Social media giant Weibo (NASDAQ: WB) booked USD 323.4 million in net revenues during the first quarter of the year, still exceeding market expectations of USD 322.8 million but marking a 19% year-on-year (YoY) decline, the company announced on Tuesday.

After the announcement, Weibo’s share price fell by 1.94% to USD 35.89 as of market close on Tuesday.

Weibo’s advertising and marketing revenue especially suffered during the COVID-19 outbreak, falling by 19% YoY to USD 275.4 million. Advertising revenue from small and medium-sized enterprises (SMEs) fell by 23% YoY as these firms took the hardest hit from the economic crisis.

While the economic slowdown caused by the pandemic limited advertisers’ spending in the near-term, Weibo enjoyed a record YoY user growth in terms of net monthly active users (MAUs) and daily active users (DAUs) as many turned to the social media platform during the lockdown. Weibo’s MAUs grew by 18% YoY to 550 million as of March 31, 2020, while DAUs increased by 38 million to 241 million during the quarter.

The firm’s CEO Gaofei Wang explained that there has been a recovery trend in the company’s advertising revenue since March, but affirmed that uncertainties over the pandemic remain in the coming quarters.

Wang highlighted the recent success of Weibo’s video initiatives, as daily video views and number of users consuming videos on Weibo grew over 30% YoY during the first quarter.

Specifically, the company aims to focus on user-generated content (UGC), after observing a 50% sequential increase in views in this segment. The company’s video format ads generated a “substantially higher revenue contribution” during the March quarter, according to Wang.

Wang also mentioned the importance of livestreaming during the earnings call, recognizing its growing popularity as a communication channel. In addition to e-commerce opportunities, Weibo said it wants to livestream more concerts. As an example, he mentioned an event co-hosted by Weibo and Tencent Music in April for musician Rene Liu, which garnered over 10 million views.

For the second quarter, Weibo expects revenue to decline between 7% and 12% YoY, on a constant currency basis.

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Weibo reports record user growth in Q1, targets livestreaming and video content in 2020