 606. The Group believes that there will not be significant changes to its estimates of variable consideration. Revenue disaggregated by revenue source for the six months ended June 30, 2020 and 2021 consists of the following: Six Months Ended June 30, 2020 2021 (Unaudited) (In thousands) Advertising and marketing revenues $ 616,006 $ 892,349 Value-added services revenues 94,776 141,013 Total revenues $ 710,782 $ 1,033,362 The Group enters into contracts with its customers, which may give rise to contract assets (unbilled revenue) or contract liabilities (deferred revenue). The payment terms and conditions within the Group’s contracts vary by the type and location of its customers and products or services purchased, the substantial majority of which are due in less than one year. Deferred revenues related to unsatisfied performance obligations at the end of the period are mainly from the customer advance of the advertising and marketing services and the sales of the fee-based services, such as VIP membership,live streaming, and virtual currency or in-game virtual items sold for game related services. The deferred revenues are recognized based on customers' consumption or amortized on a straight-line basis through the service period for different products/services. Due to the generally short-term duration of the contracts, the majority of the performance obligations are satisfied in the following reporting period. The amount of revenue recognized that was included in the deferred revenue balance at the beginning of the period was $104.5 million for the six months ended June 30, 2021. Practical Expedients and Exemptions The Group generally expenses sales commissions when incurred because the amortization period is generally one year or less. These costs are recorded within sales and marketing expenses. 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 or website 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. Under the CPM model, customers are obligated to pay when the advertisement is displayed. The Group’s majority revenue transactions are based on standard business terms and conditions, which are recognized net of agency rebates. The agency rebates are accounted for as variable consideration and are estimated during interim periods based on estimated annual revenue volume of each individual agent with reference to their historical results, which involves accounting judgment. The Group believes its estimation approach in variable consideration results in revenue recognition in a manner consistent with the underlying economics of the transaction. The Group’s contracts with customers may include multiple performance obligations, which primarily consist of combinations of service to allow customers to place advertisements on different areas of its platform or website. For such arrangements, advertising arrangements involving multiple deliverables are broken down into single-element arrangements based on their stand-alone selling price for revenue recognition purposes. The estimation of stand-alone selling price involves significant judgment, especially for the deliverables that have not been sold separately. For those deliverables, the Group determines best estimate of the stand-alone selling price by taking into consideration of the pricing of advertising areas of the Group’s platform or website with similar popularities and advertisements with similar formats and quoted prices from competitors and other market conditions. The Group believes the estimation approach in stand-alone selling price and allocation of the transaction price on a relative stand-alone selling price to each performance obligation results in revenue recognition in a manner consistent with the underlying economics of the transaction and the allocation principle included in ASC 606. Revenues recognized with reference to best estimation of selling price were immaterial for all periods presented. Most of such contracts have all performance obligations completed within one year. Changes in judgments on these assumptions and estimates could materially impact the timing or amount of revenue recognition. Contracts with customers of online advertising may require cooperation from third parties. The Group pays a predetermined portion of revenues earned from advertising contracts to the third parties such as key opinion leaders who participate in advertising and promotion activities by monetizing their social assets. The Group has determined that it is the principal in these transactions, as it has primary responsibility for fulfilling all the obligations related to advertising contracts. The Group has discretion in establishing pricing of the contracts and controls the advertising inventory before the delivery to customers. The Group records revenues derived from such contracts on a gross basis and the portion paid to the third parties is recognized as cost of revenues. 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 are received in exchange for advertising services are recorded based on the fair values of the goods or services received. Value-added services revenues The Group generates value-added services revenues principally from fee-based services, mainly including VIP membership, live streaming, and game-related services. Other value-added services revenues mainly include the revenues from the provision of traffic acquisition services to various customers. Revenues from these services are recognized when control of the promised services is transferred to customers, in an amount that reflects the consideration the Group expects to be entitled to in exchange for those services. VIP membership. Live streaming. The Group designs, creates and offers various virtual items for sales to users with pre-determined selling prices. Each virtual item is considered as a distinctive performance obligation. Sales proceeds are recorded as deferred revenue and recognized as revenue based on the consumption of the virtual items. Users can purchase and present virtual items to broadcasters to show support for their favorite ones. Under the arrangements with broadcasters or broadcaster agencies, the Group shares with them a portion of the revenues derived from the consumption of virtual items. Revenues derived from the sale of virtual items are recorded on a gross basis as the Group has determined that it acts as the principal to fulfill all obligations related to the live streaming services. The portion paid to broadcasters and/or broadcaster agencies is recognized as cost of revenues. The Group does not have further obligations to the user after the virtual items are consumed. Game-related services. | Revenue recognition Under ASC 606, revenues are recognized when control of the promised goods or services is transferred to customers, in an amount that reflects the consideration the Group expects to be entitled to in exchange for those goods or services. The Group identifies its contracts with customers and all performance obligations within those contracts. The Group then determines the transaction price and allocates the transaction price to the performance obligations within the Group’s contracts with customers, recognizing revenue when, or as, the Group satisfies its performance obligations. The Group does not believe that significant management judgments are involved in revenue recognition, but the amount and timing of the Group’s revenues could be different for any period if management made different judgments. Certain customers may receive sales rebates, which are accounted for as variable consideration. The Group estimates annual expected revenue volume of each individual agent with reference to their historical results. The Group recognizes revenue for the amount of fees it receives from its advertisers, after deducting estimated sales rebates and net of value-added tax (“VAT”) under ASC 606. The Group believes that there will not be significant changes to its estimates of variable consideration. Revenue disaggregated by revenue source for the nine months ended September 30, 2020 and 2021 consists of the following: Nine Months Ended September 30, 2020 2021 (In thousands) Advertising and marketing revenues $ 1,032,678 $ 1,429,969 Value-added services revenues 143,843 210,827 Total revenues $ 1,176,521 $ 1,640,796 The Group enters into contracts with its customers, which may give rise to contract assets (unbilled revenue) or contract liabilities (deferred revenue). The payment terms and conditions within the Group’s contracts vary by the type and location of its customers and products or services purchased, the substantial majority of which are due in less than one year. Deferred revenues related to unsatisfied performance obligations at the end of the period are mainly from the customer advance of the advertising and marketing services and the sales of the fee-based services, such as VIP membership, live streaming, and virtual currency or in-game virtual items sold for game related services. The deferred revenues are recognized based on customers’ consumption or amortized on a straight-line basis through the service period for different products/services. Due to the generally short-term duration of the contracts, the majority of the performance obligations are satisfied in the following reporting period. The amount of revenue recognized that was included in the deferred revenue balance at the beginning of the period was $120.1 million for the nine months ended September 30, 2021. Practical Expedients and Exemptions The Group generally expenses sales commissions when incurred because the amortization period is generally one year or less. These costs are recorded within sales and marketing expenses. 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 or website 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. Under the CPM model, customers are obligated to pay when the advertisement is displayed. The Group’s majority revenue transactions are based on standard business terms and conditions, which are recognized net of agency rebates. The agency rebates are accounted for as variable consideration and are estimated during interim periods based on estimated annual revenue volume of each individual agent with reference to their historical results, which involves accounting judgment. The Group believes its estimation approach in variable consideration results in revenue recognition in a manner consistent with the underlying economics of the transaction. The Group’s contracts with customers may include multiple performance obligations, which primarily consist of combinations of service to allow customers to place advertisements on different areas of its platform or website. For such arrangements, advertising arrangements involving multiple deliverables are broken down into single-element arrangements based on their stand-alone selling price for revenue recognition purposes. The estimation of stand-alone selling price involves significant judgment, especially for the deliverables that have not been sold separately. For those deliverables, the Group determines best estimate of the stand-alone selling price by taking into consideration of the pricing of advertising areas of the Group’s platform or website with similar popularities and advertisements with similar formats and quoted prices from competitors and other market conditions. The Group believes the estimation approach in stand-alone selling price and allocation of the transaction price on a relative stand-alone selling price to each performance obligation results in revenue recognition in a manner consistent with the underlying economics of the transaction and the allocation principle included in ASC 606. Revenues recognized with reference to best estimation of selling price were immaterial for all periods presented. Most of such contracts have all performance obligations completed within one year. Changes in judgments on these assumptions and estimates could materially impact the timing or amount of revenue recognition. Contracts with customers of online advertising may require cooperation from third parties. The Group pays a predetermined portion of revenues earned from advertising contracts to the third parties such as key opinion leaders who participate in advertising and promotion activities by monetizing their social assets. The Group has determined that it is the principal in these transactions, as it has primary responsibility for fulfilling all the obligations related to advertising contracts. The Group has discretion in establishing pricing of the contracts and controls the advertising inventory before the delivery to customers. The Group records revenues derived from such contracts on a gross basis and the portion paid to the third parties is recognized as cost of revenues. 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 are received in exchange for advertising services are recorded based on the fair values of the goods or services received. Value-added services revenues The Group generates value-added services revenues principally from fee-based services, mainly including VIP membership, live streaming, and game-related services. Other value-added services revenues mainly include the revenues from the provision of traffic acquisition services to various customers. Revenues from these services are recognized when control of the promised services is transferred to customers, in an amount that reflects the consideration the Group expects to be entitled to in exchange for those services. VIP membership. Live streaming. The Group designs, creates and offers various virtual items for sales to users with pre-determined selling prices. Each virtual item is considered as a distinctive performance obligation. Sales proceeds are recorded as deferred revenue and recognized as revenue based on the consumption of the virtual items. Users can purchase and present virtual items to broadcasters to show support for their favorite ones. Under the arrangements with broadcasters or broadcaster agencies, the Group shares with them a portion of the revenues derived from the consumption of virtual items. Revenues derived from the sale of virtual items are recorded on a gross basis as the Group has determined that it acts as the principal to fulfill all obligations related to the live streaming services. The portion paid to broadcasters and/or broadcaster agencies is recognized as cost of revenues. The Group does not have further obligations to the user after the virtual items are consumed. Game-related services. |
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, revenue-share cost, advertisement production cost, labor cost and turnover taxes levied on the revenues, part of which were allocated from SINA. The Group is subject to 3% cultural business construction fees for its advertising and marketing revenues, which is included in cost of revenues. Starting from July 1, 2019, the 3% cultural business construction fees was reduced to 1.5%. Moreover, as part of the measures taken by the government to ease the negative impact from Covid-19 pandemic, the cultural business construction fees were exempted for the fiscal years of 2020 and 2021.An aggregate of $10.3 million and $11.5 million cultural business construction fees was exempted for the six months ended June 30, 2020 and 2021, respectively. | Cost of revenues Cost of revenues consists mainly of costs associated with the maintenance of platform, which primarily include bandwidth and other infrastructure costs, revenue-share cost, advertisement production cost, labor cost and turnover taxes levied on the revenues, part of which were allocated from SINA. The Group is subject to 3% cultural business construction fees for its advertising and marketing revenues, which is included in cost of revenues. Starting from July 1 2019, the 3% cultural business construction fees was reduced to 1.5%. Moreover, as part of the measures taken by the government to ease the negative impact from Covid-19 pandemic, the cultural business construction fees were exempted for the fiscal years of 2020 and 2021.An aggregate of $15.7 million and $18.8 million cultural business construction fees was exempted for the nine months ended September 30, 2020 and 2021, 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. Pursuant to the adoption of ASC 606, the recognition of revenues and expenses at fair value for advertising barter transactions has resulted in an increase of revenue and advertising expenses. For the six months ended June 30, 2020 and 2021, the advertising and promotional expenses were $156.9 million and $219.9 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. Pursuant to the adoption of ASC 606, the recognition of revenues and expenses at fair value for advertising barter transactions has resulted in an increase of revenue and advertising expenses. For the nine months ended September 30, 2020 and 2021, the advertising and promotional expenses were $230.3 million and $312.9 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. The Group expenses all costs incurred for the planning, 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. | 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. The Group expenses all costs incurred for the planning, 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 expense 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, if it is probable that the performance condition will be achieved 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 | 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 expense 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, if it is probable that the performance condition will be achieved 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 |
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. Uncertain tax positions. | 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. Uncertain tax positions. |
Short-term investments | Short-term investments Short-term investments represent bank time deposits and wealth management products which are certain deposits with variable interest rates or principal not-guaranteed with certain financial institutions. Their original maturities are of greater than three months but less than one year. In accordance with ASC 825, Financial Instruments | Short-term investments Short-term investments represent bank time deposits and wealth management products which are certain deposits with variable interest rates or principal not-guaranteed with certain financial institutions. Their original maturities are of greater than three months but less than one year. In accordance with ASC 825, Financial Instruments |
