This article first appeared on GuruFocus .
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Total Net Revenues:USD453.8 million, an increase of 2% year over year (or a decrease of 4% on a constant currency basis).
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Advertising and Marketing Revenues:USD381 million, a decrease of 1% year over year (or 6% on a constant currency basis).
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Value-Added Services (VAS) Revenues:USD72.9 million, an increase of 19% year over year (or 12% on a constant currency basis).
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Non-GAAP Operating Income:USD125.4 million, representing a non-GAAP operating margin of 28% (compared to 36% in the same period last year).
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Net Income Attributable to Weibo:USD102.7 million, representing a net margin of 23%.
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Diluted EPS:USD0.38.
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Monthly Active Users (MAUs):561 million in June 2026.
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Daily Active Users (DAUs):254 million in June 2026.
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Ad Revenue from Alibaba:USD39.2 million, an increase of 10% year over year (or 50% on a constant currency basis).
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Total Cost and Expenses:USD328.4 million, an increase of 16% year over year.
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Cash, Cash Equivalents and Short-term Investments:USD2.64 billion as of June 30, 2026.
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Cash Provided by Operating Activities:USD15.5 million in the second quarter.
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Capital Expenditures:USD3.1 million.
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Depreciation and Amortization Expenses:USD15.7 million.
Release Date: August 19, 2026
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
Positive Points
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Total revenue increased 2% year over year to USD453.8 million, with VAS revenue up 19%.
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Advertising revenue from automobile, internet services, and food and beverage sectors saw solid year-over-year growth.
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Video consumption improved, with total time spent on video views growing double digits year over year and average time per user increasing even more.
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AI integration in advertising improved eCPM and reduced negative feedback rates by over 30% for AI-optimized e-commerce creatives.
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Super Topics daily active users and discussion participants grew double digits year over year, driven by new features and AI-enhanced content generation.
Negative Points
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Advertising revenue decreased 1% year over year due to consumption market headwinds and tightened advertiser budgets.
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DAU base declined slightly year over year in June, impacted by channel budget rationalization and low-frequency user adaptation to feed changes.
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Operating margin fell to 28% from 36% year over year, due to higher ad production costs and marketing expenses.
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Third-quarter advertising revenue growth is expected to face pressure from a high base due to last year's food delivery price war and lower World Cup ad contributions.
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Handset sector ad revenue declined due to soft demand and rising component costs, while e-commerce and cosmetics verticals also faced headwinds.
Q & A Highlights
Q: What is the outlook for Advertising revenue in the second half of 2026, and what are the trends across different verticals? How has AI impacted eCPM and other advertising metrics? A: CEO Gaofei Wang stated that the second half outlook is uncertain. While the automobile sector should maintain its growth momentum due to new energy vehicle launches, the internet/software sector is expected to be flat. The handset sector remains under pressure, with a cautious view on Q3. The company has low expectations for e-commerce and food delivery due to the high base from last year's price war and the government's anti-involution policies. On AI, Wang noted that while eCPM is increasing quarter-over-quarter, it does not necessarily translate to overall revenue growth due to past ad product restructuring. The key focus for brand advertising is improving the sales rate of core resources, with a strategic push into celebrity and KOL-based marketing to capture budgets from mid-sized advertisers.
Q: Can you provide an update on user growth and engagement trends, including content consumption, time spent, and usage frequency? What is the latest progress on video strategy and AI initiatives? A: CEO Gaofei Wang explained that while core user time spent and interactivity are improving, low-frequency user retention remains a challenge due to two factors: a 10% impact from lower handset shipments with pre-installed Weibo apps, and the shift to a recommendation-based feed which makes it harder to attract low-frequency users compared to peers. On video, the company is seeing double-digit growth in time spent and is successfully attracting video creators, with around 10,000 new accounts and a 70% retention rate. The ROI on creator incentives is between 70% and 100%. Regarding AI, Wang highlighted that the intelligent search has seen year-over-year growth, and AI has significantly improved the efficiency of creating "Super Topics," leading to a historical high in user interaction and activity on that feature.
