Shulou(Shulou.com)11/24 Report--

On August 17, Beijing time (August 17, US Eastern time), bilibili (NASDAQ:BILI,HKEX:9626; hereinafter referred to as "bilibili") released his unaudited financial results for the second quarter ended June 30, 2023. According to the financial report, bilibili's total revenue in the second quarter reached 5.304 billion yuan, an increase of 8 per cent over the same period last year, gross profit rose 66 per cent year-on-year, and the adjusted net loss narrowed sharply by 51 per cent.

In the second quarter, bilibili continued to provide users with high-quality video content with rich categories and multi-scene coverage, promoting high-quality community activity and bringing new potential energy for business growth. In this quarter, the average number of daily active users of bilibili reached 96.5 million, an increase of 15% over the same period last year, and the average number of monthly active users reached 324 million. At the same time, bilibili actively promoted the process of commercialization and continuously improved operational efficiency. In the second quarter, advertising revenue increased by 36% compared with the same period last year, live broadcast revenue increased by 32%, and the overall gross profit margin further increased to 23.1%.

Chen Rui, chairman and CEO of bilibili, said: "in the second quarter of this year, while the community grew healthily, we achieved a substantial increase in gross profit and a substantial reduction in losses." In the second quarter, the average number of daily active users reached 96.5 million, an increase of 15% over the same period last year, and the average daily use time of users was 94 minutes, which led to a 22% increase in the total use time of the community compared with the same period last year. At the same time, we further improve operational efficiency and speed up the commercialization process. Gross profit increased by 66% year-on-year, gross profit margin increased continuously for four consecutive quarters, from 15% to 23.1%, and significantly narrowed the loss. The adjusted net loss was significantly narrowed by 51% compared with the same period last year. In 2023, while promoting the healthy growth of the community, we will focus more on business development, continue to improve operational efficiency, and bring richer, higher-quality content to users. "

The number of daily active users increased by 15% compared with the same period last year, and the average daily use time of users reached an all-time high of 94 minutes.

In the second quarter of 2023, bilibili's average daily active users reached 96.5 million, an increase of 15% over the same period last year, and the average monthly active users reached 324 million. The average daily use time of users reached 94 minutes, a record high for the same period, and the total use time increased by 22% compared with the same period last year.

Bilibili's multi-category and multi-scene video ecology allows users to obtain rich video content anytime and anywhere, driving the stickiness of users and the continuous improvement of the overall traffic of the community. In this quarter, bilibili's average daily video playback increased by 31% to 4.1 billion, with an average monthly interaction of nearly 15 billion, an increase of 19% over the same period last year.

In the second quarter, the number of bilibili's full members reached 214 million, an increase of 26% over the same period last year, and the retention rate of full members in the 12th month was stable at 80%.

Since the establishment of the company, with the strong influence of the community, bilibili has been engaged in public welfare undertakings for a long time, spreading positive values in the community and actively undertaking social responsibility. On June 26, during the celebration of bilibili's 14th anniversary, COO Li Mi announced that bilibili had established a "bilibili Football Primary School" in Binchuan County, Dali, Yunnan Province, which is also bilibili's sixth bilibili Primary School. With the growth of bilibili, more and more users and UP owners participate in bilibili's public welfare activities. As of June 26, the bilibili public welfare platform has launched 62 public welfare projects, raising more than 8 million yuan and more than 450000 donation users.

In July this year, bilibili held two large-scale events of Bilibili World and Bilibili Macro Link in Shanghai. 231 exhibitors, 714 groups of guests and UP exhibitors sold out more than 10,000 BW tickets within 3 minutes, and the first batch of BML tickets were sold out in 22 seconds. This highlights bilibili's strong influence among young users and their strong willingness to pay for community activities.

The master of more than 1.58 million UP earned income from bilibili, and the word-of-mouth list of self-made high-quality content

PUGV (Professional User Generated Video, professional user-created video) content is the core driving force for the vigorous development of bilibili community. Bilibili continues to provide users with new content categories and new scenes to help users find useful, interesting and high-quality content more quickly. In the second quarter, the number of daily active UP masters of bilibili increased by 19% compared with the same period last year; the average monthly video contribution volume was 18.89 million, an increase of 43% over the same period last year.