Credit losses | Credit losses In 2016, the FASB issued ASC Topic 326, which amends previously issued guidance regarding the impairment of financial instruments by creating an impairment model that is based on expected losses. The guidance is applicable to accounts receivable and the Group adopted ASC Topic 326 on January 1, 2020. Accounts receivable are recorded at the original amounts less an allowance for any potential uncollectible amounts. The Group makes estimates of expected credit and collectability trends for the allowance for credit losses based upon assessment of various factors, including historical experience, the age of the accounts receivable balances, credit-worthiness of the customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from the customers. The Group also provides specific provisions for allowance when facts and circumstances indicate that the receivable is unlikely to be collected. Expected credit losses for accounts receivable are recorded as general and administrative expenses on the consolidated statements of comprehensive income. The initial impact of applying ASC Topic 326 on the consolidated financial statements is immaterial to the Group's retained earnings as of January 1, 2020. ASC Topic 326 is also applicable to the loans to and interest receivable from other related parties included in the prepaid expenses and other current assets on the consolidated balance sheets. Management estimates the allowance for credit losses on loans and interest receivable not sharing similar risk characteristic on an individual basis, based on lifetime expected credit losses of these loans and interest receivable by estimating loan collection schedule, then discounting these cash flows to their present values. The key factors considered when determining the above allowances for credit losses include estimated loan collection schedule, discount rate, financial condition and performance data of the borrowers and reasonable and supportable performance forecasts. | Credit losses In 2016, the FASB issued ASC Topic 326, which amends previously issued guidance regarding the impairment of financial instruments by creating an impairment model that is based on expected losses. The guidance is applicable to accounts receivable and the Group adopted ASC Topic 326 on January 1, 2020. Accounts receivable are recorded at the original amounts less an allowance for any potential uncollectible amounts. The Group makes estimates of expected credit and collectability trends for the allowance for credit losses based upon assessment of various factors, including historical experience, the age of the accounts receivable balances, credit-worthiness of the customers, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect its ability to collect from the customers. The Group also provides specific provisions for allowance when facts and circumstances indicate that the receivable is unlikely to be collected. Expected credit losses for accounts receivable are recorded as general and administrative expenses on the unaudited interim condensed consolidated statements of comprehensive income. The initial impact of applying ASC Topic 326 on the consolidated financial statements is immaterial to the Group’s retained earnings as of January 1, 2020. ASC Topic 326 is also applicable to the loans to and interest receivable from other related parties included in the prepaid expenses and other current assets on the unaudited interim condensed consolidated balance sheets. Management estimates the allowance for credit losses on loans and interest receivable not sharing similar risk characteristic on an individual basis, based on lifetime expected credit losses of these loans and interest receivable by estimating loan collection schedule, then discounting these cash flows to their present values. The key factors considered when determining the above allowances for credit losses include estimated loan collection schedule, discount rate, financial condition and performance data of the borrowers and reasonable and supportable performance forecasts. |
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. The Group measures the equity method investments at fair value on a non-recurring basis only if an impairment charge were to be recognized. For those investments without readily determinable fair value, the Group measures them at fair value when observable price changes are identified or impairment charge was recognized. The fair values of the Group’s privately held investments as disclosed are determined based on the discounted cash flow model using the discount curve of market interest rates or based on the similar transaction price in the market directly. The fair values of the Group’s long-term investments in the equity securities of publicly listed companies are measured using quoted market prices. The Group’s non-financial assets, such as intangible assets, goodwill, fixed assets and operating lease assets, are measured at fair value only if they are determined to be impaired. 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 SINA, accounts payable, accrued and other liabilities approximates fair value because of their short-term nature. See Note 15 Fair Value Measurement | Fair value measurements Financial instruments All financial assets and liabilities are recognized or disclosed at fair value in the unaudited interim condensed 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. The Group measures the equity method investments at fair value on a non-recurring basis only if an impairment charge were to be recognized. For those investments without readily determinable fair value, the Group measures them at fair value when observable price changes are identified or impairment charge was recognized. The fair values of the Group’s privately held investments as disclosed are determined based on the discounted cash flow model using the discount curve of market interest rates or based on the similar transaction price in the market directly. The fair values of the Group’s long-term investments in the equity securities of publicly listed companies are measured using quoted market prices. The Group’s non-financial assets, such as intangible assets, goodwill, fixed assets and operating lease assets, are measured at fair value only if they are determined to be impaired. 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 SINA, accounts payable, accrued and other liabilities approximates fair value because of their short-term nature. See Note 15 Fair Value Measurement |
Long-term investments | Long-term investments Long-term investments are comprised of investments in publicly traded companies, privately held companies, and limited partnerships. The Group uses the equity method to account for ordinary-share-equivalent equity investments on which it has significant influence but does not own a majority equity interest or otherwise control. The Group measures investments in equity securities, other than equity method investments, at fair value through earnings. For those investments without readily determinable fair values, the Group elects to record these investments at cost, less impairment, plus or minus subsequent adjustments for observable price changes. Under this measurement alternative, changes in the carrying value of the investments will be recognized in consolidated statement of comprehensive income, whenever there are observable price changes in orderly transactions for the identical or similar investment of the same issuer. Pursuant to ASC 321, for equity investments measured at fair value with changes in fair value recorded in earnings, the Group does not assess whether those securities are impaired. For equity investments without readily determinable fair value for which the Group has elected to use the measurement alternative, the Group makes a qualitative assessment of whether the investment is impaired at each reporting date, applying significant judgement in considering various factors and events including a) adverse performance of investees; b) adverse industry developments affecting investees; and c) adverse regulatory, social, economic or other developments affecting investees. If a qualitative assessment indicates that the investment is impaired, the Group estimates the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the Group recognizes an impairment loss in net income equal to the difference between the carrying value and fair value. Significant judgement is applied by the Group in estimating the fair value to determine if an impairment exists, and if so, to measure the impairment losses for these equity security investments. These judgements include the selection of valuation methods in estimating fair value and the determination of key valuation assumptions used,including cash flow forecasts and critical assumptions used in cash flow forecasts, such as the investees’ revenue growth rate, terminal growth rate, discount rate, selection of comparable companies and multiples, estimated volatility rate and discount for lack of marketability. Investments in entities which the Group can exercise significant influence and holds an investment in voting common shares or in-substance common shares (or both) of the investee but does not own a majority equity interest or control are accounted for using the equity method of accounting in accordance with ASC topic 323 (“ASC 323”), Investment - Equity Method and Joint Ventures. Under the equity method, the Group initially records its investments at cost and the difference between the cost of the equity investee and the fair value of the underlying equity in the net assets of the equity investee is recognized as equity method goodwill, which is included in the equity method investment on the consolidated balance sheets. The Group subsequently adjusts the carrying amount of the investments to recognize the Group’s proportionate share of each equity investee’s net income or loss into earnings after the date of investment. The Group evaluates the equity method investments for impairment under ASC 323. An impairment loss on the equity method investments is recognized in earnings when the decline in value is determined to be other-than-temporary. In January 2020, the FASB issued ASU No. 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force). The amendments in this update clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. Early adoption is permitted. The Group adopted the ASU on January 1, 2021, which did not have a material impact on the consolidated financial statements. | Long-term investments Long-term investments are comprised of investments in publicly traded companies, privately held companies, and limited partnerships. The Group uses the equity method to account for ordinary-share-equivalent equity investments on which it has significant influence but does not own a majority equity interest or otherwise control. The Group measures investments in equity securities, other than equity method investments, at fair value through earnings. For those investments without readily determinable fair values, the Group elects to record these investments at cost, less impairment, plus or minus subsequent adjustments for observable price changes. Under this measurement alternative, changes in the carrying value of the investments will be recognized in unaudited interim condensed consolidated statement of comprehensive income, whenever there are observable price changes in orderly transactions for the identical or similar investment of the same issuer. Pursuant to ASC 321, for equity investments measured at fair value with changes in fair value recorded in earnings, the Group does not assess whether those securities are impaired. For equity investments without readily determinable fair value for which the Group has elected to use the measurement alternative, the Group makes a qualitative assessment of whether the investment is impaired at each reporting date, applying significant judgement in considering various factors and events including a) adverse performance of investees; b) adverse industry developments affecting investees; and c) adverse regulatory, social, economic or other developments affecting investees. If a qualitative assessment indicates that the investment is impaired, the Group estimates the investment’s fair value in accordance with the principles of ASC 820. If the fair value is less than the investment’s carrying value, the Group recognizes an impairment loss in net income equal to the difference between the carrying value and fair value. Significant judgement is applied by the Group in estimating the fair value to determine if an impairment exists, and if so, to measure the impairment losses for these equity security investments. These judgements include the selection of valuation methods in estimating fair value and the determination of key valuation assumptions used,including cash flow forecasts and critical assumptions used in cash flow forecasts, such as the investees’ revenue growth rate, terminal growth rate, discount rate, selection of comparable companies and multiples, estimated volatility rate and discount for lack of marketability. Investments in entities which the Group can exercise significant influence and holds an investment in voting common shares or in-substance common shares (or both) of the investee but does not own a majority equity interest or control are accounted for using the equity method of accounting in accordance with ASC topic 323 (“ASC 323”), Investment - Equity Method and Joint Ventures. Under the equity method, the Group initially records its investments at cost and the difference between the cost of the equity investee and the fair value of the underlying equity in the net assets of the equity investee is recognized as equity method goodwill, which is included in the equity method investment on the unaudited interim condensed consolidated balance sheets. The Group subsequently adjusts the carrying amount of the investments to recognize the Group’s proportionate share of each equity investee’s net income or loss into earnings after the date of investment. The Group evaluates the equity method investments for impairment under ASC 323. An impairment loss on the equity method investments is recognized in earnings when the decline in value is determined to be other-than-temporary. In January 2020, the FASB issued ASU No. 2020-01, Investments—Equity Securities (Topic 321), Investments—Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815)—Clarifying the Interactions between Topic 321, Topic 323, and Topic 815 (a consensus of the Emerging Issues Task Force). The amendments in this update clarify the interaction of the accounting for equity securities under Topic 321 and investments accounted for under the equity method of accounting in Topic 323 and the accounting for certain forward contracts and purchased options accounted for under Topic 815. For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2020, and interim periods within those fiscal years. For all other entities, the amendments are effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years. Early adoption is permitted. The Group adopted the ASU on January 1, 2021, which did not have a material impact on the unaudited interim condensed consolidated financial statements. |
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. | 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 unaudited interim condensed consolidated statements of comprehensive income. |
Leases | Leases In February 2016, the FASB issued a new standard on leases, ASU 2016-02, “Leases (Topic 842)”, which requires a lessee to recognize assets and liabilities arising from operating leases. A lessee should recognize a liability to make lease payments (the Lease Liability) and a right-of-use asset (the Operating Lease Assets) representing its right to use the underlying asset for the lease term. For leases with a term of twelve months or less, a lessee is permitted to make an accounting policy choice not to recognize lease assets and lease liabilities. In July 2018, the FASB issued an amendment, ASU 2018-11, which provides another transition method in addition to the existing transition methods by allowing entities to initially apply the new leases standard at the effective date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption and to not retrospectively adjust prior periods financial statements. On January 1, 2019, the Group adopted the new lease standard using the transition method by applying the standard to all leases existing at the date of initial application. The Group chose to not recognize lease assets and lease liabilities for leases with a term of twelve months or less, to not separate non-lease components from lease components, and to not reassess lease classification, treatment of initial direct costs or whether an existing or expired contract contains a lease according to the practical expedients permitted under the transition method. The Group did not retrospectively adjust the prior comparative periods. Under the new lease standard, the Group determines if an arrangement is or contains a lease at inception. Right-of-use assets and liabilities are recognized at lease commencement date based on the present value of remaining lease payments over the lease terms. The Group considers only payments that are fixed and determinable at the time of lease commencement. | Leases In February 2016, the FASB issued a new standard on leases, ASU 2016-02, “Leases (Topic 842)”, which requires a lessee to recognize assets and liabilities arising from operating leases. A lessee should recognize a liability to make lease payments (the Lease Liability) and a right-of-use asset (the Operating Lease Assets) representing its right to use the underlying asset for the lease term. For leases with a term of twelve months or less, a lessee is permitted to make an accounting policy choice not to recognize lease assets and lease liabilities. In July 2018, the FASB issued an amendment, ASU 2018-11, which provides another transition method in addition to the existing transition methods by allowing entities to initially apply the new leases standard at the effective date and recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption and to not retrospectively adjust prior periods financial statements. On January 1, 2019, the Group adopted the new lease standard using the transition method by applying the standard to all leases existing at the date of initial application. The Group chose to not recognize lease assets and lease liabilities for leases with a term of twelve months or less, to not separate non-lease components from lease components, and to not reassess lease classification, treatment of initial direct costs or whether an existing or expired contract contains a lease according to the practical expedients permitted under the transition method. The Group did not retrospectively adjust the prior comparative periods. Under the new lease standard, the Group determines if an arrangement is or contains a lease at inception. Right-of-use assets and liabilities are recognized at lease commencement date based on the present value of remaining lease payments over the lease terms. The Group considers only payments that are fixed and determinable at the time of lease commencement. |
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 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, consolidated VIEs and VIEs’ subsidiaries. The Group assesses goodwill for impairment in accordance with ASC Subtopic 350-20 (“ASC 350-20”), Intangibles - Goodwill and Other: Goodwill 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 three | |
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 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, consolidated VIEs and VIEs’ subsidiaries. The Group assesses goodwill for impairment in accordance with ASC Subtopic 350-20 (“ASC 350-20”), Intangibles - Goodwill and Other: Goodwill 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 three | |
Convertible debt and unsecured senior notes | Convertible debt and unsecured senior notes The Group determines the appropriate accounting treatment of its convertible debt in accordance with the terms in relation to the conversion feature. After considering the impact of such features, the Group may account for such instrument as a liability in its entirety, or separate the instrument into debt and equity components following the respective guidance described under ASC 815 Derivatives and Hedging Debt The debt discount, if any, together with related issuance cost are subsequently amortized as interest expense over the contractual life. The Group presented the issuance costs of debt as a direct deduction from the related debt during the periods presented. The unsecured senior notes are recognized initially at fair value, net of debt discounts or premiums, if any, issuance costs and other incidental fees, all of which are recorded as a direct deduction of the proceeds received from issuing the unsecured senior notes and the related accretion is recorded as interest expense in the consolidated statement of comprehensive income over the estimated term using the effective interest method. | Convertible debt and unsecured senior notes The Group determines the appropriate accounting treatment of its convertible debt in accordance with the terms in relation to the conversion feature. After considering the impact of such features, the Group may account for such instrument as a liability in its entirety, or separate the instrument into debt and equity components following the respective guidance described under ASC 815 Derivatives and Hedging Debt The debt discount, if any, together with related issuance cost are subsequently amortized as interest expense over the contractual life. The Group presented the issuance costs of debt as a direct deduction from the related debt during the periods presented. The unsecured senior notes are recognized initially at fair value, net of debt discounts or premiums, if any, issuance costs and other incidental fees, all of which are recorded as a direct deduction of the proceeds received from issuing the unsecured senior notes and the related accretion is recorded as interest expense in the unaudited interim condensed consolidated statement of comprehensive income over the estimated term using the effective interest method. |
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 VIP membership, live streaming, and virtual currency or in-game virtual items sold for game related services. | 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 VIP membership, live streaming, and virtual currency or in-game virtual items sold for game related services. |
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. 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. | 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 unaudited interim condensed consolidated statements of comprehensive income. Non-controlling interests are classified as a separate line item in the equity section of the Company’s unaudited interim condensed consolidated balance sheets and have been separately disclosed in the Company’s unaudited interim condensed consolidated financial statements to distinguish the interests from that of the Company. |
Foreign currency | Foreign currency The Company’s reporting currency and functional currency is 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 (loss) as a component of shareholders’ equity. Translation gains or losses are not released to net income 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 other income, net. Foreign currency translation adjustments included in the Group’s consolidated statements of comprehensive income for the six months ended June 30, 2020 and 2021 were a loss of $31.3 million and a gain of $29.2 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. | Foreign currency The Company’s reporting currency and functional currency is 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 (loss) as a component of shareholders’ equity. Translation gains or losses are not released to net income 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 other income, net. Foreign currency translation adjustments included in the Group’s unaudited interim condensed consolidated statements of comprehensive income for the nine months ended September 30, 2020 and 2021 were gains of $57.7 million and $34.9 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 per share | Net income per share Basic net income per share is computed using the weighted average number of ordinary shares outstanding during the period. Options and RSUs are not considered outstanding in the computation of basic earnings per share. Diluted net income per share is computed using the weighted average number of ordinary shares and potential ordinary shares outstanding during the period, which include options to purchase ordinary shares, restricted share units and conversion of the convertible debt. The computation of diluted net income 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 per share. The Group uses the two-class method to calculate net income per share though both classes share the same rights in dividends. Therefore, basic and diluted earnings per share are the same for both classes of ordinary shares. | Net income per share Basic net income per share is computed using the weighted average number of ordinary shares outstanding during the period. Options and RSUs are not considered outstanding in the computation of basic earnings per share. Diluted net income per share is computed using the weighted average number of ordinary shares and potential ordinary shares outstanding during the period, which include options to purchase ordinary shares, restricted share units and conversion of the convertible debt. The computation of diluted net income 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 per share. The Group uses the two-class method to calculate net income per share though 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 | Segment reporting In accordance with ASC 280, Segment Reporting |
Concentration of risks | Concentration of risks Concentration of credit risk. As of December 31, 2020 and June 30, 2021, the Group had $3.0 billion and $2.4 billion, 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, as an advertiser, accounted for 9% and 7% of the Group’s total revenues for the six months ended June 30, 2020 and 2021, respectively. No customer nor advertising agency accounted for 10% or more of the Group’s revenues. The Group’s top 10 advertising agencies contributed to 33% and 38% of the Group’s revenues for the six months ended June 30, 2020 and 2021, respectively. As of December 31, 2020 and June 30, 2021, 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 consist of amounts due from advertising agencies and direct customers. Alibaba accounted for 28% and 19% of the Group's net accounts receivable as of December 31, 2020 and June 30, 2021, respectively. Concentration of foreign currency risks. | Concentration of risks Concentration of credit risk. As of December 31, 2020 and September 30, 2021, the Group had $3.0 billion and $2.2 billion, 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, as an advertiser, accounted for 8% and 6% of the Group’s total revenues for the nine months ended September 30, 2020 and 2021, respectively. No customer nor advertising agency accounted for 10% or more of the Group’s revenues. The Group’s top 10 advertising agencies contributed to 32% and 40% of the Group’s revenues for the nine months ended September 30, 2020 and 2021, respectively. As of December 31, 2020 and September 30, 2021, 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 consist of amounts due from advertising agencies and direct customers. Alibaba accounted for 28% and 14% of the Group’s net accounts receivable as of December 31, 2020 and September 30, 2021, respectively. Concentration of foreign currency risks. |
Recent accounting pronouncements | Recent accounting pronouncements In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the amendments prospectively to modifications or exchanges occurring on or after the effective date of the amendments. The ASU is currently not expected to have a material impact on the consolidated financial statements. | Recent accounting pronouncements In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt — Modifications and Extinguishments (Subtopic 470-50), Compensation — Stock Compensation (Topic 718), and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40) to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. The amendments in this update are effective for all entities for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. An entity should apply the amendments prospectively to modifications or exchanges occurring on or after the effective date of the amendments. The ASU is currently not expected to have a material impact on the unaudited interim condensed consolidated financial statements. |
Operations (Tables)
Operations (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Operations | ||
Schedule of the Company's major subsidiaries, major VIE and major VIE's subsidiary | Percentage of Direct/ Indirect Date of Place of Economic Company Incorporation Incorporation Interest Major Subsidiaries Weibo Hong Kong Limited (“Weibo HK”) July 19, 2010 Hong Kong 100 % Weibo Internet Technology (China) Co., Ltd. (“Weibo Technology” or “the WFOE”) October 11, 2010 PRC 100 % WB Online Investment Limited (“WB Online”) June 5, 2014 Cayman Islands 100 % Hangzhou Weishichangmeng Advertising Co., Ltd. (“Weishichangmeng”) September 25, 2018 PRC 100 % Major VIEs Beijing Weimeng Technology Co., Ltd (“Weimeng”) August 9, 2010 PRC 99 % Beijing Weimeng Chuangke Investment Management Co., Ltd. (“Weimeng Chuangke”) April 9, 2014 PRC 100 % Major VIEs' subsidiary Beijing Weibo Interactive Internet Technology Co., Ltd. (“Weibo Interactive”) Acquired in May 2013 PRC 100 % | Percentage of Direct/ Indirect Date of Place of Economic Company Incorporation Incorporation Interest Major Subsidiaries Weibo Hong Kong Limited (“Weibo HK”) July 19, 2010 Hong Kong 100 % Weibo Internet Technology (China) Co., Ltd. (“Weibo Technology” or “the WFOE”) October 11, 2010 PRC 100 % WB Online Investment Limited (“WB Online”) June 5, 2014 Cayman Islands 100 % Hangzhou Weishichangmeng Advertising Co., Ltd. (“Weishichangmeng”) September 25, 2018 PRC 100 % Major VIEs Beijing Weimeng Technology Co., Ltd (“Weimeng”) August 9, 2010 PRC 99 % Beijing Weimeng Chuangke Investment Management Co., Ltd. (“Weimeng Chuangke”) April 9, 2014 PRC 100 % Major VIEs’ subsidiary Beijing Weibo Interactive Internet Technology Co., Ltd. (“Weibo Interactive”) Acquired in May 2013 PRC 100 % |
Schedule of total cost and expenses allocated from SINA | Six Months Ended June 30, 2020 2021 (Unaudited) (In thousands) Cost of revenues $ 11,112 $ 7,691 Sales and marketing 3,555 2,350 Product development 5,528 5,225 General and administrative 2,934 3,337 $ 23,129 $ 18,603 | Nine Months Ended September 30, 2020 2021 (In thousands) Cost of revenues $ 14,210 $ 11,544 Sales and marketing 1,079 2,832 Product development 7,112 7,692 General and administrative 6,725 6,728 $ 29,126 $ 28,796 |
Schedule of assets, liabilities, results of operations and cash flows of the VIE and the VIE's subsidiaries taken as a whole. | As of December 31, 2020 June 30, 2021 (In thousands) Cash, cash equivalents and short-term investments $ 445,210 $ 340,157 Accounts receivable 431,022 532,243 Prepaid expenses and other current assets 55,653 178,561 Amount due from SINA 31,142 26,032 Property and equipment, net 692 1,499 Operating lease assets 1,783 5,054 Intangible assets 146,976 157,177 Goodwill 61,712 113,604 Long-term investments 394,745 369,686 Deferred tax assets 15,392 15,516 Others 223 250,268 Total assets $ 1,584,550 $ 1,989,797 Accounts payable $ 83,336 $ 97,710 Accrued and other liabilities 341,552 399,549 Deferred revenues 85,846 89,098 Income taxes payable 26,417 67,347 Amount due to the subsidiaries of the Group 968,138 1,285,039 Operating lease liability 1,704 5,060 Deferred tax liability 32,418 34,008 Other non-current liabilities 2,102 8,506 Total liabilities $ 1,541,513 $ 1,986,317 Six Months Ended June 30, 2020 2021 (Unaudited) (In thousands) Net revenues $ 570,963 $ 794,981 Net loss after intercompany service fee charge $ (37,727) $ (62,726) Six Months Ended June 30, 2020 2021 (Unaudited) (In thousands) Net cash provided by (used in) operating activities $ (55,363) $ 317,989 Net cash used in investing activities (40,927) (468,791) Net cash provided by financing activities 36,837 31,406 Net decrease in cash and cash equivalents $ (59,453) $ (119,396) | As of December 31, 2020 September 30, 2021 (In thousands) Cash, cash equivalents and short-term investments $ 445,210 $ 359,508 Accounts receivable 431,022 599,831 Prepaid expenses and other current assets 55,653 445,338 Amount due from SINA 31,142 28,175 Property and equipment, net 692 1,872 Operating lease assets 1,783 4,602 Intangible assets 146,976 170,756 Goodwill 61,712 128,576 Long-term investments 394,745 412,122 Deferred tax assets 15,392 15,542 Others 223 245,006 Total assets $ 1,584,550 $ 2,411,328 Accounts payable $ 83,336 $ 114,551 Accrued and other liabilities 341,552 414,080 Deferred revenues 85,846 79,001 Income taxes payable 26,417 101,337 Amount due to the subsidiaries of the Group 968,138 1,666,777 Operating lease liability 1,704 4,587 Deferred tax liability 32,418 37,520 Other non-current liabilities 2,102 11,715 Total liabilities $ 1,541,513 $ 2,429,568 Nine Months Ended September 30, 2020 2021 (In thousands) Net revenues $ 925,789 $ 1,286,641 Net loss after intercompany service fee charge $ (138,779) $ (90,069) Nine Months Ended September 30, 2020 2021 (In thousands) Net cash provided by (used in) operating activities $ (20,553) $ 363,351 Net cash used in investing activities (30,331) (816,742) Net cash provided by financing activities 46,236 326,392 Net decrease in cash and cash equivalents $ (4,648) $ (126,999) |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Significant Accounting Policies | ||
Schedule of revenue disaggregated by revenue source | Six Months Ended June 30, 2020 2021 (Unaudited) (In thousands) Advertising and marketing revenues $ 616,006 $ 892,349 Value-added services revenues 94,776 141,013 Total revenues $ 710,782 $ 1,033,362 | Nine Months Ended September 30, 2020 2021 (In thousands) Advertising and marketing revenues $ 1,032,678 $ 1,429,969 Value-added services revenues 143,843 210,827 Total revenues $ 1,176,521 $ 1,640,796 |
Cash, Cash Equivalents and Sh_2
Cash, Cash Equivalents and Short-term Investments (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Cash, Cash Equivalents and Short-term Investments | ||
Schedule of cash, cash equivalents and short-term investments | As of December 31, June 30, 2020 2021 (In thousands) Cash and cash equivalents: Cash $ 1,814,844 $ 2,005,106 Short-term investments: Bank time deposits 1,515,880 750,467 Wealth management products 166,168 180,355 Subtotal 1,682,048 930,822 Total cash, cash equivalents and short-term investments $ 3,496,892 $ 2,935,928 | As of December 31, September 30, 2020 2021 (In thousands) Cash and cash equivalents: Cash $ 1,814,844 $ 1,828,691 Short-term investments: Bank time deposits 1,515,880 665,983 Wealth management products 166,168 212,504 Subtotal 1,682,048 878,487 Total cash, cash equivalents and short-term investments $ 3,496,892 $ 2,707,178 |
Long-term Investments (Tables)
Long-term Investments (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Long-term Investments | ||
Schedule of changes in the Group's long-term investments | Equity Securities Equity Securities With Without Readily Readily Determinable Fair Determinable Fair Values Equity Method Values Total (In thousands) Balance at December 31, 2020 $ 579,084 $ 311,161 $ 289,221 $ 1,179,466 Investments made/transfers from prepayments 47,957 103,932 — 151,889 Income from equity method investment, net — 13,605 — 13,605 Dividend received from equity method investments — (2,880) — (2,880) Disposal of investments (16,883) — (4,946) (21,829) Changes from measurement alternative to consolidation (Note 6) (66,415) — — (66,415) Impairment of investments (66,625) — — (66,625) Fair value change through earnings (26,810) — (42,685) (69,495) Currency translation adjustment 3,150 2,392 — 5,542 Balance at June 30, 2021 $ 453,458 $ 428,210 $ 241,590 $ 1,123,258 | Equity Securities Equity Securities With Without Readily Readily Determinable Fair Determinable Fair Values Equity Method Values Total (In thousands) Balance at December 31, 2020 $ 579,084 $ 311,161 $ 289,221 $ 1,179,466 Investments made/transfers from prepayments 67,957 159,584 — 227,541 Income from equity method investment, net — 17,688 — 17,688 Dividend received from equity method investments — (11,695) — (11,695) Disposal of investments (16,883) — (4,946) (21,829) Changes from measurement alternative to consolidation (Note 6) (66,415) — — (66,415) Reclassification of equity investment without readily determinable fair values to those with readily determinable fair values (142,000) — 142,000 — Impairment on investments (102,594) — — (102,594) Fair value change through earnings (26,810) — (6,263) (33,073) Currency translation adjustment 3,565 2,895 — 6,460 Balance at September 30, 2021 $ 295,904 $ 479,633 $ 420,012 $ 1,195,549 |
Schedule of the total carrying value of the equity securities accounted for measurement alternative | The following table summarizes the total carrying value of the equity investments accounted for under the measurement alternative as of June 30, 2021, including cumulative upward and downward adjustments made to the initial cost basis of the securities. The Group recorded $94.2 million downward adjustment for the six months ended June 30, 2021, which included $66.6 million impairment for equity investments accounted for under the measurement alternative in the period. The Group recorded a $59.4 million partial impairment for investment in Yixia Tech Co., Ltd. for the six months ended June 30, 2021 due to its unsatisfied financial performance with no obvious upturn or potential financing solutions in the foreseeable future. Cumulative Results (In thousands) Initial cost basis $ 835,552 Upward adjustments 82,217 Downward adjustments (477,891) Foreign currency translation 13,580 Total carrying value at June 30, 2021 $ 453,458 | Cumulative Results (In thousands) Initial cost basis $ 713,552 Upward adjustments 82,217 Downward adjustments (513,861) Foreign currency translation 13,996 Total carrying value at September 30, 2021 $ 295,904 |
Schedule of the carrying amount and fair value of the marketable security | Gross Gross Cost Unrealized Unrealized Fair Basis Gains Losses Value (In thousands) Showworld $ 81,385 $ 204,675 $ — $ 286,060 Other marketable securities 15,274 — (12,113) 3,161 December 31, 2020 $ 96,659 $ 204,675 $ (12,113) $ 289,221 Showworld $ 81,385 $ 160,205 $ — $ 241,590 June 30, 2021 $ 81,385 $ 160,205 $ — $ 241,590 | Gross Gross Cost Unrealized Unrealized Fair Basis Gains Losses Value (In thousands) Showworld $ 81,385 $ 204,675 $ — $ 286,060 Other marketable securities 15,274 — (12,113) 3,161 December 31, 2020 $ 96,659 $ 204,675 $ (12,113) $ 289,221 Showworld $ 81,385 $ 105,384 $ — $ 186,769 Didi $ 142,000 $ 91,243 $ — $ 233,243 September 30, 2021 $ 223,385 $ 196,627 $ — $ 420,012 |
Leases (Tables)
Leases (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Leases | ||
Schedule of components of lease cost | Six Months Ended June 30, 2020 2021 (Unaudited) (In thousands) Operating lease cost $ 2,246 $ 3,339 Short-term lease cost 1,611 1,921 Variable lease cost 2,131 2,598 Total lease cost $ 5,988 $ 7,858 | Nine Months Ended September 30, 2020 2021 (In thousands) Operating lease cost $ 3,515 $ 5,206 Short-term lease cost 2,336 2,940 Variable lease cost 3,349 4,041 Total lease cost $ 9,200 $ 12,187 |
Schedule of other information related to leases | Six Months Ended June 30, 2020 2021 (Unaudited) (In thousands) Supplemental Cash Flows Information: Cash paid for amounts included in the measurement of lease liabilities: Cash paid for operating leases $ (2,589) $ (3,938) Operating lease assets obtained in exchange for operating lease liabilities $ — $ 8,287 | Nine Months Ended September 30, 2020 2021 (In thousands) Supplemental Cash Flows Information: Cash paid for amounts included in the measurement of lease liabilities: Cash paid for operating leases $ (3,922) $ (5,824) Operating lease assets obtained in exchange for operating lease liabilities $ 1,183 $ 8,301 |
Schedule of maturities of lease liabilities under operating leases | Maturities of lease liabilities under operating leases as of June 30, 2021 were as follows: Twelve Months Ended June 30, (In thousands) 2022 $ 6,020 2023 2,020 2024 1,612 2025 1,434 2026 and thereafter 1,714 Total future payments for recognized leasing assets $ 12,800 Less: imputed interest 1,052 Total lease liabilities $ 11,748 | Maturities of lease liabilities under operating leases as of September 30, 2021 were as follows: Twelve Months Ended September 30, (In thousands) 2022 $ 5,001 2023 1,979 2024 1,617 2025 1,436 2026 and thereafter 1,358 Total future payments for recognized leasing assets $ 11,391 Less: imputed interest 1,155 Total lease liabilities $ 10,236 |
Goodwill, Intangible Assets a_2
Goodwill, Intangible Assets and Acquisitions (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Acquisitions, Goodwill and Intangible Assets | ||
Schedule of the changes in the Group's goodwill by segment | Advertising & Value-added Marketing services Total (In thousands) Balance as of December 31, 2020 $ 30,899 $ 30,813 $ 61,712 Acquisition of the company operating Wuta application 51,034 — 51,034 Currency translation adjustment 499 359 858 Balance as of June 30, 2021 $ 82,432 $ 31,172 $ 113,604 | Advertising & Value-added Marketing services Total (In thousands) Balance as of December 31, 2020 $ 30,899 $ 30,813 $ 61,712 Acquisition of the company operating Wuta application 51,034 — 51,034 Acquisition of an E-sports team — 14,745 14,745 Currency translation adjustment 638 447 1,085 Balance as of September 30, 2021 $ 82,571 $ 46,005 $ 128,576 |
Table summarizes the Group's intangible assets arising from acquisitions | As of December 31, 2020 As of June 30, 2021 Accumulated Accumulated Cost Amortization Net Cost Amortization Net (In thousands) (In thousands) Game related $ 127,238 $ (2,199) $ 125,039 $ 128,725 $ (8,905) $ 119,820 Technology 9,544 (4,417) 5,127 10,012 (4,918) 5,094 Trademark and Domain name 12,788 (1,542) 11,246 19,763 (2,792) 16,971 Supplier-relationship 10,253 (4,689) 5,564 10,373 (5,798) 4,575 Others 2,449 (2,449) — 13,706 (2,989) 10,717 Total $ 162,272 $ (15,296) $ 146,976 $ 182,579 $ (25,402) $ 157,177 | As of December 31, 2020 As of September 30, 2021 Accumulated Accumulated Cost Amortization Net Cost Amortization Net (In thousands) (In thousands) Game related $ 127,238 $ (2,199) $ 125,039 $ 148,262 $ (12,588) $ 135,674 Technology 9,544 (4,417) 5,127 10,029 (5,172) 4,857 Trademark and Domain name 12,788 (1,542) 11,246 19,796 (3,595) 16,201 Supplier-relationship 10,253 (4,689) 5,564 10,391 (6,336) 4,055 Others 2,449 (2,449) — 13,729 (3,760) 9,969 Total $ 162,272 $ (15,296) $ 146,976 $ 202,207 $ (31,451) $ 170,756 |
Schedule of estimated amortization expenses | Year Ended December 31, (In thousands) The remainder of 2021 $ 11,348 2022 22,347 2023 20,858 2024 19,191 2025 and thereafter 83,433 Total expected amortization expense $ 157,177 | Year Ended December 31, (In thousands) The remainder of 2021 $ 6,166 2022 24,317 2023 22,825 2024 21,156 2025 and thereafter 96,292 Total expected amortization expense $ 170,756 |
A mobile app company | ||
Acquisitions, Goodwill and Intangible Assets | ||
Schedule of consideration of acquisition was allocated based on their fair value of the assets acquired and the liabilities assumed | As of May 1, 2021 (In thousands) Consideration $ 39,540 Fair value of previously held equity interest 26,875 Non-controlling interest 10,811 Total 77,226 Cash and short-term investments acquired 5,786 Other assets acquired 6,801 Identifiable intangible assets acquired 16,495 Goodwill 51,034 Liabilities assumed (2,890) Total $ 77,226 | As of May 1, 2021 (In thousands) Consideration $ 39,540 Fair value of previously held equity interest 26,875 Non-controlling interest 10,811 Total 77,226 Cash and short-term investments acquired 5,786 Other assets acquired 6,801 Identifiable intangible assets acquired 16,495 Goodwill 51,034 Liabilities assumed (2,890) Total $ 77,226 |
An E-sports team | ||
Acquisitions, Goodwill and Intangible Assets | ||
Schedule of consideration of acquisition was allocated based on their fair value of the assets acquired and the liabilities assumed | As of August 1, 2021 (In thousands) Consideration $ 30,953 Identifiable intangible assets acquired 19,274 Goodwill 14,745 Liabilities assumed (3,066) Total $ 30,953 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Stock-Based Compensation | ||
Schedule of the stock-based compensation | Six Months Ended June 30, 2020 2021* (Unaudited) (In thousands) Cost of revenues $ 2,502 $ 3,240 Sales and marketing 4,263 5,549 Product development 14,452 18,213 General and administrative 8,971 9,219 $ 30,188 $ 36,221 * Excluded non-cash stock-based compensation of $1.6 million to SINA employees charged through Amount due from SINA for the six months end June 30, 2021. | Nine Months Ended September 30, 2020 2021* (In thousands) Cost of revenues $ 3,909 $ 5,690 Sales and marketing 6,886 10,249 Product development 22,890 29,260 General and administrative 14,100 16,059 $ 47,785 $ 61,258 * Excluded non-cash stock-based compensation of $5.2 million to SINA employees charged through Amount due from SINA for the nine months end September 30, 2021. |
Summary of the number of shares available for issuance | Shares Available (In thousands) December 31, 2020 12,495 Addition — Granted* (1,098) Cancelled/expired/forfeited 277 June 30, 2021 11,674 * During the six months ended June 30, 2021, 1.1 million restricted share units were granted under the 2014 Plan. No options were granted for the six months ended June 30, 2021. | Shares Available (In thousands) December 31, 2020 12,495 Addition — Granted* (4,407) Cancelled/expired/forfeited 613 September 30, 2021 8,701 * During the nine months ended September 30, 2021, 4.4 million restricted share units were granted under the 2014 Plan. No options were granted for the nine months ended September 30, 2021. |
Summary of option activities under the Company's stock option program | Weighted Average Options Weighted Average Remaining Aggregate Outstanding Exercise Price Contractual Life Intrinsic Value (In thousands) (In years) (In thousands) December 31, 2020 551 $ 28.85 5.8 $ 6,683 Granted — — Exercised (72) $ 3.50 Cancelled/expired/forfeited (10) 32.68 June 30, 2021 469 $ 32.68 6.1 $ 9,342 Vested and expected to vest as of June 30, 2021 423 $ 32.68 6.1 $ 8,428 Exercisable as of June 30, 2021 — $ — — $ — | Weighted Average Options Weighted Average Remaining Aggregate Outstanding Exercise Price Contractual Life Intrinsic Value (In thousands) (In years) (In thousands) December 31, 2020 551 $ 28.85 5.8 $ 6,683 Granted — — Exercised (102) $ 12.11 Cancelled/expired/forfeited (54) $ 32.68 September 30, 2021 395 $ 32.68 5.9 $ 5,847 Vested and expected to vest as of September 30, 2021 359 $ 32.68 5.9 $ 5,316 Exercisable as of September 30,2021 85 $ 32.68 5.9 $ 1,263 |
Schedule of stock options outstanding | Weighted Weighted Weighted Average Options Average Options Average Remaining Range of Exercise Prices Outstanding Exercise Price Exercisable Exercise Price Contractual Life (In thousands) (In thousands) (In years) $32.68 469 $ 32.68 — $ — — | Information regarding stock options outstanding at September 30, 2021 is summarized below: Weighted Weighted Weighted Average Options Average Options Average Remaining Range of Exercise Prices Outstanding Exercise Price Exercisable Exercise Price Contractual Life (In thousands) (In thousands) (In years) $32.68 395 $ 32.68 85 $ 32.68 5.9 |
Performance-Based Restricted Share Units | ||
Stock-Based Compensation | ||
Summary of restricted share unit activities | Weighted-Average Grant Date Shares Granted Fair Value (In thousands) December 31, 2020 17 $ 36.49 Awarded 1 $ 47.09 Vested (2) $ 36.49 Cancelled (15) $ 36.49 June 30, 2021 1 $ 47.09 | Weighted-Average Grant Date Shares Granted Fair Value (In thousands) December 31, 2020 17 $ 36.49 Awarded 15 $ 54.08 Vested (2) $ 38.78 Cancelled (19) $ 40.63 September 30, 2021 11 $ 54.17 |
Service-based restricted share units | ||
Stock-Based Compensation | ||
Summary of restricted share unit activities | Weighted- Average Shares Grant Date Granted Fair Value (In thousands) December 31, 2020 4,324 $ 41.86 Awarded 1,097 $ 46.06 Vested (520) $ 52.65 Cancelled (252) $ 38.98 June 30, 2021 4,649 $ 41.81 | Weighted- Average Shares Grant Date Granted Fair Value (In thousands) December 31, 2020 4,324 $ 41.86 Awarded 4,392 $ 50.44 Vested (1,299) $ 44.28 Cancelled (540) $ 44.01 September 30, 2021 6,877 $ 46.72 |
Other Balance Sheet Components
Other Balance Sheet Components (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Other Balance Sheet Components | ||
Schedule of other balance sheet components | As of June 30, December 31, June 30, 2020 2020 2021 (Unaudited) (In thousands) Accounts receivable, net: Due from third parties $ 343,220 $ 503,126 Due from Alibaba 135,321 122,991 Due from other related parties 48,625 40,972 Total gross amount $ 527,166 $ 667,089 Allowance for credit losses: Balance at the beginning of the year/period (36,594) (36,594) (35,156) Additional provision charged to expenses, net (25,233) (53,124) (10,444) Write-off 22,587 54,562 9,720 Balance at the end of the year/period (39,240) (35,156) (35,880) $ 492,010 $ 631,209 Prepaid expenses and other current assets: Rental and other deposits $ 1,186 $ 1,169 Deductible value-added taxes 598 4,960 Investment prepayment (1) 15,308 15,487 Loans to and interest receivable from other related parties (2) (Note 10) 158,622 336,558 Loans to and interest receivable from third parties (2) 41,784 148,891 Advertising prepayment 18,888 11,907 Prepayment to outsourced service providers 3,719 3,727 Amounts deposited by users (3) 45,745 49,849 Content fees 3,080 352 Others 7,827 14,393 $ 296,757 $ 587,293 Property and equipment, net: Computers and equipment $ 165,880 $ 173,498 Leasehold improvements 6,429 6,924 Furniture and fixtures 2,159 2,437 Others 5,077 6,431 Property and equipment, gross 179,545 189,290 Accumulated depreciation (118,913) (128,257) $ 60,632 $ 61,033 Other non-current assets Investment related deposits (4) $ 15,450 $ 408,432 Prepayment for purchase of SINA Plaza (5) — 131,636 Deferred tax assets 27,020 27,279 Others 2,126 14,998 $ 44,596 $ 582,345 Accrued and other liabilities (6) : Payroll and welfare $ 126,023 $ 138,603 Marketing expenses 59,410 79,173 Sales rebates 222,064 312,418 Professional fees 3,880 7,431 VAT and other tax payable 49,971 54,744 Amounts due to users (3) 45,745 49,849 Unpaid consideration for acquisition 10,280 — Unpaid consideration for investment 19,257 434 Interest payable for convertible debt and unsecured senior notes 923 27,579 Others 19,200 22,159 $ 556,753 $ 692,390 (1) For the year ended December 31,2020 and six months ended June 30, 2021, the Group recognized $1.5 million and nil of impairment charges on investment prepayment (all fully impaired), respectively, due to the deterioration of investees’ operations resulting in their inability to refund the prepayments. (2) Loans to related parties and third parties incurred for the six months ended June 30, 2021 were non-trade in nature. (3) Weibo wallet enables users to conduct interest-generation activities on Weibo, such as handing out “red envelopes” 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 receivable 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. (4) As of June 30, 2021, investment related deposits primarily included $76.7 million in a micro loan company, $79.0 million in an insurance company and $221.9 million in a game company. These non-current assets will be transferred to long-term investment when the legal procedures are completed. (5) Weibo entered into a letter of intent to purchase the office building (SINA Plaza) from SINA. As of June 30, 2021, the balance of prepayment for SINA Plaza was $131.6 million. (6) Include amounts due to third parties, employees, related parties (Note 10) and Weibo wallet users. | As of September 30, December 31, September 30, 2020 2020 2021 (In thousands) Accounts receivable, net: Due from third parties $ 343,220 $ 579,502 Due from Alibaba 135,321 98,262 Due from other related parties 48,625 41,229 Total gross amount $ 527,166 $ 718,993 Allowance for credit losses: Balance at the beginning of the year/period (36,594) (36,594) (35,156) Additional provision charged to expenses, net (52,900) (53,124) (13,160) Write-off 32,670 54,562 13,033 Balance at the end of the year/period (56,824) (35,156) (35,283) $ 492,010 $ 683,710 Prepaid expenses and other current assets: Rental and other deposits $ 1,186 $ 876 Deductible value-added taxes 598 4,545 Investment prepayment (1) 15,308 310 Loans to and interest receivable from other related parties (2) (Note 10) 158,622 283,904 Loans to and interest receivable from third parties (2) 41,784 575,323 Advertising prepayment 18,888 9,471 Prepayment to outsourced service providers 3,719 3,809 Amounts deposited by users (3) 45,745 51,412 Content fees 3,080 199 Others 7,827 14,195 $ 296,757 $ 944,044 Property and equipment, net: Computers and equipment $ 165,880 $ 183,829 Leasehold improvements 6,429 6,923 Furniture and fixtures 2,159 2,310 Others 5,077 7,150 Property and equipment, gross 179,545 200,212 Accumulated depreciation (118,913) (135,816) $ 60,632 $ 64,396 Other non-current assets Investment related deposits (4) $ 15,450 $ 410,741 Prepayment for purchase of SINA Plaza (5) — 131,859 Deferred tax assets 27,020 27,325 Others 2,126 7,702 $ 44,596 $ 577,627 Accrued and other liabilities (6) : Payroll and welfare $ 126,023 $ 177,235 Marketing expenses 59,410 77,339 Sales rebates 222,064 296,560 Professional fees 3,880 7,482 VAT and other tax payable 49,971 57,339 Amounts due to users (3) 45,745 51,412 Unpaid consideration for acquisition 10,280 6,205 Unpaid consideration for investment 19,257 434 Prepayment received for sale of an investee — 12,410 Interest payable for convertible debt and unsecured senior notes 923 17,063 Others 19,200 29,040 $ 556,753 $ 732,519 (1) For the year ended December 31, 2020 and nine months ended September 30, 2021, the Group recognized $1.5 million and nil of impairment charges on investment prepayment (all fully impaired), respectively, due to the deterioration of investees’ operations resulting in their inability to refund the prepayments. (2) Loans to related parties and third parties incurred for the nine months ended September 30, 2021 were non-trade in nature. (3) Weibo wallet enables users to conduct interest-generation activities on Weibo, such as handing out “red envelopes” 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 receivable 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 unaudited interim condensed consolidated balance sheets. (4) As of September 30, 2021, investment related deposits primarily included $76.8 million in a micro loan company, $79.1 million in an insurance company and $223.9 million in a game company. These non-current assets will be transferred to long-term investment when the legal procedures are completed. (5) Weibo entered into a letter of intent to purchase the office building (SINA Plaza) from SINA. As of September 30, 2021, the balance of prepayment for SINA Plaza was $131.9 million. (6) Include amounts due to third parties, employees, related parties (Note 10) and Weibo wallet users. |
Income Taxes (Tables)
Income Taxes (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Income Taxes | ||
Schedule of income before income taxes | Six Months Ended June 30, 2020 2021 (Unaudited) (In thousands, except percentage) Income before income tax expenses $ 306,631 $ 191,805 Less: Income (Loss) from non-China operations 79,717 (163,411) Income from China operations $ 226,914 $ 355,216 Income tax expense (benefits) applicable to non-China operations $ 13,296 $ (4,275) Income tax expense applicable to China operations 43,331 66,130 Total income tax expenses $ 56,627 $ 61,855 Effective tax rate for China operations 19.1 % 18.6 % | Nine Months Ended September 30, 2020 2021 (In thousands, except percentage) Income before income tax expenses $ 370,109 $ 405,011 Less: Income (Loss) from non-China operations 64,479 (198,398) Income from China operations $ 305,630 $ 603,409 Income tax expense (benefits) applicable to non-China operations $ 12,358 $ (9,757) Income tax expense applicable to China operations 74,272 103,017 Total income tax expenses $ 86,630 $ 93,260 Effective tax rate for China operations 24.3 % 17.1 % |
Schedule of current and deferred portion of income tax expenses | Six Months Ended June 30, 2020 2021 (Unaudited) (In thousands) Deferred tax provisions (benefits) $ 12,745 $ (5,061) Current income tax expenses 43,882 66,916 Income tax expenses $ 56,627 $ 61,855 | Nine Months Ended September 30, 2020 2021 (In thousands) Deferred tax provisions (benefits) $ 11,682 $ (11,546) Current income tax expenses 74,948 104,806 Income tax expenses $ 86,630 $ 93,260 |
Schedule of significant components of deferred tax assets and liabilities for China operations | As of December 31, 2020 June 30, 2021 (In thousands) Deferred tax assets: Net operating loss carry forwards $ 8,872 $ 8,976 Valuation allowance (8,872) (8,976) Depreciation, investment-related impairment, accounts receivable, accrued and other liabilities 107,892 109,154 Valuation allowance (80,872) (81,875) Net deferred tax assets (included in other non-current assets) $ 27,020 $ 27,279 Deferred tax liabilities: Acquired intangible assets $ 30,999 $ 32,652 Depreciation 1,435 1,452 Investment gain 25,496 21,571 Others 369 373 Total deferred tax liabilities $ 58,299 $ 56,048 | As of December 31, 2020 September 30, 2021 (In thousands) Deferred tax assets: Net operating loss carry forwards $ 8,872 $ 8,991 Valuation allowance (8,872) (8,991) Depreciation, investment-related impairment, accounts receivable, accrued and other liabilities 107,892 109,338 Valuation allowance (80,872) (82,013) Net deferred tax assets (included in other non-current assets) $ 27,020 $ 27,325 Deferred tax liabilities: Acquired intangible assets $ 30,999 $ 36,768 Depreciation 1,435 1,454 Investment gain 25,496 15,857 Others 369 374 Total deferred tax liabilities $ 58,299 $ 54,453 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
