Ladies and gentlemen, thank you for standing by. And welcome to the Weibo Reports First Quarter Financial Results. At this time, all participants are in a listen-only mode. We will be taking questions at the later stage of the call. [Operator Instructions] Now I would like to hand the conference over to your first speaker for the day, Ms. Wel Lee. Over to you ma'am.

Thank you, operator. Welcome to Weibo's 2018 First Quarter Earnings Conference Call. Joining me today are our Chairman of the Board, Charles Chao; our Chief Executive Officer, Gaofei Wang; and our Interim CFO and VP, Finance, Fei Cao. The conference call is also being broadcasted on Internet and is available through Weibo's IR website. Before the management presentation, I'd like to read you the safe harbor statement in connection with today's conference call. During the course of this conference call, we may make forward-looking statements, statements that are not historical facts, including statements about our beliefs and expectations. Forward-looking statements involve inherent risks and uncertainties. A number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Weibo assumes no obligation to update our forward-looking statements in this conference call and elsewhere. Further information regarding those and other risks is included in our Weibo's annual report on Form 20-F and other filings with SEC. All information provided in this press release is current as of the date hereof, and Weibo assumes no obligation to update such information, except as required under applicable law. Additionally, I'd like to remind you that our discussion today includes certain non-GAAP measures, which excludes stock-based compensation and certain other expenses. We use non-GAAP financial measures to gain a better understanding of Weibo's comparative operating performance and the future prospects. Our non-GAAP financial excludes certain expenses, gains or losses and other items that are not expected to result in future cash payments or that are nonrecurring in nature or will not be indicative of our core operating results and outlook. Please refer to our press release for more information about our non-GAAP measures. Following management's prepared remarks, we'll open the lines for a brief Q&A session. With this, I would like to turn the call over to our Chief Executive Officer, Gaofei Wang.

[Foreign Language] Thank you. Hello, everyone, and welcome to Weibo's First Quarter 2018 Earnings Call. [Foreign Language] On today's call, I will share with you highlights in Weibo's user growth, product and monetization, as well as our key initiatives in 2018. [Foreign Language] But first, let me discuss our first quarter financial results. We continued to see strong revenue and the user growth this quarter. Our total revenue in the first quarter reached $349.9 million, up 76% year-over-year. Advertising and marketing revenue reached $302.9 million, up 79% year-over-year, with 80% of our ad revenue in Q1 from mobile. Value-added services revenue in the first quarter was $46.9 million, up 57% year-over-year. [Foreign Language] Moving on to the user front, Weibo's monthly active users reached 411 million in March, up 20.7% year-over-year. Average daily active users in March reached 184 million, up 19.5% year-over-year. In March, 93% of Weibo's MAUs were from mobile. [Foreign Language] Leveraging the Chinese New Year holiday, we considerably increased our investment activities in user growth and engagement through our cooperation with CCTV's Chinese New Year Gala and a series of platform-wide marketing campaigns and events, such as the red envelope giveaway. On the monetization front, our customers continued to increase their ad spending on Weibo, much to the credit of our sales force. Our key accounts ARPA in Q1 reached a historical high. The persistent growth in Weibo's user base and the business demand for social marketing further solidifies Weibo's leading position among brand advertisers. [Foreign Language] In discussing our operational updates for the first quarter, I will cover Weibo's progress in the area of user content and customer. [Foreign Language] As we saw in the first quarter, the period around the Chinese New Year presents an opportunity for Weibo to accelerate its user growth and…

Thank you, Gaofei. [indiscernible] Welcome to Weibo's First Quarter 2018 Earnings Call. As a specific note, since January 2018, we adopted new revenue guidance, ASC 606, using modified retrospective method. Under the new accounting standard, we are very proud to report our revenue in that basis and to adjust for advertising barter transactions. However, our historical operating results were not adjusted. In order to provide investor with more meaningful comparisons and also indicate our revenue or expense figures under the old basis, which excludes barter transactions and adds back value ad impact to recorded figures included in our earnings release. Now, let me go through our financial highlights. For the first quarter, Weibo's net revenue reached $349.9 million, up 76% year-over-year, or up 81% year-over-year under the old basis, exceeding the previous guidance. Non-GAAP operating income is $120.6 million, up 81% year-over-year. Non-GAAP net income attributable to Weibo was $112.6 million, up 95% year-over-year. Non-GAAP diluted EPS was $0.50 compared to $0.26 a year ago. Advertising and the marketing revenue for the first quarter reached $302.9 million, up 79% year-over-year, or up 83% year-over-year under the old basis. Even though the first quarter is a typical slow quarter for the year, we managed to add in total advertisers by 10% year-over-year and large brand advertisers by 45% comparing a year ago. Mobile ad revenue in the first quarter was $243.3 million, up 105% year-over-year, representing 18% of our total ad revenue. As a China's leading social media platform, Weibo is continuing to benefit from the secular ad partnership in China for the mobile, social and video. As such, given our unique position in the social media industry, Weibo continues to capitalize on rapid growth of the mobile advertising market in China with 93% of mobile MAUs in March. Moving on…

[Operator Instructions] The first question comes from the line of Alicia Yap from Citigroup.

