Bilibili Inc. (NASDAQ:BILI) Q2 2023 Earnings Conference Call August 17, 2023 8:00 AM ET Company Participants Juliet Yang - Executive Director of Investor Relations Sam Fan - Chief Financial Officer Rui Chen - Chairman of the Board and Chief Executive Officer Carly Lee - Vice Chairwoman of the Board and Chief Operating Officer Conference Call Participants Xueqing Zhang - CICC Lei Zhang - Bank of America Securities Kenneth Fong - Credit Suisse Yiwen Zhang - China Renaissance Lincoln Kong - Goldman Sachs Opera ...

Financial Performance - Total net revenues for the six months ended June 30, 2023, were RMB10.4 billion, representing a 4% increase from RMB10.0 billion for the same period in 2022[4] - Gross profit increased by 51% year-over-year to RMB2.3 billion, with a gross profit margin of 22.5%, up from 15.5% in the same period last year[4] - Net loss narrowed by 49% to RMB2.2 billion, while adjusted net loss narrowed by 45% to RMB2.0 billion[4] - Total net revenues for the first half of 2023 were RMB10.4 billion, a 4% increase from RMB10.0 billion in the same period of 2022[31] - Revenues from value-added services (VAS) were RMB4.5 billion, representing a 7% increase from RMB4.2 billion year-over-year, driven by live broadcasting growth[32] - Advertising revenues reached RMB2.8 billion, a 29% increase from RMB2.2 billion in the first half of 2022, primarily due to improved advertising product offerings[33] - Mobile games revenues decreased by 16% to RMB2.0 billion from RMB2.4 billion, attributed to a lack of new game launches[34] - Total comprehensive loss for the six months ended June 30, 2023, was RMB (1,957,835) compared to RMB (3,960,333) for the same period in 2022, indicating a significant reduction in losses[66] - The net loss attributable to Bilibili Inc.'s shareholders for the six months ended June 30, 2023, was RMB 2,174,393 thousand, significantly reduced from a net loss of RMB 4,288,909 thousand in 2022, indicating an improvement of approximately 49.3%[92] User Engagement - Average daily active users (DAUs) reached 95.1 million, a 17% increase from 81.4 million for the same period in 2022[4] - Monthly active users (MAUs) reached 319 million, with a DAU/MAU ratio of 29.8%, up from 27.2% in the same period last year[12] - Total daily video views increased by 34% year-over-year to 4.1 billion, with Story Mode's daily video views growing by 78%[14] - Over 2.1 million creators earned money through various Bilibili channels, representing a 41% increase year-over-year[15] - The average daily time spent on the platform was 95 minutes, the highest level for a first half year period in the company's operating history[17] Operating Expenses - Total operating expenses declined by 13%, including a 26% decrease in sales and marketing expenses[11] - Total operating expenses decreased by 13% to RMB5.0 billion from RMB5.7 billion year-over-year[38] - Sales and marketing expenses were RMB1.8 billion, a 26% decrease from RMB2.4 billion, primarily due to reduced promotional spending[39] Cash Flow and Assets - Cash and cash equivalents decreased by 27% to RMB14.3 billion as of June 30, 2023, down from RMB19.6 billion as of December 31, 2022, primarily due to the repurchase of 2027 Notes for RMB5.3 billion[44] - Total current assets decreased from RMB 24,452,888 as of December 31, 2022, to RMB 18,710,694 as of June 30, 2023[67] - Total liabilities decreased from RMB 26,590,983 as of December 31, 2022, to RMB 18,362,675 as of June 30, 2023[68] - Net cash used in operating activities for the six months ended June 30, 2023, was RMB (651,158), a decrease from RMB (2,104,516) for the same period in 2022[71] - Net cash provided by investing activities for the six months ended June 30, 2023, was RMB 1,010,143, compared to RMB (647,890) for the same period in 2022[71] Shareholder Information - The company did not recommend the distribution of an interim dividend for the six months ended June 30, 2023[62] - The company did not recommend the distribution of any dividend for the six months ended June 30, 2022, and 2023[93] - The weighted average number of ordinary shares outstanding increased to 412,013,005 for the six months ended June 30, 2023, compared to 394,142,409 in 2022[92] Employee Information - As of June 30, 2023, the company had a total of 10,354 employees, a decrease from 11,092 employees as of December 31, 2022[49] Future Outlook - The company aims to enhance traffic commercialization efficiency and introduce more high-quality games in the second half of 2023[28]

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完整性亦不發表 任何聲明，並明確表示概不會就本公告全部或任何部分內容而產生或因倚賴該等內容而引致的任何損失承擔任何 責任。 Bilibili Inc. 嗶哩嗶哩股份有限公司 （於開曼群島註冊成立以不同投票權控制的有限責任公司） （股份代號：9626） 截 至 2023 年 6 月 30 日 止 六 個 月 的 中 期 業 績 公 告 嗶哩嗶哩股份有限公司（「本公司」）董事（「董事」）會（「董事會」）欣然公佈本公司、其子 公司及併表關聯實體（「本集團」）截至2023年6月30日止六個月（「報告期間」）的未經審計 中期合併業績，連同2022年同期的比較數字。該等中期業績根據美國公認會計準則（「美 國公認會計準則」）編製並經董事會審計委員會（「審計委員會」）審閱。本公司獨立核數 師羅兵咸永道會計師事務所已根據國際審閱委聘準則第2410號「由實體的獨立核數師執 行的中期財務資料審閱」審閱我們截至2023年6月30日止六個月的中期財務資料。 於本公告中，「我們」及「我們的」指本公司及（如文義另有所指）本集團。 截至2023年6月30日止 ...