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. | 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 Group | Six Months Ended June 30, 2020 2021 (Unaudited) (In thousands) Transactions with SINA Revenue billed through SINA $ 23,712 $ 24,586 Revenue from services provided to SINA 11,534 11,707 Total $ 35,246 $ 36,293 Costs and expenses allocated from SINA (1) $ 23,129 $ 18,603 Interest income on loans to SINA $ 4,936 $ 9,995 Transactions with Alibaba Advertising and marketing revenues from Alibaba – as an advertiser $ 63,313 $ 73,266 Advertising and marketing revenues from Alibaba – as an agent $ 9,229 $ 36,652 Services provided by Alibaba $ 26,400 $ 21,504 (1) Costs and expenses allocated from SINA represented the charges for certain services provided by SINA’s affiliates and charged to the Group using actual cost allocation based on proportional utilization (Note 1). In addition to the allocated costs and expenses, SINA also billed $20.1 million and $21.9 million for other costs and expenses incurred by Weibo but paid by SINA for the six months ended June 30, 2020 and 2021, respectively. During the six months ended June 30, 2020 and 2021, Weibo allocated $3.0 million and $1.5 million to SINA for costs and expenses related to certain of SINA’s activities for which Weibo made the payments, respectively. | Nine Months Ended September 30, 2020 2021 (In thousands) Transactions with SINA Revenue billed through SINA $ 29,233 $ 46,374 Revenue from services provided to SINA 15,541 21,199 Total $ 44,774 $ 67,573 Costs and expenses allocated from SINA (1) $ 29,126 $ 28,796 Interest income on loans to SINA $ 8,647 $ 13,985 Transactions with Alibaba Advertising and marketing revenues from Alibaba – as an advertiser $ 92,468 $ 94,068 Advertising and marketing revenues from Alibaba – as an agent $ 20,438 $ 40,824 Services provided by Alibaba $ 39,634 $ 33,462 (1) Costs and expenses allocated from SINA represented the charges for certain services provided by SINA’s affiliates and charged to the Group using actual cost allocation based on proportional utilization (Note 1). In addition to the allocated costs and expenses, SINA also billed $32.9 million and $35.5 million for other costs and expenses incurred by Weibo but paid by SINA for the nine months ended September 30, 2020 and 2021, respectively. During the nine months ended September 30, 2020 and 2021, Weibo allocated $5.7 million and $2.2 million to SINA for costs and expenses related to certain of SINA’s activities for which Weibo made the payments, respectively. |
Schedule of related party outstanding balance | As of December 31, June 30, 2020 2021 (In thousands) Amount due from SINA (2) $ 548,900 $ 498,618 Accounts receivable due from Alibaba $ 135,321 $ 122,991 Loans to and interest receivable (3)(4) - Company A (an investee in e-commerce business) $ 79,762 $ 18,546 - Company B (an investee providing social and new media marketing services) 21,771 15,056 - Company C (an investee providing online brokerage services) 41,205 270,898 - Others 15,884 32,058 Total $ 158,622 $ 336,558 (2) 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 incurred by Weibo business but paid by SINA, transactions with third-party customers and suppliers settled through SINA, as well as business transactions between Weibo and SINA. These balances are trade in nature. As of December 31, 2020, and June 30, 2021, the amount due from SINA also included loans to and interest receivable from SINA of $547.9 million and $480.7 million at an annual interest rate ranging from 1.0% to 4.5% of maturity within one year, respectively, which are non-trade in nature. (3) The annual interest rates of the loans were ranging from 3.5% to 10% (interest free for Company B) and the maturities of all loans were within one year at both dates. These balances are non-trade in nature. (4) The Group assessed the collectability of outstanding loans at least on annual basis or whenever impairment indicators noted. For the year ended December 31, 2020, the Group recognized $82.2 million impairment charges on loans to and interest receivable from other related parties due to their unsatisfied financial performance and decline in forecasted revenues. For the six months ended June 30, 2021, the Group didn’t recognize any impairment charges on Loans to and interest receivable from other related parties. | As of December 31, September 30, 2020 2021 (In thousands) Amount due from SINA (2) $ 548,900 $ 515,534 Accounts receivable due from Alibaba $ 135,321 $ 98,262 Loans to and interest receivable (3)(4) - Company A (an investee in e-commerce business) $ 79,762 $ — - Company B (an investee providing social and new media marketing services) 21,771 15,082 - Company C (an investee providing online brokerage services) 41,205 231,304 - Others 15,884 37,518 Total $ 158,622 $ 283,904 (2) 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 incurred by Weibo business but paid by SINA, transactions with third-party customers and suppliers settled through SINA, as well as business transactions between Weibo and SINA. As of December 31, 2020 and September 30, 2021, the amount due from SINA also included loans to and interest receivable from SINA of $547.9 million and $487.9 million at an annual interest rate ranging from 1.0% to 4.5% of maturity within one year, respectively. (3) The annual interest rates of the loans were ranging from 3.5% to 10.0% (interest free for Company B) and the maturities of all loans were within one year at both dates. (4) The Group assessed the collectability of outstanding loans at least on annual basis or whenever impairment indicators noted. For the nine months ended September 30, 2020 and 2021, the Group recognized $50.2 million and nil impairment charges on loans to and interest receivable from other related parties, respectively. |
SINA (Note 10) | ||
Related party transactions | ||
Schedule of significant related party transactions with the Group | Six Months Ended June 30, 2020 2021 (Unaudited) (In thousands) Transactions with SINA Advertising and marketing revenues $ 27,624 $ 30,931 Value-added services revenues 7,622 5,362 Total $ 35,246 $ 36,293 | Nine Months Ended September 30, 2020 2021 (In thousands) Transactions with SINA Advertising and marketing revenues $ 34,149 $ 58,178 Value-added services revenues 10,625 9,395 Total $ 44,774 $ 67,573 |
Net Income per Share (Tables)
Net Income per Share (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Net Income per Share | ||
Schedule of basic and diluted net income per share | Six Months Ended June 30, 2020 2021 (Unaudited) (In thousands, except per share data) Basic net income per share calculation: Numerator: Net income attributable to Weibo's shareholders $ 250,524 $ 130,848 Denominator: Weighted average ordinary shares outstanding 226,535 227,936 Basic net income per share attributable to Weibo's shareholders $ 1.11 $ 0.57 Diluted net income per share calculation: Numerator: Net income attributable to Weibo's shareholders for calculating diluted net income per share $ 250,524 $ 130,848 Denominator: Weighted average ordinary shares outstanding 226,535 227,936 Effects of dilutive securities Stock options 76 82 Unvested restricted share units 518 1,411 Shares used in computing diluted net income per share attributable to Weibo's shareholders 227,129 229,429 Diluted net income per share attributable to Weibo's shareholders $ 1.10 $ 0.57 | Nine Months Ended September 30, 2020 2021 (In thousands, except per share data) Basic net income per share calculation: Numerator: Net income attributable to Weibo’s shareholders $ 284,322 $ 312,586 Denominator: Weighted average ordinary shares outstanding 226,728 228,185 Basic net income per share attributable to Weibo’s shareholders $ 1.25 $ 1.37 Diluted net income per share calculation: Numerator: Net income attributable to Weibo’s shareholders for calculating diluted net income per share $ 284,322 $ 312,586 Denominator: Weighted average ordinary shares outstanding 226,728 228,185 Effects of dilutive securities Stock options 73 85 Unvested restricted share units 551 1,495 Shares used in computing diluted net income per share attributable to Weibo’s shareholders 227,352 229,765 Diluted net income per share attributable to Weibo’s shareholders $ 1.25 $ 1.36 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Segment Information | ||
Schedule of the Group's revenues | Revenues Advertising & Marketing Value-added services Total (In thousands) Six months ended June 30, 2020 (Unaudited) $ 616,006 $ 94,776 $ 710,782 Six months ended June 30, 2021 $ 892,349 $ 141,013 $ 1,033,362 | Revenues Advertising & Marketing Value-added services Total (In thousands) Nine months ended September 30, 2020 $ 1,032,678 $ 143,843 $ 1,176,521 Nine months ended September 30, 2021 $ 1,429,969 $ 210,827 $ 1,640,796 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Fair Value Measurement | ||
Schedule of assets measured at fair value on a recurring basis, the respective fair value and the classification by level of input within the fair value hierarchy | Fair Value Measurements Quoted Prices in Active Market Significant Other Significant for Identical Assets Observable Inputs Unobservable Inputs Total (Level 1) (Level 2) (Level 3) (In thousands) As of December 31, 2020: Bank time deposits * $ 1,515,880 $ — $ 1,515,880 $ — Wealth management products * 166,168 — 166,168 — Equity securities with readily determinable market value ** 289,221 289,221 — — Total $ 1,971,269 $ 289,221 $ 1,682,048 $ — As of June 30, 2021: Bank time deposits * $ 750,467 $ — $ 750,467 $ — Wealth management products * 180,355 — 180,355 — Equity securities with readily determinable market value ** 241,590 241,590 — — Total $ 1,172,412 $ 241,590 $ 930,822 $ — * Included in short-term investments on the Group’s consolidated balance sheets. ** Included in long-term investments on the Group’s consolidated balance sheets. | Fair Value Measurements Quoted Prices in Active Market Significant Other Significant for Identical Assets Observable Inputs Unobservable Inputs Total (Level 1) (Level 2) (Level 3) (In thousands) As of December 31, 2020: Bank time deposits* $ 1,515,880 $ — $ 1,515,880 $ — Wealth management products* 166,168 — 166,168 — Equity securities with readily determinable market value ** 289,221 289,221 — — Total $ 1,971,269 $ 289,221 $ 1,682,048 $ — As of September 30, 2021: Bank time deposits* $ 665,983 $ — $ 665,983 $ — Wealth management products* 212,504 — 212,504 — Equity securities with readily determinable market value ** 420,012 420,012 — — Total $ 1,298,499 $ 420,012 $ 878,487 $ — * Included in short-term investments on the Group’s unaudited interim condensed consolidated balance sheets. ** Included in long-term investments on the Group’s unaudited interim condensed consolidated balance sheets. |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Commitments and Contingencies | ||
Schedule of future minimum lease payments commitments | Less than One One to Three to More than Operating lease commitments Total Year Three Years Five Years Five Years (In thousands) As of June 30, 2021 $ 12,800 $ 6,020 $ 3,632 $ 2,855 $ 293 | Less than One One to Three to More than Operating lease commitments Total Year Three Years Five Years Five Years (In thousands) As of September 30, 2021 $ 11,391 $ 5,001 $ 3,596 $ 2,661 $ 133 |
Schedule of purchase commitments | Less than One One to Three to More than Purchase commitments Total Year Three Years Five Years Five Years (In thousands) As of June 30, 2021 $ 591,545 $ 561,167 $ 28,263 $ 2,093 $ 22 | Less than One One to Three to More than Purchase commitments Total Year Three Years Five Years Five Years (In thousands) As of September 30, 2021 $ 620,620 $ 588,994 $ 29,613 $ 2,006 $ 7 |
Schedule of other commitments | Less than One One to Three to More than Other commitments Total Year Three Years Five Years Five Years (In thousands) 2022 Notes $ 916,867 $ 11,250 $ 905,617 $ — $ — 2024 Notes 898,000 28,000 56,000 814,000 — 2030 Notes 990,469 25,313 50,625 50,625 863,906 Total $ 2,805,336 $ 64,563 $ 1,012,242 $ 864,625 $ 863,906 | Less than One One to Three to More than Other commitments Total Year Three Years Five Years Five Years (In thousands) 2022 Notes $ 916,867 $ 11,250 $ 905,617 $ — $ — 2024 Notes 884,000 28,000 856,000 — — 2030 Notes 977,812 25,312 50,625 50,625 851,250 Total $ 2,778,679 $ 64,562 $ 1,812,242 $ 50,625 $ 851,250 |
Operations (Details)
Operations (Details) $ in Millions | 1 Months Ended | 6 Months Ended | 9 Months Ended |
Apr. 30, 2014USD ($) | Jun. 30, 2021Vote | Sep. 30, 2021Vote | |
Class A ordinary shares | |||
Operations | |||
Number of votes each share is entitled to | 1 | 1 | |
Number of Class A shares converted from Class B shares | 1 | 1 | |
Class B ordinary shares | |||
Operations | |||
Number of votes each share is entitled to | 3 | 3 | |
IPO | Class A ordinary shares | |||
Operations | |||
Proceeds from IPO | $ | $ 306.5 | ||
Weimeng | |||
Operations | |||
Percentage of Direct/Indirect Economic Interest in VIEs | 99.00% | 99.00% | |
Weimeng Chuangke | |||
Operations | |||
Percentage of Direct/Indirect Economic Interest in VIEs | 100.00% | 100.00% | |
Weibo Interactive | |||
Operations | |||
Percentage of Direct/Indirect Economic Interest in VIEs | 100.00% | 100.00% | |
Weibo HK | |||
Operations | |||
Percentage of Direct/Indirect Economic Interest | 100.00% | 100.00% | |
Weibo Technology | |||
Operations | |||
Percentage of Direct/Indirect Economic Interest | 100.00% | 100.00% | |
WB Online | |||
Operations | |||
Percentage of Direct/Indirect Economic Interest | 100.00% | 100.00% | |
Weishichangmeng | |||
Operations | |||
Percentage of Direct/Indirect Economic Interest | 100.00% | 100.00% |
Operations - Assets, Liabilitie
Operations - Assets, Liabilities, Statement of Operations and Cash Flows (Details) ¥ in Millions | 1 Months Ended | 6 Months Ended | 9 Months Ended | |||
Apr. 30, 2020CNY (¥)director | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2020USD ($) | |
Operations | ||||||
Costs and allocated expenses from SINA | $ 18,603,000 | $ 23,129,000 | $ 28,796,000 | $ 29,126,000 | ||
Interest-free loans to the VIE's shareholders | 90,600,000 | 90,700,000 | $ 89,500,000 | |||
VIEs and VIEs' subsidiaries accumulated deficit | 158,800,000 | 186,100,000 | 96,100,000 | |||
Assets and liabilities of the VIEs and their subsidiaries | ||||||
Cash, cash equivalents and short-term investments | 2,935,928,000 | 2,707,178,000 | 3,496,892,000 | |||
Accounts receivable | 631,209,000 | 683,710,000 | 492,010,000 | |||
Prepaid expenses and other current assets | 587,293,000 | 944,044,000 | 296,757,000 | |||
Property and equipment, net | 61,033,000 | 64,396,000 | 60,632,000 | |||
Operating lease assets | 12,260,000 | 10,666,000 | 7,176,000 | |||
Intangible assets | 157,177,000 | 170,756,000 | 146,976,000 | |||
Goodwill | 113,604,000 | 128,576,000 | 61,712,000 | |||
Long-term investments | 1,123,258,000 | 1,195,549,000 | 1,179,466,000 | |||
Deferred tax assets | 27,279,000 | 27,325,000 | 27,020,000 | |||
Others | 14,998,000 | 7,702,000 | 2,126,000 | |||
Total assets | 6,702,725,000 | 6,998,036,000 | 6,335,117,000 | |||
Accounts payable | 159,497,000 | 177,647,000 | 149,509,000 | |||
Accrued and other liabilities | 692,390,000 | 732,519,000 | 556,753,000 | |||
Deferred revenues | 146,085,000 | 132,468,000 | 143,684,000 | |||
Income taxes payable | 89,100,000 | 115,241,000 | 102,844,000 | |||
Operating lease liability | 11,748,000 | 10,236,000 | ||||
Deferred tax liability | 56,048,000 | 54,453,000 | 58,299,000 | |||
Other non-current liabilities | 8,505,000 | 11,714,000 | 2,102,000 | |||
Total liabilities | 3,595,107,000 | 3,667,623,000 | 3,448,787,000 | |||
Results of operations of the VIEs and their subsidiaries | ||||||
Net revenues | 1,033,362,000 | 710,782,000 | 1,640,796,000 | 1,176,521,000 | ||
Net loss after intercompany service fee charge | 130,848,000 | 250,524,000 | 312,586,000 | 284,322,000 | ||
Cash flows of the VIE and its subsidiary | ||||||
Net cash provided by (used in) operating activities | 338,357,000 | 185,264,000 | 564,352,000 | 420,495,000 | ||
Net cash used in investing activities | (162,508,000) | (154,782,000) | (567,860,000) | (1,240,855,000) | ||
Net cash provided by financing activities | 226,000 | 1,625,000 | 1,214,000 | 741,963,000 | ||
Contractual Arrangements with the VIE | ||||||
Assets, except for registered capital of VIEs, that can only be used to settle obligations of the respective VIEs | 0 | 0 | 0 | |||
Registered capital and non-distributable reserve funds of VIE and its subsidiaries | $ 228,500,000 | $ 228,800,000 | 196,600,000 | |||
Term of loan agreements | 10 years | 10 years | ||||
Term of trademark license agreements | 1 year | 1 year | ||||
Service fees revenue charged to VIE | $ 438,500,000 | 312,700,000 | $ 744,100,000 | 528,600,000 | ||
SINA (Note 10) | ||||||
Operations | ||||||
Costs and allocated expenses from SINA | 18,603,000 | 23,129,000 | 28,796,000 | 29,126,000 | ||
WangTouTongDa (Beijing) Technology Co., Ltd. | ||||||
Minority Investment In Weimeng | ||||||
Sale of subsidiaries' shares to non-controlling interests | ¥ | ¥ 10.7 | |||||
Percentage of enlarged registered capital invested | 1.00% | |||||
Number of member of board of directors the entity has right to appoint | director | 3 | |||||
Consolidated VIEs | ||||||
Operations | ||||||
Costs and allocated expenses from SINA | 1,900,000 | 7,200,000 | 2,600,000 | 7,000,000 | ||
Assets and liabilities of the VIEs and their subsidiaries | ||||||
Cash, cash equivalents and short-term investments | 340,157,000 | 359,508,000 | 445,210,000 | |||
Accounts receivable | 532,243,000 | 599,831,000 | 431,022,000 | |||
Prepaid expenses and other current assets | 178,561,000 | 445,338,000 | 55,653,000 | |||
Amount due from SINA | 26,032,000 | 31,142,000 | ||||
Property and equipment, net | 1,499,000 | 1,872,000 | 692,000 | |||
Operating lease assets | 5,054,000 | 4,602,000 | 1,783,000 | |||
Intangible assets | 157,177,000 | 170,756,000 | 146,976,000 | |||
Goodwill | 113,604,000 | 128,576,000 | 61,712,000 | |||
Long-term investments | 369,686,000 | 412,122,000 | 394,745,000 | |||
Deferred tax assets | 15,516,000 | 15,542,000 | 15,392,000 | |||
Others | 250,268,000 | 245,006,000 | 223,000 | |||
Total assets | 1,989,797,000 | 2,411,328,000 | 1,584,550,000 | |||
Accounts payable | 97,710,000 | 114,551,000 | 83,336,000 | |||
Accrued and other liabilities | 399,549,000 | 414,080,000 | 341,552,000 | |||
Deferred revenues | 89,098,000 | 79,001,000 | 85,846,000 | |||
Income taxes payable | 67,347,000 | 101,337,000 | 26,417,000 | |||
Amount due to the subsidiaries of the Group | 1,285,039,000 | 1,666,777,000 | 968,138,000 | |||