My first question is a little bit on the first, sorry, the second quarter guidance. Just wanted to know on the like-for-like growth rate. We are using the old basis of this ASC 605, what would be the growth rate looks like? In other words, what is the barter transaction ratio in the second quarter last year? That's the first question. And then second question is related to some of the key growth driver for this year. Will that be driven more by ad load, or will that be the pricing increase for revenue? And what would be Weibo estimated social ad market share today versus, let's say, a year ago? And given some regulatory impact on some of the competing apps, recently have you seen any additions of the [new ad budget] demand going for Weibo?

[Foreign Language] Alicia, this is [indiscernible] I'm going to take your very first question. I think the -- at this point, it will be very hard for us to give a clear picture in terms of the impact on the new accounting guidance revenue. In the midst of a quarter, we will have very little visibility in terms of the barter transaction level for the quarter. So that number virtually has to be determined by the end of the quarter, depending how much inventory consumed or allocated by barter transaction. As a result, what we see today, which indicated in the guidance, is what we expected total revenue level we tend to recognize for the second quarter. So I would not be able to break out the total revenue into different pieces, meaning the cash revenue versus the barter transactions. [Foreign Language] We realize that the market for user growth has been somewhat saturated, or tend to go into a slower pace. However, we were able to deliver a relative healthy user growth trend in the first quarter. [Foreign Language] The first quarter ad load has been relatively stable compared to the previous quarter with our traffic growth continued to be seen in the interest-based feed and the video feed. We think we still have some potential in terms to increase the ad load down the road. In particular, our ad load -- the level in -- the ad load level in the video feed is only about 50% compared to other main feeds that host the -- host our normal feeds. [Foreign Language] From a pricing perspective, the -- for the first quarter, we do raise our CPM price average 10% to 20%, depending on the inventory spot. Our current CPM level in the marketplace, we believe, still have…

[Foreign Language] I think we are aware of that. It is the determined trend and not only happening in China but also overseas. There will be more and more regulatory activities towards Internet company. As I indicated in the -- in my script that during the Two Sessions period, we tend to provide more mainstream contents on the platform so that we are more -- we are more readily adjusted to the current regulatory environment. [Foreign Language] We've seen our -- Weibo has been working with government on Internet regulation for the last -- for more than a decade. As a result, we believe we have more experience in working with the government with -- in terms of the regulatory changes. The overall supervision of Weibo and WeChat by the government tend to be much more mature from a government point of view. As a result, we believe we do -- we're more, I won't say comfortable, but we are more experienced in terms of [within] the government under the current regulatory changes.

The next question comes from the line of Gregory Zhao from Barclays.

I have several follow-up questions. The first one is still about the overall online advertising market in China, you can share with us your view about the overall -- the demand for both social and news feed advertising. And is there any way to quantify, I mean, the impact to the advertisers, advertising budget allocation to social and the news feed? And the second question is about a new advertising system, which was launched second half last year. So would you please help us -- share some recent update of the system and how this is going to help to improve your monetization in 2018. And the last one is a quick question about your user growth. So can you help us -- give us update your 2018 MAU growth outlook? So shall we expect for MAU net ads to be similar to last year?

[Foreign Language] Like I indicated earlier, there is a very clear increase of demand for social ads. [Foreign Language] In terms of SME for this year, we see it's clear there will be more pressure in terms of competition. Like I indicated earlier that we will -- working on the ad load potentially to increase the ad load for the video feed will open more inventory to meet the demand for the SME customers. [Foreign Language] In terms of Super FenSiTong system, the important character for this new system is converged or [indiscernible] our main feeds, which was separately bidding in the past into one gigantic system. And another factor is that now we are combined or converged our SME bidding along with our key accounts bidding. So in the longer term, we believe this new system will increase our efficiency in terms of our bidding process. [Foreign Language] I think in the second half of last year, among the SMEs bidding on the system that includes e-commerce, which for the -- they are the peak season and the O2O and the gaming. However, for the first quarter, it's a typical slow season for the e-commerce and also there is downward activity for gaming, and as well as O2O. As a result, our ECPM price increase was not that substantial on a sequential basis. [Foreign Language] In terms of the growth in gross MAU for this year, we feel pressured with the growth in result of these slower shipments of mobile -- the slower pace in the mobile phone shipments. We had a step-up our cooperation with handset manufacturers in this year by 30% or 40%, and more handsets will be installed. However, the shipments has obviously been slow in the first quarter. [Foreign Language] We also noted, in the first quarter, the video app -- the short video app had explosive growth rate, which had some negative impact for other growth in the -- for other app growth. [Foreign Language] So the pressure from the growth on short video app, it's particularly obvious on the DAU growth and as well as the growth rate on the time spent. From a MAU perspective, I think that pressure is more coming from the slower market -- slower growth in the mobile user in the market. As a result, we'll be increasing our budgets in the installations as well as to increasing the engagement activity for our current users.

Now I'd like to hand the conference to the speakers for any closing remarks.

That concludes today's conference call. Thank you for joining us, everyone.