Market Opportunity & User Base - The video-based industry presents a golden opportunity, with an expected market size of RMB 1,877 billion in 2025[11] - The number of video users is projected to reach 1,180 million in 2025[11] - Bilibili's core user base, Gen Z+ (born 1985-2009), represents over 450 million people[13] - Gen Z+ is expected to contribute 73% of China's video-based industry revenue[13] Content & Community - 95% of total video views are contributed by PUGVs (Professionally User Generated Videos) and Story Mode[25] - Bilibili has a highly engaged community, with 41 billion average daily video views[33] - The platform boasts 149 billion monthly interactions[33] - Bilibili has a highly sticky community with approximately 80% 12-month retention rate for official members[36] Financial Performance - Total net revenues increased by 8% year-over-year to RMB 5305 million in 23Q2[70] - Advertising revenues showed robust growth, increasing by 36% year-over-year to RMB 1573 million in 23Q2[70] - The company is focused on cost control, with operating expenses decreasing by 12% year-over-year[66]

[0 -> 15] Good day and welcome to Bilibili Second Quarter 2023 Financial Results and Business Update [15 -> 20] conference call. Today's conference is being recorded. At this time, I would like to turn [20 -> 26] the conference over to Juliet Yang, Executive Director of Investor Relations. Please go [26 -> 36] ahead. Thank you, operator. During this call, we'll [36 -> 42] discuss business outlook and make forward-looking statements. These comments are based on our [42 -> 49] predictions and expectations as ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完整性亦不發表 任何聲明，並明確表示概不會就本公告全部或任何部分內容而產生或因倚賴該等內容而引致的任何損失承擔任何 責任。 Bilibili Inc. 嗶哩嗶哩股份有限公司 （於開曼群島註冊成立以不同投票權控制的有限責任公司） （股份代號：9626） 內 幕 消 息 2023 年 第 二 季 度 未 經 審 計 的 財 務 業 績 公 告 本公司欣然宣佈其根據美國證券交易委員會（「美國證交會」）的適用規則刊發的截至2023 年6月30日止第二季度未經審計財務業績（「第二季度業績」）。 本公告隨附的附表一為本公司於2023年8月17日（美國東部時間）刊發的有關第二季度業 績的新聞稿全文，其中部分內容可能構成本公司的重大內幕消息。 本公告載有前瞻性陳述。該等陳述乃根據1995年《美國私人證券訴訟改革法》中的「安全 港」條文作出。該等前瞻性陳述可從所用詞彙如「將」、「預期」、「預計」、「旨在」、「未 來」、「擬」、「計劃」、「相信」、「估計」、「有信心」、「潛在」、「繼續」或其他類似陳述加 以識別。其中，本公告內的展望和引述管理層話 ...