Operating lease liability | 5,060,000 | 4,587,000 | 1,704,000 | |||
Deferred tax liability | 34,008,000 | 37,520,000 | 32,418,000 | |||
Other non-current liabilities | 8,506,000 | 11,715,000 | 2,102,000 | |||
Total liabilities | 1,986,317,000 | 2,429,568,000 | 1,541,513,000 | |||
Results of operations of the VIEs and their subsidiaries | ||||||
Net revenues | 794,981,000 | 570,963,000 | 1,286,641,000 | 925,789,000 | ||
Net loss after intercompany service fee charge | (62,726,000) | (37,727,000) | (90,069,000) | (138,779,000) | ||
Cash flows of the VIE and its subsidiary | ||||||
Net cash provided by (used in) operating activities | 317,989,000 | (55,363,000) | 363,351,000 | (20,553,000) | ||
Net cash used in investing activities | (468,791,000) | (40,927,000) | (816,742,000) | (30,331,000) | ||
Net cash provided by financing activities | 31,406,000 | 36,837,000 | 326,392,000 | 46,236,000 | ||
Net decrease in cash and cash equivalents | $ (119,396,000) | (59,453,000) | (126,999,000) | (4,648,000) | ||
Consolidated VIEs | SINA (Note 10) | ||||||
Assets and liabilities of the VIEs and their subsidiaries | ||||||
Amount due from SINA | $ 28,175,000 | $ 31,142,000 | ||||
Weimeng | ||||||
Minority Investment In Weimeng | ||||||
Percentage of equity interests the entity will not be able to purchase or have the New Weimeng Shareholder pledge | 1.00% | 1.00% | ||||
Percentage of equity interests for which the authorization of voting rights will not be granted to entity | 1.00% | 1.00% | ||||
Percentage of equity interests issued | 1.00% | 1.00% | ||||
Costs of revenues | ||||||
Operations | ||||||
Costs and allocated expenses from SINA | $ 7,691,000 | 11,112,000 | $ 11,544,000 | 14,210,000 | ||
Sales and marketing | ||||||
Operations | ||||||
Costs and allocated expenses from SINA | 2,350,000 | 3,555,000 | 2,832,000 | 1,079,000 | ||
Product development | ||||||
Operations | ||||||
Costs and allocated expenses from SINA | 5,225,000 | 5,528,000 | 7,692,000 | 7,112,000 | ||
General and administrative | ||||||
Operations | ||||||
Costs and allocated expenses from SINA | $ 3,337,000 | $ 2,934,000 | $ 6,728,000 | $ 6,725,000 |
Significant Accounting Polici_4
Significant Accounting Policies (Details) - USD ($) $ in Thousands | Jun. 30, 2019 | Jun. 30, 2021 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2021 | Sep. 30, 2020 |
Revenues: | ||||||
Revenues | $ 1,033,362 | $ 710,782 | $ 1,640,796 | $ 1,176,521 | ||
Revenue recognized that was included in the deferred revenue | 104,500 | 120,100 | ||||
Sales and Marketing Expenses | ||||||
Advertising and promotional expenses | $ 219,900 | 156,900 | $ 312,900 | 230,300 | ||
Options | ||||||
Stock-based compensation | ||||||
Vesting period | 4 years | 4 years | ||||
Service-based restricted share units | ||||||
Stock-based compensation | ||||||
Vesting period | 4 years | 4 years | ||||
Advertising and marketing revenues | ||||||
Revenues: | ||||||
Revenues | $ 892,349 | 616,006 | $ 1,429,969 | 1,032,678 | ||
Costs and Expenses | ||||||
Cultural business construction fees (as a percent) | 3.00% | 3.00% | 1.50% | 3.00% | ||
Cultural business construction fees exempted | $ 11,500 | 10,300 | $ 18,800 | 15,700 | ||
Advertising and marketing revenues | Maximum | ||||||
Revenues: | ||||||
Period over social display ad arrangements allow customers to place advertisements on particular areas of the Group's platform in particular formats | 3 months | 3 months | ||||
Value-added services revenues | ||||||
Revenues: | ||||||
Revenues | $ 141,013 | $ 94,776 | $ 210,827 | $ 143,843 |
Significant Accounting Polici_5
Significant Accounting Policies - Lease (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |||
Operating lease asset | $ 10,666 | $ 12,260 | $ 7,176 |
Operating lease liability | $ 10,236 | $ 11,748 |
Significant Accounting Polici_6
Significant Accounting Policies - Property and Equipment (Details) - USD ($) $ in Millions | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Property and equipment | ||||
Depreciation expenses | $ 16.1 | $ 12 | $ 24.3 | $ 18.9 |
Computers and equipment | Minimum | ||||
Property and equipment | ||||
Estimated useful lives of assets | 3 years | 3 years | ||
Computers and equipment | Maximum | ||||
Property and equipment | ||||
Estimated useful lives of assets | 4 years | 4 years | ||
Furniture and fixtures | ||||
Property and equipment | ||||
Estimated useful lives of assets | 5 years | 5 years |
Significant Accounting Polici_7
Significant Accounting Policies - Goodwill and Intangible Assets Other Than Goodwill, Foreign Currency and Segment Reporting (Details) | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2021USD ($)segment | Jun. 30, 2020USD ($) | Sep. 30, 2021USD ($)segment | Sep. 30, 2020USD ($) | |
Goodwill impairment | ||||
Provision of goodwill impairment | $ 0 | $ 0 | ||
Foreign currency | ||||
Gains from foreign currency translation adjustments | $ 29,222,000 | $ (31,347,000) | $ 34,888,000 | $ 57,670,000 |
Segment reporting | ||||
Number of principal business segments | segment | 2 | 2 | ||
Minimum | ||||
Intangible assets other than goodwill | ||||
Estimated useful lives of intangible assets | 3 years | 3 years | ||
Maximum | ||||
Intangible assets other than goodwill | ||||
Estimated useful lives of intangible assets | 10 years | 10 years |
Significant Accounting Polici_8
Significant Accounting Policies - Concentration of Risks (Details) $ in Thousands | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2021USD ($)Agencycustomer | Jun. 30, 2020customerAgency | Sep. 30, 2021USD ($)Agencycustomer | Sep. 30, 2020Agencycustomer | Dec. 31, 2020USD ($) | |
Concentration of risks | |||||
Cash, cash equivalents and short-term investments | $ 2,935,928 | $ 2,707,178 | $ 3,496,892 | ||
Accounts receivable denominated in RMB | 631,209 | 683,710 | 492,010 | ||
Current liabilities denominated in RMB | 1,092,666 | 1,162,280 | 958,370 | ||
Cash, cash equivalents and short-term investments | Concentration of credit risk | China Contribution Plan | |||||
Concentration of risks | |||||
Cash, cash equivalents and short-term investments | $ 2,400,000 | $ 2,200,000 | 3,000,000 | ||
Maximum term of original maturity of time deposits | 12 months | 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 | $ 1,451,600 | $ 1,228,000 | $ 1,651,300 | ||
Percentage of benchmark derived from specified source | 49.00% | 45.00% | 47.00% | ||
Consolidated net revenues benchmark | Customer concentration risk | |||||
Concentration of risks | |||||
Other customers or advertising agencies accounting for 10% or more of the Group's revenues | customer | 0 | 0 | 0 | 0 | |
Consolidated net revenues benchmark | Customer concentration risk | Alibaba (Note 10) | |||||
Concentration of risks | |||||
Percentage of benchmark derived from specified source | 7.00% | 9.00% | 6.00% | 8.00% | |
Consolidated net accounts receivables benchmark | Concentration of credit risk | Alibaba (Note 10) | |||||
Concentration of risks | |||||
Percentage of benchmark derived from specified source | 19.00% | 14.00% | 28.00% | ||
Consolidated net accounts receivables benchmark | Concentration of foreign currency risks | RMB | |||||
Concentration of risks | |||||
Accounts receivable denominated in RMB | $ 631,200 | $ 683,700 | $ 492,000 | ||
Current liabilities | Concentration of foreign currency risks | RMB | |||||
Concentration of risks | |||||
Current liabilities denominated in RMB | $ 1,064,100 | $ 1,139,000 | $ 947,600 | ||
Percentage of benchmark derived from specified source | 97.00% | 98.00% | 99.00% | ||
Advertising and marketing revenues | Consolidated net revenues benchmark | Customer concentration risk | Top 10 advertising agencies | China Contribution Plan | |||||
Concentration of risks | |||||
Number of advertising agencies | Agency | 10 | 10 | 10 | 10 | |
Percentage of benchmark derived from specified source | 38.00% | 33.00% | 40.00% | 32.00% |
Cash, Cash Equivalents and Sh_3
Cash, Cash Equivalents and Short-term Investments (Details) - USD ($) $ in Thousands | 6 Months Ended | 9 Months Ended | ||||
Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Cash and cash equivalents: | ||||||
Cash | $ 2,005,106 | $ 1,472,251 | $ 1,828,691 | $ 1,411,929 | $ 1,814,844 | $ 1,452,985 |
Short-term investments: | ||||||
Bank time deposits | 750,467 | 665,983 | 1,515,880 | |||
Wealth management products | 180,355 | 212,504 | 166,168 | |||
Subtotal | 930,822 | 878,487 | 1,682,048 | |||
Total cash, cash equivalents and short-term investments | 2,935,928 | 2,707,178 | $ 3,496,892 | |||
Interest income | $ 40,068 | $ 45,609 | $ 56,909 | $ 65,667 | ||
Maximum maturity period of time deposits and wealth management products | 1 year | 1 year |
Long-term Investments - Changes
Long-term Investments - Changes in Long-term Investments (Details) - USD ($) $ in Thousands | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Long-term investments | ||||
Balance at the beginning of the year | $ 1,179,466 | $ 1,179,466 | ||
Investments made/transfers from prepayments | 151,889 | 227,541 | ||
Income from equity method investments, net | 13,605 | $ 3,388 | 17,688 | $ 4,422 |
Dividend received from equity method investments | (2,880) | (11,695) | ||
Disposal of investments | (21,829) | (21,829) | ||
Changes from measurement alternative to consolidation (Note 6) | (66,415) | (66,415) | ||
Reclassification of equity investment without readily determinable fair values to those with readily determinable fair values | 0 | |||
Impairment on investments | (66,625) | (102,594) | ||
Fair value change through earnings | (69,495) | $ 117,517 | (33,073) | $ 127,641 |
Currency translation adjustment | 5,542 | 6,460 | ||
Balance at the end of year | 1,123,258 | 1,195,549 | ||
Cost Method | ||||
Long-term investments | ||||
Balance at the beginning of the year | 579,084 | 579,084 | ||
Investments made/transfers from prepayments | 47,957 | 67,957 | ||
Income from equity method investments, net | 0 | 0 | ||
Dividend received from equity method investments | 0 | 0 | ||
Disposal of investments | (16,883) | (16,883) | ||
Changes from measurement alternative to consolidation (Note 6) | (66,415) | (66,415) | ||
Reclassification of equity investment without readily determinable fair values to those with readily determinable fair values | (142,000) | |||
Impairment on investments | (66,625) | (102,594) | ||
Fair value change through earnings | (26,810) | (26,810) | ||
Currency translation adjustment | 3,150 | 3,565 | ||
Balance at the end of year | 453,458 | 295,904 | ||
Equity Method | ||||
Long-term investments | ||||
Balance at the beginning of the year | 311,161 | 311,161 | ||
Investments made/transfers from prepayments | 103,932 | 159,584 | ||
Income from equity method investments, net | 13,605 | 17,688 | ||
Dividend received from equity method investments | (2,880) | (11,695) | ||
Disposal of investments | 0 | 0 | ||
Changes from measurement alternative to consolidation (Note 6) | 0 | 0 | ||
Reclassification of equity investment without readily determinable fair values to those with readily determinable fair values | 0 | |||
Impairment on investments | 0 | 0 | ||
Fair value change through earnings | 0 | 0 | ||
Currency translation adjustment | 2,392 | 2,895 | ||
Balance at the end of year | 428,210 | 479,633 | ||
Equity Securities With Readily Determinable Fair Values | ||||
Long-term investments | ||||
Balance at the beginning of the year | 289,221 | 289,221 | ||
Investments made/transfers from prepayments | 0 | 0 | ||
Income from equity method investments, net | 0 | 0 | ||
Dividend received from equity method investments | 0 | 0 | ||
Disposal of investments | (4,946) | (4,946) | ||
Changes from measurement alternative to consolidation (Note 6) | 0 | 0 | ||
Reclassification of equity investment without readily determinable fair values to those with readily determinable fair values | 142,000 | |||
Impairment on investments | 0 | 0 | ||
Fair value change through earnings | (42,685) | (6,263) | ||
Currency translation adjustment | 0 | 0 | ||
Balance at the end of year | $ 241,590 | $ 420,012 |
Long-term Investments (Details)
Long-term Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Long-term Investments | ||||
Investments made/transferred from prepayments | $ 151,889 | $ 227,541 | ||
Cost Method | ||||
Long-term Investments | ||||
Investments made/transferred from prepayments | 47,957 | 67,957 | ||
Cost Method | Private high tech companies | ||||
Long-term Investments | ||||
Investments made/transferred from prepayments | 48,000 | 68,000 | ||
Equity Method | ||||
Long-term Investments | ||||
Investments made/transferred from prepayments | $ 103,932 | 159,584 | ||
A mobile app company | ||||
Long-term Investments | ||||
Cash consideration | $ 39,500 | |||
Fair value change loss for equity interest previously held by Group immediately before step acquisition | $ 27,600 | |||
A mobile app company | Cost Method | ||||
Long-term Investments | ||||
Investments made/transferred from prepayments | 39,500 | $ 39,500 | ||
A mobile app company | Equity Method | A commercial search business | ||||
Long-term Investments | ||||
Fair value change loss for equity interest previously held by Group immediately before step acquisition | $ 27,600 |
Long-term Investments - Carryin
Long-term Investments - Carrying Value of Equity Investments (Details) - USD ($) $ in Thousands | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Total carrying value of the equity securities | ||||
Downward adjustment | $ 94,200 | $ 130,200 | ||
Impairment for equity investments accounted for under the measurement alternative | 66,600 | 102,600 | ||
Investment related impairment | 66,625 | $ 3,920 | 102,594 | $ 117,835 |
Initial cost basis | 835,552 | 713,552 | ||
Upward adjustments | 82,217 | 82,217 | ||
Downward adjustments | (477,891) | (513,861) | ||
Foreign currency translation | 13,580 | 13,996 | ||
Total carrying value at the end of the period | 453,458 | 295,904 | ||
Yixia Tech | ||||
Total carrying value of the equity securities | ||||
Investment related impairment | $ 59,400 | $ 75,300 |
Long-term Investments - Additio
Long-term Investments - Additional Information (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Long-term Investments | |||
Investment | $ 295,904 | $ 453,458 | |
Equity securities with readily determinable market value | 420,012 | 241,590 | $ 289,221 |
Unrealized loss on investments | 0 | 0 | $ 12,113 |
Didi | |||
Long-term Investments | |||
Equity securities with readily determinable market value | 233,243 | ||
Unrealized loss on investments | 0 | ||
Equity Method | |||
Long-term Investments | |||
Equity securities with readily determinable market value | 420,000 | 241,600 | |
Unrealized loss on investments | $ 6,300 | 42,700 | |
Cost Method | Didi | |||
Long-term Investments | |||
Investment | $ 142,000 |
Long-term Investments - Carry_2
Long-term Investments - Carrying Amount and Fair Value (Details) - USD ($) $ in Thousands | 9 Months Ended | |||
Sep. 30, 2021 | Jul. 01, 2021 | Jun. 30, 2021 | Dec. 31, 2020 | |
Carrying amount and fair value of the marketable security | ||||
Cost Basis | $ 223,385 | $ 81,385 | $ 96,659 | |
Gross Unrealized Gains | 196,627 | 160,205 | 204,675 | |
Gross Unrealized Losses | 0 | 0 | (12,113) | |
Fair Value | 420,012 | 241,590 | 289,221 | |
Showworld | ||||
Carrying amount and fair value of the marketable security | ||||
Cost Basis | 81,385 | 81,385 | 81,385 | |
Gross Unrealized Gains | 105,384 | 160,205 | 204,675 | |
Gross Unrealized Losses | 0 | 0 | 0 | |
Fair Value | 186,769 | $ 241,590 | 286,060 | |
Fair value change gain (loss) | (99,300) | |||
Didi | ||||
Carrying amount and fair value of the marketable security | ||||
Cost Basis | 142,000 | $ 142,000 | ||
Gross Unrealized Gains | 91,243 | |||
Gross Unrealized Losses | 0 | |||
Fair Value | 233,243 | |||
Fair value change gain (loss) | $ 91,200 | |||
Other marketable securities | ||||
Carrying amount and fair value of the marketable security | ||||
Cost Basis | 15,274 | |||
Gross Unrealized Gains | 0 | |||
Gross Unrealized Losses | (12,113) | |||
Fair Value | $ 3,161 |
Leases (Details)
Leases (Details) - USD ($) | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Components of lease cost | ||||
Operating lease cost | $ 3,339,000 | $ 2,246,000 | $ 5,206,000 | $ 3,515,000 |
Short-term lease cost | 1,921,000 | 1,611,000 | 2,940,000 | 2,336,000 |
Variable lease cost | 2,598,000 | 2,131,000 | 4,041,000 | 3,349,000 |
Total lease cost | 7,858,000 | 5,988,000 | 12,187,000 | 9,200,000 |
Cash paid for amounts included in the measurement of lease liabilities: | ||||
Cash paid for operating leases | (3,938,000) | (2,589,000) | (5,824,000) | (3,922,000) |
Operating lease assets obtained in exchange for operating lease liabilities | 8,287,000 | $ 0 | 8,301,000 | $ 1,183,000 |
Maturities of lease liabilities under operating leases, Twelve Months Ended June 30, | ||||
2022 | 6,020,000 | 5,001,000 | ||
2023 | 2,020,000 | 1,979,000 | ||
2024 | 1,612,000 | 1,617,000 | ||
2025 | 1,434,000 | 1,436,000 | ||
2026 and thereafter | 1,714,000 | 1,358,000 | ||
Total future payments for recognized leasing assets | 12,800,000 | 11,391,000 | ||
Less: imputed interest | 1,052,000 | 1,155,000 | ||
Total lease liabilities | $ 11,748,000 | $ 10,236,000 | ||
Average remaining lease term | 3 years 7 months 6 days | 3 years 7 months 6 days | ||
Weighted-average discount rate (as a percent) | 5.00% | 5.00% | ||
Lease contracts that has been entered into but not yet commenced | $ 0 | $ 0 |
Goodwill, Intangible Assets a_3
Goodwill, Intangible Assets and Acquisitions - Additional Information (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |||
Aug. 31, 2021 | Jun. 30, 2021 | Aug. 01, 2021 | May 01, 2021 | Mar. 31, 2021 | |
A mobile app company | |||||
Business Acquisition | |||||
Total equity interest | 86.00% | ||||
A mobile app company | |||||
Business Acquisition | |||||
Equity interest acquired | 51.20% | ||||
Equity interest held | 34.80% | ||||
Cash consideration | $ 39,500 | ||||
Identifiable intangible assets acquired on acquisition date | $ 16,500 | $ 16,495 | |||
A mobile app company | Minimum | |||||
Business Acquisition | |||||
Identifiable intangible assets acquired, estimated lives | 3 years | ||||
A mobile app company | Maximum | |||||
Business Acquisition | |||||
Identifiable intangible assets acquired, estimated lives | 10 years | ||||
An E-sports team | |||||
Business Acquisition | |||||
Identifiable intangible assets acquired on acquisition date | $ 19,300 | $ 19,274 | |||
Identifiable intangible assets acquired, estimated lives | 10 years |
Goodwill, Intangible Assets a_4
Goodwill, Intangible Assets and Acquisitions - Allocation of Consideration (Details) - USD ($) $ in Thousands | Aug. 01, 2021 | May 01, 2021 | Jun. 30, 2021 | Sep. 30, 2021 | Aug. 31, 2021 | Dec. 31, 2020 |
Business combination allocated based on fair value of the assets and the liabilities | ||||||
Goodwill | $ 113,604 | $ 128,576 | $ 61,712 | |||
A mobile app company | ||||||
Acquisitions, Goodwill and Intangible Assets | ||||||
Cash consideration | 39,500 | |||||
Business combination allocated based on fair value of the assets and the liabilities | ||||||
Consideration | $ 39,540 | |||||
Fair value of previously held equity interest | 26,875 | |||||
Non-controlling interest | 10,811 | |||||