Bilibili continues to broaden cash channels to provide creators with more ways of income. In the second quarter, more than 1.58 million UP owners earned revenue from bilibili, up 40 per cent from a year earlier. In addition to creative incentives, more and more UP owners earn income through advertising, live streaming and other means. In the second quarter, the number of UP owners who earned revenue through live streaming and video delivery increased by more than 220% compared with the same period last year.

On the other hand, bilibili continues to dig deep around the two core strategies of boutique and IP, constantly launching more high-quality OGV (Occupationally Generated Video, professional organizations to create video) content, promoting the growth of the scale of paying users. In the second quarter, adapted from the main video of UP, bilibili's homemade costume drama "Ancient Acacia" Douban scored 8.6 points, topping the list of Chinese word-of-mouth dramas for two weeks in a row; "Xianchuan Magic Purple Forest of the five elements of the Fog Mountains" and "time Agent 2" are two original national animations, the former a representative of oriental martial arts, and the latter a combination of suspense, fantasy and other elements, which are rare national works that pay attention to realistic themes. The medical documentary "sparkling Pediatrician" focuses on the daily work of pediatricians, and CCTV Sinorama commented: "this documentary gives the audience inspiration and hope beyond joys and sorrows."

By the end of the second quarter, the number of bilibili's "big members" had reached 20.45 million, of which more than 80 per cent were annual subscribers or automatic renewal users.

Advertising revenue increased by 36% compared with the same period last year, while the adjusted net loss narrowed by 51%.

In the second quarter, bilibili continued to promote the process of commercialization and further improve business efficiency. In the current quarter, bilibili's total revenue reached 5.304 billion yuan, an increase of 8 per cent over the same period last year. Among them, advertising revenue increased by 36% over the same period last year, and live broadcast revenue increased by 32% over the same period last year. At the same time, gross profit in the second quarter rose 66% from a year earlier, and gross profit margin rose to 23% from 15% in the same period last year.

The company paid more attention to cost control and continued to reduce costs and increase efficiency. The total operating expenses decreased by 14% compared with the same period last year, of which marketing expenses and management expenses decreased by 22% and 14% respectively. The adjusted net loss narrowed sharply by 51% compared with the same period last year.

Driven by a 32 per cent year-on-year increase in live broadcast revenue, bilibili's value-added services business revenue reached 2.3 billion yuan, an increase of 9 per cent year-on-year. Bilibili continues to promote the integration of live streaming and PUGV ecology. In the second quarter, the number of monthly active anchors increased by 15% compared with the same period last year. In addition, bilibili is also exploring new live broadcast products and activities, such as holding birthday parties for anchors, to provide users with more paid ways to play.

In the second quarter, bilibili's advertising revenue increased 36% year-on-year to 1.6 billion yuan. By introducing transaction scenarios into the community, bilibili can cash out high-quality user traffic more efficiently. In the second quarter, effective advertising revenue grew by more than 60% compared with the same period last year. Brand advertising and spark advertising revenue have also achieved two-digit year-on-year growth.

The top five major advertisers in Station B are games, e-commerce, digital home appliances, beauty makeup and food and beverage. Bilibili continues to upgrade advertising programs customized for major industries, and continues to gain more share in advantageous industries such as games and e-commerce. In the second quarter, with the introduction of video products into the community, bilibili's e-commerce advertising revenue grew by more than 140% year-on-year, and the number of UP owners who earned revenue from various with-goods advertising products increased by 220% compared with the same period last year.

In the second quarter, bilibili's game business income was 890 million yuan. In July this year, bilibili launched the first independently developed female game, "Rockies: Princess of gone with the Wind," which topped the IOS free download list after its release. At the same time, bilibili plans to launch seven new games in domestic and foreign markets in the second half of the year, including the much-anticipated "sparkle!" Youjun Girl is scheduled to be officially tested on August 30. So far, more than 2 million players have booked to participate in the public test of the game.

In June 2023, the company completed the 2027 convertible bond repurchase offer with a total principal of US $750 million. As of June 30, 2023, the company holds cash and cash equivalents, term deposits and short-term investments totaling 14.3 billion yuan, providing sufficient funds for the company's operations. At the same time, bilibili will further promote commercialization, increase gross profit margin, reduce losses, and steadily move towards the goal of break-even.

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