[Bilibili Inc. First Quarter 2023 Financial Results](index=1&type=section&id=Bilibili%20Inc.%20Announces%20First%20Quarter%202023%20Financial%20Results) [First Quarter 2023 Highlights and Management Commentary](index=1&type=section&id=First%20Quarter%202023%20Highlights) Bilibili's Q1 2023 saw revenue growth driven by advertising, significantly improved profitability, and strong user engagement Financial Metric | Financial Metric | Q1 2023 | YoY Change | | :--- | :--- | :--- | | Total Net Revenues | RMB 5.1 billion | +0.3% | | Advertising Revenues | RMB 1.3 billion | +22% | | Gross Profit | RMB 1.1 billion | +37% | | Net Loss | RMB 629.6 million | -72% | | Adjusted Net Loss | RMB 1.0 billion | -38% | User Metric | User Metric | Q1 2023 | YoY Change | | :--- | :--- | :--- | | Average DAUs | 93.7 million | +18% | | Average MAUs | 315.2 million | N/A | | DAU/MAU Ratio | 29.7% | N/A | | Avg. Daily Time Spent | 96 minutes | N/A | - Management's primary focus is on enhancing commercialization efficiency and profitability, leading to a **30% YoY decrease in sales and marketing expenses** and an improved **gross profit margin of 22%**[3](index=3&type=chunk) [Detailed Financial Results](index=2&type=section&id=First%20Quarter%202023%20Financial%20Results) Q1 2023 net revenues grew slightly to RMB 5.1 billion, with strong cost controls leading to a 72% reduction in net loss [Revenue by Segment](index=2&type=section&id=Revenue%20by%20Segment) Revenue Segment | Revenue Segment | Q1 2023 Revenue (RMB) | YoY Change | Reason for Change | | :--- | :--- | :--- | :--- | | Value-added services (VAS) | 2.2 billion | +5% | Increased number of paying users for live broadcasting | | Advertising | 1.3 billion | +22% | Improved advertising product offerings and efficiency | | Mobile games | 1.1 billion | -17% | Lack of new game launches in the quarter | | IP derivatives and others | 510.0 million | -15% | Decrease in sales of ACG derivative merchandise | [Costs and Expenses](index=2&type=section&id=Costs%20and%20Expenses) - Cost of revenues decreased by **7% YoY to RMB 4.0 billion**, primarily due to lower revenue-sharing, server, and bandwidth costs[5](index=5&type=chunk) - Total operating expenses fell **11% YoY to RMB 2.5 billion**, driven by a significant **30% YoY decrease in Sales and Marketing expenses**[6](index=6&type=chunk) [Profitability and EPS](index=3&type=section&id=Profitability%20and%20EPS) - Loss from operations narrowed by **31% YoY to RMB 1.4 billion**[8](index=8&type=chunk) - Net loss significantly narrowed by **72% YoY to RMB 629.6 million**, while adjusted net loss narrowed by **38% YoY to RMB 1.0 billion**[8](index=8&type=chunk)[9](index=9&type=chunk) EPS Metric | Metric | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Basic and Diluted Net Loss per Share | RMB 1.53 | RMB 5.80 | | Adjusted Basic and Diluted Net Loss per Share | RMB 2.51 | RMB 4.20 | - As of March 31, 2023, the company held cash, time deposits, and short-term investments totaling **RMB 19.4 billion (US$2.8 billion)**[10](index=10&type=chunk) [Capital Management and Corporate Updates](index=3&type=section&id=Capital%20Management%20and%20Corporate%20Updates) The company executed share and note repurchases, published its 2022 ESG report, and reaffirmed its full-year revenue guidance - Under its US$500 million share repurchase program, the company repurchased **2.6 million ADSs for US$53.6 million** as of March 31, 2023[10](index=10&type=chunk) - In January 2023, the company used proceeds from an ADS offering to fund the repurchase of **US$384.8 million of its outstanding December 2026 Notes**[11](index=11&type=chunk) - The company released its **2022 annual ESG report** in April 2023, highlighting its commitment to sustainable development[14](index=14&type=chunk) - The full-year 2023 net revenue outlook is maintained at between **RMB 24.0 billion and RMB 26.0 billion**[15](index=15&type=chunk) [Unaudited Financial Statements](index=8&type=section&id=Unaudited%20Financial%20Statements) [Unaudited Condensed Consolidated Statements of Operations](index=8&type=section&id=Unaudited%20Condensed%20Consolidated%20Statements%20of%20Operations) The statement of operations shows Q1 2023 revenues of RMB 5.07 billion and a net loss of RMB 629.6 million Statement of Operations | (Amounts in RMB thousands) | Q1 2023 | Q1 2022 | | :--- | :--- | :--- | | Total net revenues | 5,069,611 | 5,054,099 | | Gross profit | 1,103,932 | 807,241 | | Loss from operations | (1,374,661) | (1,990,812) | | Net loss | (629,645) | (2,284,132) | | Net loss per share, basic | (1.53) | (5.80) | [Unaudited Condensed Consolidated Balance Sheets](index=10&type=section&id=Unaudited%20Condensed%20Consolidated%20Balance%20Sheets) The balance sheet as