Cash and short-term investments acquired | 5,786 | |||||
Other assets acquired | 6,801 | |||||
Identifiable intangible assets acquired | 16,495 | $ 16,500 | ||||
Goodwill | 51,034 | |||||
Liabilities assumed | (2,890) | |||||
Total | $ 77,226 | |||||
An E-sports team | ||||||
Business combination allocated based on fair value of the assets and the liabilities | ||||||
Consideration | $ 30,953 | |||||
Identifiable intangible assets acquired | 19,274 | $ 19,300 | ||||
Goodwill | 14,745 | |||||
Liabilities assumed | (3,066) | |||||
Total | $ 30,953 |
Goodwill, Intangible Assets a_5
Goodwill, Intangible Assets and Acquisitions - Changes in the Group's Goodwill (Details) - USD ($) $ in Thousands | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Changes in the Group's goodwill by segment | ||
Balance at the beginning of the year | $ 61,712 | $ 61,712 |
Acquisition | 51,034 | |
Currency translation adjustment | 858 | 1,085 |
Balance at the end of the year | 113,604 | 128,576 |
Advertising and marketing revenues | ||
Changes in the Group's goodwill by segment | ||
Balance at the beginning of the year | 30,899 | 30,899 |
Acquisition | 51,034 | |
Currency translation adjustment | 499 | 638 |
Balance at the end of the year | 82,432 | 82,571 |
Value-added services revenues | ||
Changes in the Group's goodwill by segment | ||
Balance at the beginning of the year | 30,813 | 30,813 |
Acquisition | 0 | |
Currency translation adjustment | 359 | 447 |
Balance at the end of the year | $ 31,172 | 46,005 |
A mobile app company | ||
Changes in the Group's goodwill by segment | ||
Acquisition | 51,034 | |
A mobile app company | Advertising and marketing revenues | ||
Changes in the Group's goodwill by segment | ||
Acquisition | 51,034 | |
A mobile app company | Value-added services revenues | ||
Changes in the Group's goodwill by segment | ||
Acquisition | 0 | |
An E-sports team | ||
Changes in the Group's goodwill by segment | ||
Acquisition | 14,745 | |
An E-sports team | Value-added services revenues | ||
Changes in the Group's goodwill by segment | ||
Acquisition | $ 14,745 |
Goodwill, Intangible Assets a_6
Goodwill, Intangible Assets and Acquisitions - Intangible assets arising from acquisitions (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Acquired finite-lived intangible assets | |||
Cost | $ 202,207 | $ 182,579 | $ 162,272 |
Accumulated Amortization | (31,451) | (25,402) | (15,296) |
Intangible assets, net | 170,756 | 157,177 | 146,976 |
Game related | |||
Acquired finite-lived intangible assets | |||
Cost | 148,262 | 128,725 | 127,238 |
Accumulated Amortization | (12,588) | (8,905) | (2,199) |
Intangible assets, net | 135,674 | 119,820 | 125,039 |
Technology | |||
Acquired finite-lived intangible assets | |||
Cost | 10,029 | 10,012 | 9,544 |
Accumulated Amortization | (5,172) | (4,918) | (4,417) |
Intangible assets, net | 4,857 | 5,094 | 5,127 |
Trademark and Domain name | |||
Acquired finite-lived intangible assets | |||
Cost | 19,796 | 19,763 | 12,788 |
Accumulated Amortization | (3,595) | (2,792) | (1,542) |
Intangible assets, net | 16,201 | 16,971 | 11,246 |
Supplier-relationship | |||
Acquired finite-lived intangible assets | |||
Cost | 10,391 | 10,373 | 10,253 |
Accumulated Amortization | (6,336) | (5,798) | (4,689) |
Intangible assets, net | 4,055 | 4,575 | 5,564 |
Others | |||
Acquired finite-lived intangible assets | |||
Cost | 13,729 | 13,706 | 2,449 |
Accumulated Amortization | (3,760) | (2,989) | (2,449) |
Intangible assets, net | $ 9,969 | $ 10,717 | $ 0 |
Goodwill, Intangible Assets a_7
Goodwill, Intangible Assets and Acquisitions - Future Amortization Expenses (Details) - USD ($) $ in Thousands | 6 Months Ended | 9 Months Ended | |||
Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Goodwill, Intangible Assets and Acquisitions | |||||
Amortization expense | $ 9,900 | $ 1,600 | $ 15,900 | $ 2,500 | |
Future estimated amortization expenses | |||||
The remainder of 2021 | 11,348 | 6,166 | |||
2022 | 22,347 | 24,317 | |||
2023 | 20,858 | 22,825 | |||
2024 | 19,191 | 21,156 | |||
2025 and thereafter | 83,433 | 96,292 | |||
Intangible assets, net | $ 157,177 | $ 170,756 | $ 146,976 |
Stock-Based Compensation - Ince
Stock-Based Compensation - Incentive Plan Details (Details) - shares shares in Thousands | Jan. 01, 2015 | Mar. 31, 2014 | Jun. 30, 2021 | Sep. 30, 2021 |
Stock-Based Compensation | ||||
Number of additional shares for the plan | 0 | 0 | ||
Stock based compensation, amortization period | 4 years | 4 years | ||
Performance-based restricted shares | ||||
Stock-Based Compensation | ||||
Stock based compensation, amortization period | 1 year | 1 year | ||
2014 Plan | ||||
Stock-Based Compensation | ||||
Ordinary shares reserved for issuance | 4,600 | |||
Number of additional shares for the plan | 1,000 | |||
Term of share incentive plan | 10 years | |||
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 | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Stock-based compensation | ||||
Total | $ 36,221 | $ 30,188 | $ 61,258 | $ 47,785 |
SINA (Note 10) | ||||
Stock-based compensation | ||||
Non-cash stock-based compensation charged through Amount due from SINA | 1,600 | 5,200 | ||
Costs of revenues | ||||
Stock-based compensation | ||||
Total | 3,240 | 2,502 | 5,690 | 3,909 |
Sales and marketing | ||||
Stock-based compensation | ||||
Total | 5,549 | 4,263 | 10,249 | 6,886 |
Product development | ||||
Stock-based compensation | ||||
Total | 18,213 | 14,452 | 29,260 | 22,890 |
General and administrative | ||||
Stock-based compensation | ||||
Total | $ 9,219 | $ 8,971 | $ 16,059 | $ 14,100 |
Stock-Based Compensation - Numb
Stock-Based Compensation - Number of Shares Available for Issuance (Details) - USD ($) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Mar. 31, 2014 | Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Number of shares available for issuance | ||||||
Number of shares available for issuance, beginning | 12,495,000 | 12,495,000 | ||||
Addition (in shares) | 0 | 0 | ||||
Granted (in shares) | (1,098,000) | (4,407,000) | ||||
Cancelled/expired/forfeited (in shares) | 277,000 | 613,000 | ||||
Number of shares available for issuance, ending | 11,674,000 | 8,701,000 | 12,495,000 | |||
Aggregate Intrinsic Value | ||||||
Fair value per ordinary share (in dollars per share) | $ 52.62 | $ 47.49 | $ 40.99 | |||
Cash received from the exercise of stock option | $ 226 | $ 108 | $ 1,214 | $ 122 | ||
2014 Plan | ||||||
Number of shares available for issuance | ||||||
Addition (in shares) | 1,000,000 | |||||
Options | ||||||
Number of shares available for issuance | ||||||
Granted (in shares) | 0 | 0 | ||||
Options Outstanding | ||||||
Outstanding at the beginning of the year (in shares) | 551,000 | 551,000 | ||||
Granted (in shares) | 0 | 0 | ||||
Exercised (in shares) | (72,000) | (102,000) | ||||
Cancelled/expired/forfeited (in shares) | (10,000) | (54,000) | ||||
Outstanding at the end of the year (in shares) | 469,000 | 395,000 | 551,000 | |||
Vested and expected to vest at the end of the year (in shares) | 423,000 | 359,000 | ||||
Exercisable at the end of the year (in shares) | 0 | 85,000 | ||||
Weighted Average Exercise Price | ||||||
Outstanding at the beginning of the year (in dollars per share) | $ 28.85 | $ 28.85 | ||||
Granted (in dollars per share) | 0 | 0 | ||||
Exercised (in dollars per share) | 3.50 | 12.11 | ||||
Cancelled/expired/forfeited (in dollars per share) | 32.68 | 32.68 | ||||
Outstanding at the end of the year (in dollars per share) | 32.68 | 32.68 | $ 28.85 | |||
Vested and expected to vest at the end of the year (in dollars per share) | 32.68 | 32.68 | ||||
Exercisable at the end of the year (in dollars per share) | $ 0 | $ 32.68 | ||||
Weighted Average Remaining Contractual Life (In years) | ||||||
Outstanding at the end of the year | 6 years 1 month 6 days | 5 years 10 months 24 days | 5 years 9 months 18 days | |||
Vested and expected to vest at the end of the year | 6 years 1 month 6 days | 5 years 10 months 24 days | ||||
Exercisable at the end of the year | 0 years | 5 years 10 months 24 days | ||||
Aggregate Intrinsic Value | ||||||
Outstanding at the end of the year | $ 9,342 | $ 5,847 | $ 6,683 | |||
Vested and expected to vest at the end of the year | 8,428 | 5,316 | ||||
Exercisable at the end of the year | 0 | 1,263 | ||||
Total intrinsic value of options exercised | 3,400 | 4,000 | ||||
Cash received from the exercise of stock option | 200 | $ 100 | 1,200 | $ 100 | ||
Unrecognized compensation cost | $ 4,500 | $ 3,600 | ||||
Expected weighted-average recognition period for unrecognized compensation cost | 3 years 1 month 6 days | 2 years 10 months 24 days | ||||
Options | 2014 Plan | ||||||
Number of shares available for issuance | ||||||
Granted (in shares) | 0 | 0 | ||||
Options Outstanding | ||||||
Granted (in shares) | 0 | 0 | ||||
Restricted share units | 2014 Plan | ||||||
Number of shares available for issuance | ||||||
Restricted shares units granted (in shares) | 1,100,000 | 4,400,000 |
Stock-Based Compensation - Summ
Stock-Based Compensation - Summary of Option Activities (Details) - Options - $ / shares shares in Thousands | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Range of Exercise Prices | ||
Exercise prices, outstanding stock option awards (in dollars per share) | $ 32.68 | |
Options Outstanding (in shares) | 395 | |
Weighted Average Exercise Price (in dollars per share) | $ 32.68 | |
Options Exercisable (in shares) | 85 | |
Weighted Average Exercise Price (in dollars per share) | $ 32.68 | |
Weighted Average Remaining Contractual Life (In years) | 5 years 10 months 24 days | |
$0.96 - 1.80 | ||
Range of Exercise Prices | ||
Exercise prices, outstanding stock option awards, low end of range (in dollars per share) | $ 32.68 | |
Options Outstanding (in shares) | 469 | |
Weighted Average Exercise Price (in dollars per share) | $ 32.68 | |
Options Exercisable (in shares) | 0 | |
Weighted Average Exercise Price (in dollars per share) | $ 0 | |
Weighted Average Remaining Contractual Life (In years) | 0 years |
Stock-Based Compensation - Rest
Stock-Based Compensation - Restricted Share Units (Details) - USD ($) $ / shares in Units, shares in Thousands | 6 Months Ended | 9 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | |
Performance-Based Restricted Share Units | ||
Shares Granted | ||
Outstanding at the beginning of the period (in shares) | 17 | 17 |
Awarded (in shares) | 1 | 15 |
Vested (in shares) | (2) | (2) |
Cancelled (in shares) | (15) | (19) |
Outstanding at the end of the period (in shares) | 1 | 11 |
Weighted-Average Grant Date Fair Value | ||
Outstanding at the beginning of the period (in dollars per share) | $ 36.49 | $ 36.49 |
Awarded (in dollars per share) | 47.09 | 54.08 |
Vested (in dollars per share) | 36.49 | 38.78 |
Cancelled (in dollars per share) | 36.49 | 40.63 |
Outstanding at the end of the period (in dollars per share) | $ 47.09 | $ 54.17 |
Unrecognized compensation cost | $ 0 | $ 0 |
Service-based restricted share units | ||
Shares Granted | ||
Outstanding at the beginning of the period (in shares) | 4,324 | 4,324 |
Awarded (in shares) | 1,097 | 4,392 |
Vested (in shares) | (520) | (1,299) |
Cancelled (in shares) | (252) | (540) |
Outstanding at the end of the period (in shares) | 4,649 | 6,877 |
Weighted-Average Grant Date Fair Value | ||
Outstanding at the beginning of the period (in dollars per share) | $ 41.86 | $ 41.86 |
Awarded (in dollars per share) | 46.06 | 50.44 |
Vested (in dollars per share) | 52.65 | 44.28 |
Cancelled (in dollars per share) | 38.98 | 44.01 |
Outstanding at the end of the period (in dollars per share) | $ 41.81 | $ 46.72 |
Unrecognized compensation cost | $ 134,400,000 | $ 232,900,000 |
Expected weighted-average recognition period for unrecognized compensation cost | 2 years 8 months 12 days | 3 years 3 months 18 days |
Total fair value vested | $ 27,400,000 | $ 66,900,000 |
Other Balance Sheet Component_2
Other Balance Sheet Components - Accounts Receivable (Details) - USD ($) | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Accounts receivable, net: | |||||
Accounts receivable due from third parties, gross | $ 503,126,000 | $ 579,502,000 | $ 343,220,000 | ||
Total gross amount | 667,089,000 | 718,993,000 | 527,166,000 | ||
Allowance for credit losses: | |||||
Balance at the beginning of the year/period | (35,156,000) | $ (36,594,000) | (35,156,000) | $ (36,594,000) | (36,594,000) |
Additional provision charged to expenses, net | (10,444,000) | (25,233,000) | (13,160,000) | (52,900,000) | (53,124,000) |
Write-off | 9,720,000 | 22,587,000 | 13,033,000 | 32,670,000 | 54,562,000 |
Balance at the end of the year/period | (35,880,000) | $ (39,240,000) | (35,283,000) | $ (56,824,000) | (35,156,000) |
Accounts receivable, net | 631,209,000 | 683,710,000 | 492,010,000 | ||
Alibaba (Note 10) | |||||
Accounts receivable, net: | |||||
Accounts receivable due from related parties, gross | 122,991,000 | 98,262,000 | 135,321,000 | ||
Allowance for credit losses: | |||||
Balance at the beginning of the year/period | 0 | 0 | |||
Balance at the end of the year/period | 0 | 0 | 0 | ||
Other related parties (Note 10) | |||||
Accounts receivable, net: | |||||
Accounts receivable due from related parties, gross | 40,972,000 | 41,229,000 | 48,625,000 | ||
Allowance for credit losses: | |||||
Balance at the beginning of the year/period | (6,095,000) | (6,095,000) | |||
Balance at the end of the year/period | 0 | (64) | (6,095,000) | ||
Third parties | |||||
Allowance for credit losses: | |||||
Balance at the beginning of the year/period | (29,061,000) | (29,061,000) | |||
Balance at the end of the year/period | $ (35,880,000) | $ (35,219,000) | $ (29,061,000) |
Other Balance Sheet Component_3
Other Balance Sheet Components - Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Prepaid expenses and other current assets: | |||
Rental and other deposits | $ 876 | $ 1,169 | $ 1,186 |
Deductible value-added taxes | 4,545 | 4,960 | 598 |
Investment prepayments | 310 | 15,487 | 15,308 |
Loans to and interest receivable from other related parties (Note 10) | 283,904 | 336,558 | 158,622 |
Loans to and interest receivable from third parties | 575,323 | 148,891 | 41,784 |
Advertising prepayment | 9,471 | 11,907 | 18,888 |
Prepayment to outsourced service providers | 3,809 | 3,727 | 3,719 |
Amounts deposited by users | 51,412 | 49,849 | 45,745 |
Content fees | 199 | 352 | 3,080 |
Others | 14,195 | 14,393 | 7,827 |
Prepaid expenses and other current assets | $ 944,044 | $ 587,293 | $ 296,757 |
Other Balance Sheet Component_4
Other Balance Sheet Components - Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Property and equipment, net: | |||
Property and equipment, gross | $ 200,212 | $ 189,290 | $ 179,545 |
Accumulated depreciation | (135,816) | (128,257) | (118,913) |
Property and equipment, net | 64,396 | 61,033 | 60,632 |
Computers and equipment | |||
Property and equipment, net: | |||
Property and equipment, gross | 183,829 | 173,498 | 165,880 |
Leasehold improvements | |||
Property and equipment, net: | |||
Property and equipment, gross | 6,923 | 6,924 | 6,429 |
Furniture and fixtures | |||
Property and equipment, net: | |||
Property and equipment, gross | 2,310 | 2,437 | 2,159 |
Other | |||
Property and equipment, net: | |||
Property and equipment, gross | $ 7,150 | $ 6,431 | $ 5,077 |
Other Balance Sheet Component_5
Other Balance Sheet Components - Other non-current assets (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Other non-current assets | |||
Investment related deposits | $ 410,741 | $ 408,432 | $ 15,450 |
Prepayment for purchase of SINA Plaza(2) | 131,859 | 131,636 | 0 |
Deferred tax assets | 27,325 | 27,279 | 27,020 |
Others | 7,702 | 14,998 | 2,126 |
Other non-current assets | 577,627 | 582,345 | $ 44,596 |
A micro loan company | |||
Other non-current assets | |||
Investment related deposits | 76,800 | 76,700 | |
An insurance company | |||
Other non-current assets | |||
Investment related deposits | 79,100 | 79,000 | |
A game company | |||
Other non-current assets | |||
Investment related deposits | $ 223,900 | $ 221,900 |
Other Balance Sheet Component_6
Other Balance Sheet Components - Accrued and other Liabilities (Details) - USD ($) | 6 Months Ended | 9 Months Ended | 12 Months Ended |
Jun. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Accrued and other liabilities: | |||
Payroll and welfare | $ 138,603,000 | $ 177,235,000 | $ 126,023,000 |
Marketing expenses | 79,173,000 | 77,339,000 | 59,410,000 |
Sales rebates | 312,418,000 | 296,560,000 | 222,064,000 |
Professional fees | 7,431,000 | 7,482,000 | 3,880,000 |
VAT and other tax payable | 54,744,000 | 57,339,000 | 49,971,000 |
Amounts due to users | 49,849,000 | 51,412,000 | 45,745,000 |
Unpaid consideration for acquisition | 0 | 6,205,000 | 10,280,000 |
Unpaid consideration for investment | 434,000 | 434,000 | 19,257,000 |
Prepayment received for sale of an investee | 12,410,000 | 0 | |
Interest payable for convertible debt and unsecured senior notes | 27,579,000 | 17,063,000 | 923,000 |
Others | 22,159,000 | 29,040,000 | 19,200,000 |
Total accrued and other liabilities | 692,390,000 | 732,519,000 | 556,753,000 |
Prepayment for purchase of SINA Plaza | 131,636,000 | 131,859,000 | 0 |
Impairment charges on investment prepayments | $ 0 | $ 0 | $ 1,500,000 |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | Jan. 01, 2015 | Jun. 30, 2021USD ($)jurisdiction | Jun. 30, 2020USD ($) | Sep. 30, 2021USD ($)jurisdiction | Sep. 30, 2020USD ($) | Dec. 31, 2021 | Dec. 31, 2020USD ($) | Dec. 31, 2019HKD ($) | Dec. 31, 2018 |
Income taxes | |||||||||
Number of taxable jurisdictions | jurisdiction | 2 | 2 | |||||||
Components of income before income taxes | |||||||||
Income before income tax expenses | $ 191,805,000 | $ 306,631,000 | $ 405,011,000 | $ 370,109,000 | |||||
Less: Income (Loss) from non-China operations | (163,411,000) | 79,717,000 | (198,398,000) | 64,479,000 | |||||
Income from China operations | 355,216,000 | 226,914,000 | 603,409,000 | 305,630,000 | |||||
Income tax expense (benefits) | $ 61,855,000 | $ 56,627,000 | $ 93,260,000 | $ 86,630,000 | |||||
Effective tax rate for China operations (as a percent) | 18.60% | 19.10% | 17.10% | 24.30% | |||||
Period of income tax exemption | 5 years | ||||||||
HNTE status review period | 3 years | 3 years | |||||||
Composition of income tax expenses for China operations | |||||||||
Deferred tax provisions (benefits) | $ (5,061,000) | $ 12,745,000 | $ (11,546,000) | $ 11,682,000 | |||||
Current income tax expenses | 66,916,000 | 43,882,000 | 104,806,000 | 74,948,000 | |||||
Income tax expenses | 61,855,000 | 56,627,000 | 93,260,000 | 86,630,000 | |||||
Deferred tax assets: | |||||||||
Net operating loss carry forwards | 8,976,000 | 8,991,000 | $ 8,872,000 | ||||||
Valuation allowance | (8,976,000) | (8,991,000) | (8,872,000) | ||||||
Depreciation, investment-related impairment, accounts receivable, accrued and other liabilities | 109,154,000 | 109,338,000 | 107,892,000 | ||||||
Valuation allowance | (81,875,000) | (82,013,000) | (80,872,000) | ||||||
Net deferred tax assets (included in other non-current assets) | 27,279,000 | 27,325,000 | 27,020,000 | ||||||
Deferred tax liabilities: | |||||||||
Acquired intangible assets | 32,652,000 | 36,768,000 | 30,999,000 | ||||||