Q: What were the key drivers of the 2% year-over-year revenue growth in Q2 2026, and what is the breakdown of the Advertising and VAS segments? A: CFO Fei Cao reported total Q2 revenue of $453.8 million, up 2% year-over-year. Advertising and Marketing revenue was $381 million, a 1% decrease year-over-year, impacted by softer demand in certain verticals. Value-Added Services (VAS) revenue was $72.9 million, a 19% increase, driven by run-off ticket proceeds from offline activities and solid growth from membership services. The top three ad verticals were FMCG, e-commerce, and automobile, with internet services and automobile being the primary growth contributors.
Q: How did the performance of specific advertising verticals differ in the second quarter? A: CFO Fei Cao noted that the automobile sector delivered solid year-over-year growth, supported by frequent new energy vehicle launches. Internet services also increased, driven by stronger marketing demand for AI-related products. The food and beverage sector benefited from early World Cup-related marketing budgets. Conversely, the handset sector declined due to soft ad demand and rising component costs. The cosmetics vertical remained soft as international brands reduced spend, and game developers remained cautious with their advertising spend.
Q: What was the contribution from Alibaba to advertising revenue in Q2 2026? A: CFO Fei Cao stated that Ad revenues from Alibaba were $39.2 million in the second quarter, an increase of 10% year-over-year (or 50% on a constant currency basis). This increase was primarily due to higher spending on AI-related activities, which more than offset softer spending in local services. Cao reiterated that Alibaba's ad spend on Weibo can vary from quarter to quarter based on its own marketing priorities.
Q: What were the main drivers of the increase in total costs and expenses, and how did this impact operating margin? A: CFO Fei Cao reported that total costs and expenses for Q2 were $328.4 million, an increase of 16% year-over-year. This was mainly due to higher ad production costs and marketing expenses. As a result, non-GAAP operating income was $125.4 million, representing an operating margin of 28%, compared to 36% in the same period last year.
Q: What is the company's strategy for user growth, and why did the DAU base decline slightly year-over-year in June? A: CEO Gaofei Wang explained that the company has proactively rationalized its channel budget allocation, shifting focus from scaling up user acquisition to improving the conversion rate of newly acquired users. Concurrently, the homepage information feed revamp is still being optimized, and some low-frequency users need time to adapt to the changes. As a result, DAUs declined slightly year-over-year in June but remained largely flat quarter-over-quarter. The company is focusing on improving user quality, retention, and deepening engagement.
Q: What are the key focus areas for the advertising product and sales team in the second half of 2026? A: CEO Gaofei Wang stated that the company will focus on strengthening its content marketing products and services by offering more standardized product solutions and convenient advertising tools. This aims to lower the barriers for advertisers in content planning, resource allocation, and information feed placement. A key focus is on celebrity marketing, where Weibo is becoming involved earlier in campaign planning and resource matching to provide more comprehensive services. The goal is to improve the sales rate of core resources and capture more ad budgets.
Q: How is AI being used to improve advertising performance and user experience? A: CEO Gaofei Wang detailed that AI is being applied across key stages of the advertising process, including creative supply, intelligent ad placement, and creative quality management. In Q2, AI-generated ad creatives reached a 50% consumption share in the promoted feed and real-time bidding systems. In the e-commerce sector, AI-optimized materials saw a drop of over 30% in negative feedback rates compared to clients' original materials, effectively enhancing user experience in ad content consumption.
Q: What is the company's expectation for the third quarter of 2026 regarding advertising revenue? A: CEO Gaofei Wang cautioned that the food delivery price war in Q3 of last year created a high revenue base for comparison. Additionally, due to factors such as primary match broadcast times and advertiser dynamics during this year's World Cup, the incremental contribution from related ad budgets is lower than the previous tournament. These factors are expected to put pressure on year-over-year Advertising revenue growth in the third quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript .
