Good day, and thank you for standing by. Welcome to Weibo Fourth Quarter and Fiscal Year 2022 Financial Results Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. Now I'd like to hand the conference over to Ms. Sandra Zhang from Weibo IR team. Please go ahead, ma'am.

Thank you, operator. Welcome to Weibo's fourth quarter and fiscal year 2022 earnings conference call. Joining me today are our Chief Executive Officer, Gaofei Wang; and our Chief Financial Officer, Fei Cao. The conference call is also being broadcast on the Internet and is available through Weibo's IR website. Before the management remarks, I would like to read you the safe harbor statement in connection with today's conference call. During today's conference call, we may make forward-looking statements, statements that are not historical facts, including statements of 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 statements. Weibo assumes no obligation to update the forward-looking statements in this conference call and elsewhere. Further information regarding this and other risks is included in Weibo's annual report on Form 20-F and other filings with the SEC. All the information provided in this press release is occurring as of the date hereof. Weibo assumes no obligation to update such information, except as required under applicable law. Additionally, I would like to remind you that our discussion today includes certain non-GAAP measures, which excludes stock-based compensation and certain other expenses. We use non-GAAP financial measures to gain a better understanding of Weibo's comparative operating performance and the future prospects. Our non-GAAP financials exclude certain expenses, gains or losses and other items that are not expected to result in future cash payment or are non-recurring in nature or are not indicative of our core operating results and outlook. Please refer to our press release for more information about our non-GAAP measures. Following management's prepared remarks, we will open the lines for a brief Q&A session. With this, I would like to turn the call over to our CEO, Gaofei Wang.

[Foreign Language] [Interpreted] Thank you. Hello, everyone, and welcome to Weibo's fourth quarter and full-year 2022 earnings conference call. On today's call, I'll share with you highlights on Weibo's user product monetization, review the progress made in 2022 and elaborate our strategies for 2023. Let me start with our fourth quarter financial results. In the [fourth] (ph) quarter, our total revenue reached $448 million, a decrease of 27% year-over-year or a decrease of 1% quarter-over-quarter as marketing activities on Weibo was largely impacted by the COVID factor, as well as other major affair. In the mid-term, our total revenue decreased 20% year-over-year and remained flattish quarter-over-quarter. Advertising and marketing revenues reached $390.5 million, with 94% of our revenue coming from mobile, leveraging solid execution of our cost optimization initiatives. Our non-GAAP operating income reached $152 million, representing a non-GAAP operating margin of 34%. Meanwhile, non-GAAP net income attributable to Weibo reached $178.5 million, up 50% quarter-over-quarter, representing a non-GAAP net margin of 40%. For full-year 2022, Weibo's total revenue reached $1.84 billion, a decrease of 19% year-over-year or a decrease of 15% year-over-year in renminbi terms. Advertising and marketing revenue were $1.6 billion, a decrease of 19% year-over-year or a decrease of 16% in the mid-term. Our non-GAAP operating income reached $601.1 million, representing a non-GAAP operating margin of 33%, mainly attributable to our strategic focus on improving operating efficiency since Q2 last year. On the user front, in December 2022, Weibo's MAUs reached 586 million, a net addition of approximately 13 million users on a year-over-year basis. Average DAUs reached 252 million, a net addition of approximately 3 million users on a year-over-year basis. In December, 95% of Weibo's MAUs came from mobile. Looking back to 2022, due to negative impact from macro environment and the COVID factor, the…

Thank you, Gaofei, and hello, everyone. Welcome to Weibo's fourth quarter and fiscal year 2022 earnings conference call. Let's start with user metrics. In December 2022, Weibo's MAUs and average DAUs reached 586 million and 252 million, respectively, representing a net addition of 13 million and 3 million users on a year-on-year basis in 2022. Our user community and engagement remained healthy, despite that we executed well a disciplined channel investment strategy with a 21% cut in sales and marketing expenses versus 2021. Turning to financials. As a reminder, my prepared remarks would focus on non-GAAP results. All monetary amounts are in U.S. dollar terms and all the comparisons are on a year-over-year basis, unless otherwise noted. Now let me walk you through our financial highlights for the fourth quarter and fiscal year 2022. Weibo's fourth quarter 2022 net revenues were $448 million, a decrease of 27% or 20% on a constant currency basis. Operating income was $152 million, representing operating margin of 34%. Net income attributable to Weibo reached $178.5 million, representing a net margin of 40%. Diluted EPS was $0.75, compared to $0.83 last year. For full-year 2022, total revenues reached $1.84 billion, a decrease of 19% or 15% on a constant currency basis. Operating income was $601.1 million, representing operating margin of 33%. Net income attributable to Weibo reached $540.1 million, representing a net margin of 29%. Diluted EPS was $2.27, compared to $3.08 in 2021. Let me give you more color on the fourth quarter and full-year 2022 revenue performance. Weibo's advertising and marketing revenues for the fourth quarter 2022 were $390.5 million, a decrease of 29% or 22% on a constant currency basis, reflecting the disruption from COVID resurgence and the volatile advertising market amid reopening. Mobile ad revenues were $367 million, contributing approximately 94%…

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Our first question comes from the line of Timothy Zhao from Goldman Sachs. Please ask your question, Timothy.

[Foreign Language] Thank you, management for taking my question. I have two questions. First, can management please share with us more detailed color around the monthly trend of ad revenue recovery and year-on-year growth trend from first quarter last year to January and February this year? And how the recovery path differs across various industries? And secondly, on the monetization plan for the new year, is there any new ad product or monetization model that we may launch for this year? Thank you.