Depreciation | 1,452,000 | 1,454,000 | 1,435,000 | ||||||
Investment gain | 21,571,000 | 15,857,000 | 25,496,000 | ||||||
Others | 373,000 | 374,000 | 369,000 | ||||||
Total deferred tax liabilities | 56,048,000 | 54,453,000 | 58,299,000 | ||||||
Valuation allowance on deferred tax assets | 90,900,000 | 91,000,000 | 89,700,000 | ||||||
Interest and penalties related to uncertain tax positions | 0 | 0 | $ 0 | ||||||
Liability related to uncertain tax positions expected to be recognized | 27,900,000 | 27,900,000 | |||||||
Non-China | |||||||||
Components of income before income taxes | |||||||||
Income tax expense (benefits) | (4,275,000) | 13,296,000 | (9,757,000) | 12,358,000 | |||||
Deferred tax charge (reverse) from fair value change of investments | (4,300,000) | 13,300,000 | (9,800,000) | 12,400,000 | |||||
Composition of income tax expenses for China operations | |||||||||
Income tax expenses | $ (4,275,000) | 13,296,000 | $ (9,757,000) | 12,358,000 | |||||
Cayman Islands | |||||||||
Components of income 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 income before income taxes | |||||||||
Withholding profits earned | $ 2 | ||||||||
Income tax rate (as a percent) | 16.50% | 16.50% | 16.50% | 16.50% | 16.50% | ||||
Withholding income tax rate for dividend paid to foreign tax resident investors (as a percentage) | 8.25% | ||||||||
China Contribution Plan | |||||||||
Components of income before income taxes | |||||||||
Income tax expense (benefits) | $ 66,130,000 | 43,331,000 | $ 103,017,000 | 74,272,000 | |||||
Withholding income tax on dividends distributed by subsidiaries to its immediate holding entity outside China (as a percent) | 10.00% | 10.00% | |||||||
Income tax rate (as a percent) | 25.00% | 25.00% | |||||||
Maximum percentage of withholding income tax on dividends distributed by subsidiaries to its immediate holding entity in Hong Kong | 5.00% | 5.00% | |||||||
Percentage of ownership interests held by foreign investors | 25.00% | 25.00% | |||||||
Percentage of withholding income tax on dividends distributed by PRC subsidiaries to its immediate holding company in Hong Kong | 5.00% | 5.00% | |||||||
Composition of income tax expenses for China operations | |||||||||
Income tax expenses | $ 66,130,000 | $ 43,331,000 | $ 103,017,000 | $ 74,272,000 | |||||
Deferred tax liabilities: | |||||||||
Historical rate for valuing deferred tax assets (as a percent) | 25.00% | 25.00% | |||||||
China Contribution Plan | High and New Technology Enterprises | |||||||||
Components of income before income taxes | |||||||||
Preferential statutory rate (as a percent) | 15.00% | 15.00% | 15.00% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 6 Months Ended | 9 Months Ended | 12 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Related party transactions | |||||
Costs and expenses allocated from SINA(2) | $ 18,603,000 | $ 23,129,000 | $ 28,796,000 | $ 29,126,000 | |
Related party outstanding balance: | |||||
Amount due from SINA (Note 10) | 498,618,000 | 515,534,000 | $ 548,900,000 | ||
Loans to and interest receivable | 336,558,000 | 283,904,000 | 158,622,000 | ||
Impairment charges on loans to and interest receivable from other related parties | $ 0 | $ 50,200,000 | |||
Accounts receivable due from other related parties | 41,000,000 | 42,500,000 | |||
Accounts payable due to other related parties | 28,700,000 | 30,800,000 | |||
Accrued and other liabilities due to other related parties | $ 5,400,000 | 4,800,000 | |||
impairment charges on loans to and interest receivable from other related parties | 82,200,000 | ||||
SINA (Note 10) | |||||
Related party transactions | |||||
Loan agreement term | 1 year | 1 year | 1 year | 1 year | |
Loan to SINA | $ 310,923,000 | $ 188,194,000 | $ 481,215,000 | $ 443,637,000 | |
Loan repaid by SINA | 388,354,000 | 146,697,000 | 547,660,000 | 146,697,000 | |
Revenue billed through SINA | 24,586,000 | 23,712,000 | 46,374,000 | 29,233,000 | |
Revenue from services provided to SINA | 11,707,000 | 11,534,000 | 21,199,000 | 15,541,000 | |
Total revenues | 36,293,000 | 35,246,000 | 67,573,000 | 44,774,000 | |
Costs and expenses allocated from SINA(2) | 18,603,000 | 23,129,000 | 28,796,000 | 29,126,000 | |
Interest income on loans to SINA | 9,995,000 | 4,936,000 | 13,985,000 | 8,647,000 | |
Other costs and expenses billed by SINA | 21,900,000 | 20,100,000 | 35,500,000 | 32,900,000 | |
Costs and expenses paid by Weibo on behalf of SINA and allocated | 1,500,000 | 3,000,000 | 2,200,000 | 5,700,000 | |
Related party outstanding balance: | |||||
Amount due from SINA (Note 10) | 498,618,000 | 515,534,000 | 548,900,000 | ||
Loans to and interest receivable | 480,700,000 | 487,900,000 | 547,900,000 | ||
Alibaba (Note 10) | |||||
Related party transactions | |||||
Services provided by Alibaba | 21,504,000 | 26,400,000 | 33,462,000 | 39,634,000 | |
Related party outstanding balance: | |||||
Accounts receivable due from related parties | 122,991,000 | 98,262,000 | 135,321,000 | ||
Alibaba (Note 10) | Advertiser | |||||
Related party transactions | |||||
Total revenues | 73,266,000 | 63,313,000 | |||
Related party outstanding balance: | |||||
Accounts receivable due from related parties | 122,991,000 | 135,321,000 | |||
Alibaba (Note 10) | Agent | |||||
Related party transactions | |||||
Total revenues | 36,652,000 | 9,229,000 | |||
Company A | |||||
Related party outstanding balance: | |||||
Loans to and interest receivable | 18,546,000 | 79,762,000 | |||
Company B | |||||
Related party outstanding balance: | |||||
Loans to and interest receivable | 15,056,000 | 15,082,000 | 21,771,000 | ||
Company C | |||||
Related party outstanding balance: | |||||
Loans to and interest receivable | 270,898,000 | 231,304,000 | 41,205,000 | ||
Other related parties (Note 10) | |||||
Related party transactions | |||||
Total revenues | 22,700,000 | 18,000,000 | |||
Related party outstanding balance: | |||||
Accounts receivable due from related parties | 40,972,000 | 41,165,000 | 42,530,000 | ||
Loans to and interest receivable | 32,058,000 | 37,518,000 | 15,884,000 | ||
Other revenues generated from related parties | 900,000 | 900,000 | 1,700,000 | 1,800,000 | |
Cost and expenses recognized from transactions with other related parties | $ 20,200,000 | 16,700,000 | 29,100,000 | 30,100,000 | |
Accounts payable due to other related parties | 19,700,000 | 30,800,000 | |||
Accrued and other liabilities due to other related parties | $ 6,300,000 | $ 4,800,000 | |||
Minimum | SINA (Note 10) | |||||
Related party outstanding balance: | |||||
Annual interest rate | 1.00% | 1.00% | |||
Minimum | Company B | |||||
Related party outstanding balance: | |||||
Annual interest rate | 3.50% | 3.50% | |||
Maximum | SINA (Note 10) | |||||
Related party outstanding balance: | |||||
Annual interest rate | 4.50% | 4.50% | |||
Maximum | Company B | |||||
Related party outstanding balance: | |||||
Annual interest rate | 10.00% | 10.00% | |||
Advertising and marketing revenues | SINA (Note 10) | |||||
Related party transactions | |||||
Total revenues | $ 30,931,000 | 27,624,000 | $ 58,178,000 | 34,149,000 | |
Advertising and marketing revenues | Alibaba (Note 10) | Advertiser | |||||
Related party transactions | |||||
Total revenues | 94,068,000 | 92,468,000 | |||
Advertising and marketing revenues | Alibaba (Note 10) | Agent | |||||
Related party transactions | |||||
Total revenues | 40,824,000 | 20,438,000 | |||
Advertising and marketing revenues | Other related parties (Note 10) | |||||
Related party transactions | |||||
Total revenues | 38,700,000 | 33,400,000 | |||
Value-added services revenues | SINA (Note 10) | |||||
Related party transactions | |||||
Total revenues | $ 9,395,000 | $ 10,625,000 | |||
Other revenues | SINA (Note 10) | |||||
Related party transactions | |||||
Total revenues | $ 5,362,000 | $ 7,622,000 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
China Contribution Plan | ||||
Employee Benefit Plans | ||||
Employer contribution under China Contribution Plan | $ 37.8 | $ 21.4 | $ 58.4 | $ 34.3 |
Net Income per Share (Details)
Net Income per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Numerator: | ||||
Net income attributable to Weibo's shareholders | $ 130,848 | $ 250,524 | $ 312,586 | $ 284,322 |
Denominator: | ||||
Weighted average ordinary shares outstanding (in shares) | 227,936 | 226,535 | 228,185 | 226,728 |
Basic net income per share attributable to Weibo's shareholders (in dollars per share) | $ 0.57 | $ 1.11 | $ 1.37 | $ 1.25 |
Numerator: | ||||
Net income attributable to Weibo's shareholders for calculating diluted net income per share | $ 130,848 | $ 250,524 | $ 312,586 | $ 284,322 |
Denominator: | ||||
Weighted average ordinary shares outstanding (in shares) | 227,936 | 226,535 | 228,185 | 226,728 |
Shares used in computing diluted net income per share attributable to Weibo's shareholders | 229,429 | 227,129 | 229,765 | 227,352 |
Diluted net income per share attributable to Weibo's shareholders | $ 0.57 | $ 1.10 | $ 1.36 | $ 1.25 |
Options and RSUs | ||||
Anti-dilutive share | ||||
Anti-dilutive share excluded from the calculation of diluted net income per share | 100 | 1,000 | 100 | 1,000 |
Denominator: | ||||
Effects of dilutive securities (in shares) | 1,500 | 600 | 1,600 | 600 |
Options | ||||
Denominator: | ||||
Effects of dilutive securities (in shares) | 82 | 76 | 85 | 73 |
Restricted share units | ||||
Denominator: | ||||
Effects of dilutive securities (in shares) | 1,411 | 518 | 1,495 | 551 |
Convertible notes | ||||
Anti-dilutive share | ||||
Anti-dilutive share excluded from the calculation of diluted net income per share | 6,800 | 6,800 | 6,800 | 6,800 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2021USD ($)segment | Jun. 30, 2020USD ($) | Sep. 30, 2021USD ($)segment | Sep. 30, 2020USD ($) | |
Summary information by segment | ||||
Number of principal business segments | segment | 2 | 2 | ||
Revenues | $ 1,033,362 | $ 710,782 | $ 1,640,796 | $ 1,176,521 |
Advertising and marketing revenues | ||||
Summary information by segment | ||||
Revenues | 892,349 | 616,006 | 1,429,969 | 1,032,678 |
Value-added services revenues | ||||
Summary information by segment | ||||
Revenues | $ 141,013 | $ 94,776 | $ 210,827 | $ 143,843 |
Profit Appropriation and Rest_2
Profit Appropriation and Restricted Net Assets (Details) $ in Millions | 6 Months Ended | 9 Months Ended | |
Jun. 30, 2021USD ($)fund | Sep. 30, 2021USD ($)fund | Dec. 31, 2020USD ($) | |
Minimum percentage of after-tax profit transferred by Chinese subsidiaries to general reserve fund | 10.00% | 10.00% | |
Maximum percentage criteria for appropriation of after-tax profit of Chinese subsidiaries to general reserve fund | 50.00% | 50.00% | |
Number of reserve funds except general reserve fund, appropriation at the entity's discretion | fund | 2 | 2 | |
Minimum percentage of after-tax profit transferred by VIEs to statutory reserve fund | 10.00% | 10.00% | |
Maximum percentage criteria for in appropriation of after-tax profit by VIEs to certain statutory reserve funds | 50.00% | 50.00% | |
Reserves made to non-distributable general reserve/statutory surplus funds (in dollars) | $ 127 | $ 127 | $ 127.2 |
Net assets subject to restriction for the Group (in dollars) | $ 450.3 | $ 449.9 | |
Percent of restricted net assets of total consolidated net assets | 14.50% | 13.50% |
Fair Value Measurement - Fair V
Fair Value Measurement - Fair Value Hierarchy (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Jun. 30, 2021 | Dec. 31, 2020 |
Fair Value of Financial Instruments | |||
Bank time deposits | $ 665,983 | $ 750,467 | $ 1,515,880 |
Wealth management products | 212,504 | 180,355 | 166,168 |
Equity securities with readily determinable market value | 420,012 | 241,590 | 289,221 |
Financial instruments measured on a recurring basis | |||
Fair Value of Financial Instruments | |||
Bank time deposits | 665,983 | 750,467 | 1,515,880 |
Wealth management products | 212,504 | 180,355 | 166,168 |
Equity securities with readily determinable market value | 420,012 | 241,590 | 289,221 |
Total | 1,298,499 | 1,172,412 | 1,971,269 |
Financial instruments measured on a recurring basis | Quoted Prices in Active Market for Identical Assets (Level 1) | |||
Fair Value of Financial Instruments | |||
Bank time deposits | 0 | 0 | 0 |
Wealth management products | 0 | 0 | 0 |
Equity securities with readily determinable market value | 420,012 | 241,590 | 289,221 |
Total | 420,012 | 241,590 | 289,221 |
Financial instruments measured on a recurring basis | Significant Other Observable Inputs (Level 2) | |||
Fair Value of Financial Instruments | |||
Bank time deposits | 665,983 | 750,467 | 1,515,880 |
Wealth management products | 212,504 | 180,355 | 166,168 |
Equity securities with readily determinable market value | 0 | 0 | 0 |
Total | 878,487 | 930,822 | 1,682,048 |
Financial instruments measured on a recurring basis | Significant Unobservable Inputs (Level 3) | |||
Fair Value of Financial Instruments | |||
Bank time deposits | 0 | 0 | 0 |
Wealth management products | 0 | 0 | 0 |
Equity securities with readily determinable market value | 0 | 0 | 0 |
Total | $ 0 | $ 0 | $ 0 |
Fair Value Measurement - Non-re
Fair Value Measurement - Non-recurring Basis (Details) - USD ($) | 6 Months Ended | 9 Months Ended | ||
Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Reconciliation of the fair value measurements using significant unobservable inputs | ||||
Impairment charge | $ 66,600,000 | $ 102,600,000 | ||
Impairment charge of goodwill recognized | 0 | $ 0 | ||
Non-recurring | ||||
Reconciliation of the fair value measurements using significant unobservable inputs | ||||
Impairment charge of goodwill recognized | 0 | $ 0 | 0 | 0 |
Significant Unobservable Inputs (Level 3) | Non-recurring | ||||
Reconciliation of the fair value measurements using significant unobservable inputs | ||||
Impairment charge | $ 66,600,000 | $ 2,500,000 | $ 102,600,000 | $ 64,700,000 |
Convertible Debt and Unsecure_2
Convertible Debt and Unsecured Senior Notes (Details) $ / shares in Units, $ in Thousands | 1 Months Ended | 6 Months Ended | 9 Months Ended | ||||
Jul. 31, 2020USD ($) | Jul. 31, 2019USD ($) | Oct. 31, 2017USD ($)$ / shares | Jun. 30, 2021USD ($) | Jun. 30, 2020USD ($) | Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | |
Convertible Debt | |||||||
Proceeds from unsecured senior notes, net of issuance costs | $ 740,324 | ||||||
2030 Notes | |||||||
Convertible Debt | |||||||
Interest expense | $ 19,700 | ||||||
Convertible notes | 2022 Notes | |||||||
Convertible Debt | |||||||
Aggregate principal amount | $ 900,000 | $ 900,000 | $ 900,000 | ||||
Coupon interest (as a percent) | 1.25% | 1.25% | 1.25% | ||||
Due date of the Notes | Nov. 15, 2022 | ||||||
Proceeds from unsecured senior notes, net of issuance costs | $ 879,300 | ||||||
Issuance costs | $ 20,700 | ||||||
Interest expense | $ 7,700 | $ 7,700 | $ 11,500 | 11,500 | |||
Convertible notes | 2022 Notes | Class A ordinary shares | |||||||
Convertible Debt | |||||||
Conversion ratio per ADS | 1 | ||||||
Initial conversion price (in dollars per ADS) | $ / shares | $ 133.27 | ||||||
Unsecured senior notes | 2024 Notes | |||||||
Convertible Debt | |||||||
Aggregate principal amount | $ 800,000 | $ 800,000 | $ 800,000 | ||||
Coupon interest (as a percent) | 3.50% | 3.50% | 3.50% | ||||
Proceeds from unsecured senior notes, net of issuance costs | $ 793,300 | ||||||
Issuance costs | $ 6,700 | ||||||
Interest expense | $ 14,700 | $ 14,700 | $ 22,000 | 22,000 | |||
Unsecured senior notes | 2030 Notes | |||||||
Convertible Debt | |||||||
Aggregate principal amount | $ 750,000 | $ 750,000 | $ 750,000 | ||||
Coupon interest (as a percent) | 3.375% | 3.375% | 3.375% | ||||
Proceeds from unsecured senior notes, net of issuance costs | $ 740,300 | ||||||
Issuance costs | $ 9,700 | ||||||
Interest expense | $ 13,100 | $ 6,100 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) - USD ($) $ in Thousands | 6 Months Ended | 9 Months Ended | |||||
Jun. 30, 2021 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | Jul. 31, 2020 | Jul. 31, 2019 | Oct. 31, 2017 | |
Commitments and Contingencies | |||||||
Lease expense | $ 7,900 | $ 6,000 | $ 12,200 | $ 9,200 | |||
Operating lease commitments as of June 30, 2021 | |||||||
Total future payments for recognized leasing assets | 12,800 | 11,391 | |||||
Less than One Year | 6,020 | 5,001 | |||||
One to Three Years | 3,632 | 3,596 | |||||
Three to Five Years | 2,855 | 2,661 | |||||
More than Five Years | 293 | 133 | |||||
Purchase commitments as of June 30, 2021 | |||||||
Total | 591,545 | 620,620 | |||||
Less than One Year | 561,167 | 588,994 | |||||
One to Three Years | 28,263 | 29,613 | |||||
Three to Five Years | 2,093 | 2,006 | |||||
More than Five Years | 22 | 7 | |||||
Convertible notes | |||||||
Other commitments as of June 30, 2021 | |||||||
Total | 2,805,336 | 2,778,679 | |||||
Less than One Year | 64,563 | 64,562 | |||||
One to Three Years | 1,012,242 | 1,812,242 | |||||
Three to Five Years | 864,625 | 50,625 | |||||
More than Five Years | 863,906 | 851,250 | |||||
Convertible notes | 2022 Notes | |||||||
2022, 2024 and 2030 Notes | |||||||
Aggregate principal amount | $ 900,000 | $ 900,000 | $ 900,000 | ||||
Interest rate (as a percent) | 1.25% | 1.25% | 1.25% | ||||
Other commitments as of June 30, 2021 | |||||||
Total | $ 916,867 | $ 916,867 | |||||
Less than One Year | 11,250 | 11,250 | |||||
One to Three Years | 905,617 | 905,617 | |||||
Three to Five Years | 0 | 0 | |||||
More than Five Years | 0 | 0 | |||||
Convertible notes | 2024 Notes | |||||||
Other commitments as of June 30, 2021 | |||||||
Total | 898,000 | 884,000 | |||||
Less than One Year | 28,000 | 28,000 | |||||
One to Three Years | 56,000 | 856,000 | |||||
Three to Five Years | 814,000 | 0 | |||||
More than Five Years | 0 | 0 | |||||
Convertible notes | 2030 Notes | |||||||
Other commitments as of June 30, 2021 | |||||||
Total | 990,469 | 977,812 | |||||
Less than One Year | 25,313 | 25,312 | |||||
One to Three Years | 50,625 | 50,625 | |||||
Three to Five Years | 50,625 | 50,625 | |||||
More than Five Years | 863,906 | 851,250 | |||||
Unsecured senior notes | 2024 Notes | |||||||
2022, 2024 and 2030 Notes | |||||||
Aggregate principal amount | $ 800,000 | $ 800,000 | $ 800,000 | ||||
Interest rate (as a percent) | 3.50% | 3.50% | 3.50% | ||||
Unsecured senior notes | 2030 Notes | |||||||
2022, 2024 and 2030 Notes | |||||||
Aggregate principal amount | $ 750,000 | $ 750,000 | $ 750,000 | ||||
Interest rate (as a percent) | 3.375% | 3.375% | 3.375% |
Redeemable Non-controlling In_2
Redeemable Non-controlling Interests (Details) - USD ($) | 6 Months Ended | 9 Months Ended | |||
Jun. 30, 2021 | Dec. 31, 2020 | Jun. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Mezzanine adjustment recognized | $ 0 | $ 0 | |||
Compensation costs recognized | $ 36,221,000 | $ 30,188,000 | 61,258,000 | $ 47,785,000 | |
Redeemable non-controlling interest increased | $ 2,341,000 | $ 2,792,000 | |||
JM Tech | |||||
Term for employment required by founders to be entitled to their proportionate share in existing and future retained earnings | 2 years | 2 years | |||
Compensation costs recognized | $ 13,300,000 | $ 18,400,000 | |||
Redeemable non-controlling interest increased | $ 10,900,000 | $ 15,600,000 |