of March 31, 2023 showed total assets of RMB 41.0 billion and total liabilities of RMB 23.4 billion Balance Sheet | (Amounts in RMB thousands) | March 31, 2023 | December 31, 2022 | | :--- | :--- | :--- | | Cash, time deposits, & short-term investments | 19,386,139 | 19,563,988 | | Total current assets | 23,964,618 | 24,452,888 | | Total assets | 40,977,221 | 41,830,570 | | Total current liabilities | 16,700,327 | 17,093,404 | | Total liabilities | 23,389,554 | 26,590,983 | | Total shareholders' equity | 17,587,667 | 15,239,587 | [Unaudited Reconciliations of GAAP and Non-GAAP Results](index=11&type=section&id=Unaudited%20Reconciliations%20of%20GAAP%20and%20Non-GAAP%20Results) The reconciliation adjusts the Q1 2023 GAAP net loss of RMB 629.6 million to a non-GAAP net loss of RMB 1.03 billion GAAP to Non-GAAP Reconciliation | (Amounts in RMB thousands) | Q1 2023 | | :--- | :--- | | Net loss (GAAP) | (629,645) | | Add: Share-based compensation | 260,734 | | Add: Amortization of intangible assets | 48,151 | | Less: Gain on fair value change in investments | (367,920) | | Less: Gain on repurchase of convertible senior notes | (336,485) | | **Adjusted net loss (Non-GAAP)** | **(1,030,790)** |

Financial Data and Key Metrics Changes - Total net revenue for Q1 2023 was RMB5.1 billion, flat compared to the same period last year [17] - Gross profit increased by 37% year-over-year to RMB1.1 billion, with gross margin improving to 22% from 16% [17][18] - Net loss narrowed by 72% year-over-year to RMB630 million, with a net loss ratio of 12%, down from 45% a year ago [18] Business Line Data and Key Metrics Changes - Advertising revenue grew by 22% year-over-year to RMB1.3 billion, driven by improvements in ad infrastructure [13][17] - VAS revenue increased by 5% year-over-year to RMB2.2 billion, primarily due to growth in live broadcasting [12] - Game revenue for Q1 was RMB1.1 billion, with plans to release eight new titles in domestic markets [14] - Revenue from IP derivatives decreased by 15% year-over-year to RMB510 million, but margins improved significantly [15] Market Data and Key Metrics Changes - Daily Active Users (DAUs) grew by 18% year-over-year to 93.7 million, while Monthly Active Users (MAUs) reached 315 million [5][17] - The DAU to MAU ratio improved to 29.7% from 27% a year ago [5] - Average daily time spent on the platform remained stable at 96 minutes, with monthly interactions up 15% year-over-year to 14.2 billion [10] Company Strategy and Development Direction - The company aims to improve commercialization efficiency and narrow losses, focusing on high-quality DAU growth [4][22] - Plans to expand the creator base and enhance monetization opportunities for content creators [6][8] - Continued investment in ad infrastructure, live broadcasting integration, and exploring AIGC opportunities [6][10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving break-even targets and improving financial metrics [4] - The advertising market in China is expected to achieve double-digit growth, with Bilibili capturing more market share [26] - The gaming industry is anticipated to see regular issuance of licenses, benefiting Bilibili's distribution capabilities [50] Other Important Information - The company has a strong cash position with RMB19.4 billion (US$2.8 billion) available to cover liabilities and fund operations [18] - The 2022 annual ESG report highlights the company's commitment to social responsibility and community building [15] Q&A Session Summary Question: User growth outlook and strategy - Management emphasized a quality-oriented approach to user growth, focusing on DAU rather than MAU, with a goal to improve retention and engagement [22][23] Question: Advertisement growth and strategy - Management noted a 22% year-over-year growth in ad revenue, driven by improvements in ad products and efficiency, and expressed confidence in capturing more market share [26][27] Question: Live streaming business strategy - Management highlighted the integration of live streaming with video content, noting significant growth in both areas and optimistic about future prospects [35][39] Question: Monetization for content creators - Management clarified efforts to improve monetization for creators, stating that 1.5 million creators earned income in Q1, up 50% year-over-year [43][45] Question: Gaming pipeline and outlook - Management shared plans for launching 13 games in the coming quarters, with a focus on high-quality self-developed titles [50][51] Question: Measures for improving gross profit margin - Management outlined strategies for improving gross margin through operational efficiency and cost control, with a focus on maintaining a healthy revenue mix [56]