[Foreign Language] [Interpreted] Okay. Thank you for the question. Let me answer the first one first. So first of all, in last Q4, especially in October and also in December of last year, we've been having some of the political issues happening. And also from December to January of last year -- of this year, also, we had the COVID ramping and also infections here in Shanghai and Beijing very quickly. So that is to say that in December of last year, we've been having a negative impact on our operations and also some of the negative impact, due to the lower budget allocated by our customers. But we were never having a big impact from the World Cup preparation and also operations, because of the closed-loop preparation of that World Cup itself as an event. So overall speaking, last year Q4, we had some of the missing and also some of the negative impact on the overall business due to a lot of accidents and also a lot of issues happening in December of last year, okay. Got it. And also in January and also February of this year, in January, we had the Chinese New Year, and also, of course, from the standpoint of traffic, we had actually a lot of growth on that. But still, if you're talking about the advertisement businesses, we do not have a very good comparison if you're talking about the year-on-year basis. And also, of course, if you're talking about quarter-on-quarter, and definitely speaking, we had increase, but that was not an appropriate and legitimate comparison. And also, second point is that in February, we had the recovery, but the thing is that if you're talking about the budget given by the customers, while they were doing the marketing plan for Q1,…

Thank you. Our next question comes from the line of Felix Liu from UBS. Please ask your questions, Felix.

[Foreign Language] Let me translate myself. Thank you, management for taking my question. My question is on the efficient improvement and cost control that we have done very well in 2022. So, looking ahead into 2023, what are our plans on efficient improvement and cost control? Is there any pace or trends that we can expect on the investment side? Thank you.

[Foreign Language] [Interpreted] Got it. So, for this particular question, first of all, in 2022, we had already had the impact from COVID starting from the end of Q1 and also continued when time passes by from Q2. So, we started to actually reduce the cost and improve our efficiency starting from then. So, in 2022, the overall cost has been actually reduced by more than 10% versus 2021. And also, of course, this year, the major way for us to further improve the efficiency and also reduce the cost is by further reducing the marketing-related expenses by as many as 20%. And also, in Q4, at the end of Q4, we started to actually do the reorganization structure of the company, and this is going to generate impact since 2023. So that is to say that from this year onwards, we're going to really continue focusing on the core businesses and also really have a very flexible financial and also accounting performance and also really have a very sustainable competitive edge of being built continuously, okay. Got it. And also in 2023, our key focus will still be on the further recovery of revenue and also the traffic, as well and also further increase our operational efficiency. So, as I have already said that we've been starting doing the reorganization or restructuring of our organization since the end of Q4. And this had a little bit of impact and especially positive ones on our profit and profit margin, but it is going to generate a higher impact in 2023 with regards to the profit and margin. And also, before 2021, we had the total operational cost, which was around like 60% of our total revenue. And this particular figure has been increasing to around 65% up in 2021, due to the impact of COVID. And also, in 2022 because of some other issues today with COVID, we had this particular operational cost as high as 70% in some occasions over some of the months and quarters. But in 2023, our focus is that we want to regain our operational efficiency and also would like to have the operational efficiency recovered to the approximate level and appropriate level, which was about the level of 2019 or 2020. This has continued going to be our goal and objective. And also, of course, that we really wanted to realize the enhancement of the operational efficiency on top of the recovery of our traffic and also the revenue as well. This is going to be the objective for our company in 2023 and onwards, okay.

Thank you. In the interest of time, I would like to take our last question from Xueqing Zhang from CICC. Please go ahead, Xueqing.

[Foreign Language] So my question is related to VAS business. Can management share with us the strategy of VAS business in 2023, also to the progress and outlook of social e-commerce business?

[Foreign Language] [Interpreted] So, thank you for this question. If you're talking about the non-ad businesses, we are talking about the social e-commerce and also the membership services. So of course, for the social e-commerce, definitely speaking, now we are primarily speaking, we're trying the advertisement model, for instance, on the alliance together with the Alibaba or JD and also to realize the traffic monetization. So of course, last year, we've been trying some of the closed-loop e-commerce as well and especially focusing on a scenario of O2O for those high ARPU customers. And we found that the efficiency of the traffic monetization was way higher than of the advertisement model only. So, in 2023, we are able to further increase the total scale and also enlarge scale and size and also enlarge our market share by leveraging the method of, for example, KOL e-commerce live streaming or some of the key -- like the celebrities live streaming. And also, we are trying our best to really obtain as many customers with a high ARPU value as possible, okay. And also, last but not least, let's talk about some of the membership service. So that you can see that now the primary part of the membership revenue was contributed from the Weibo membership itself, which was a contributor as many as $500 million to $600 million a year. This was actually very fraction part of our total revenue, but still that was very much enjoying a high gross margin for the Weibo membership business. And in 2022, especially in the second half, we had the ratification and also the -- some kind of adjustment of the entertainment industry. So, this particular business witnessed or experienced the very first drop or decrease of the contribution to the revenue for the first time in the history. However, in 2023, while we are seeing a recovery of the entertainment and cultural industry and also with regards to the expectation of increasing revenue, we really hope that we could really develop this Weibo membership business further, because nowadays, the DAU penetration is very low or relatively lower-than-expected. So that is to say that there is still a large room for the further improvement, and we really hope that Weibo membership business is going to contribute more to our total revenue and also to the profit in the specific occasions. Thank you.

Great. Thank you very much for your questions. I'd now like to turn the conference back to Ms. Sandra Zhang for closing remarks.

Thanks, operator, and thanks -- thank you all for joining us. We'll see you next quarter.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.