Financial Performance - Total net revenue for Q1 2023 reached RMB 5.1 billion (USD 738.2 million), a 0.3% increase compared to the same period in 2022[5] - Advertising revenue amounted to RMB 1.3 billion (USD 185.2 million), representing a 22% year-over-year increase[6] - Gross profit was RMB 1.1 billion (USD 160.7 million), a 37% increase from Q1 2022[5] - Net loss narrowed to RMB 629.6 million (USD 91.7 million), a 72% reduction compared to the previous year[5] - Daily active users (DAUs) reached 93.7 million, an 18% increase year-over-year[5] - Monthly active users (MAUs) totaled 315.2 million, with DAUs accounting for 29.7% of MAUs[5] - Operating loss decreased to RMB 1.4 billion (USD 200.2 million), a reduction of 31% compared to the same period in 2022[8] - Other income totaled RMB 776.7 million (USD 113.1 million), significantly up from RMB 263.6 million in the same period last year, primarily due to gains from the repurchase of convertible preferred bonds and fair value changes of investments[8] - Net loss was RMB 629.6 million (USD 91.7 million), a decrease of 72% year-over-year[8] - Adjusted net loss was RMB 1 billion (USD 150.1 million), down 38% from the same period in 2022[8] Expenses - Research and development expenses were RMB 1 billion (USD 149.5 million), a 2% increase year-over-year[7] - Sales and marketing expenses decreased by 30% to RMB 880.2 million (USD 128.2 million) due to reduced promotional spending[6] - Operating expenses totaled RMB 2.5 billion (USD 360.9 million), an 11% decrease from the previous year[6] - Research and development expenses were RMB 1,026,712 thousand, a decrease of 2.2% from RMB 1,008,843 thousand in the same quarter of 2022[19] Cash and Investments - Cash and cash equivalents, along with short-term investments, amounted to RMB 19.4 billion (USD 2.8 billion) as of March 31, 2023[8] - The company has a share repurchase plan approved in March 2022, allowing for the repurchase of up to USD 500 million of American Depositary Shares over 24 months, with a total of 2.6 million shares repurchased at a cost of USD 53.6 million as of March 31, 2023[8] - The company completed a private exchange of USD 384.8 million of notes for American Depositary Shares, funded by proceeds from a recent share issuance[9] - Cash and cash equivalents increased slightly to RMB 10,217,931 thousand as of March 31, 2023, from RMB 10,172,584 thousand as of December 31, 2022, showing a growth of approximately 0.44%[22] - The company’s cash and short-term investments totaled RMB 23,964,618 thousand as of March 31, 2023, down from RMB 24,452,888 thousand as of December 31, 2022, a decline of approximately 1.99%[22] Shareholder Information - The weighted average number of ordinary shares outstanding was 410,564,084 for the quarter ended March 31, 2023, compared to 393,538,141 for the same quarter of 2022[19] - Basic and diluted net loss per share was RMB 1.53, compared to RMB 5.80 in the same quarter of 2022[19] - The weighted average number of ordinary shares (basic) increased to 410,564,084 for Q1 2023, up from 393,538,141 in Q1 2022, representing an increase of approximately 4.31%[23] Future Projections - The company projects full-year net revenue for 2023 to reach between RMB 24 billion and RMB 26 billion, unchanged from previous estimates[11] - The adjusted net loss and adjusted earnings per share are non-GAAP financial metrics that exclude certain expenses and gains, providing insight into the company's core operating trends[14] Assets and Liabilities - As of March 31, 2023, total assets decreased to RMB 40,977,221 thousand from RMB 41,830,570 thousand as of December 31, 2022, representing a decline of approximately 2.04%[22] - Total liabilities decreased to RMB 23,389,554 thousand as of March 31, 2023, down from RMB 26,590,983 thousand as of December 31, 2022, a reduction of about 12.15%[22] - The total current liabilities decreased to RMB 16,700,327 thousand as of March 31, 2023, from RMB 17,093,404 thousand as of December 31, 2022, a decrease of about 2.30%[22] - The total equity attributable to shareholders increased to RMB 17,587,667 thousand as of March 31, 2023, from RMB 15,239,587 thousand as of December 31, 2022, indicating a growth of about 15.43%[22] - The company reported a decrease in accounts receivable (net) to RMB 1,273,156 thousand as of March 31, 2023, from RMB 1,328,584 thousand as of December 31, 2022, a decline of approximately 4.18%[22] ESG Commitment - The company emphasizes its commitment to ESG initiatives, showcasing efforts to create value with users and stakeholders in its 2022 ESG report[10]

Financial Performance - Net revenue increased by 13.0% to RMB 21,899,167 thousand in 2022 compared to RMB 19,383,684 thousand in 2021[5] - Gross profit decreased by 4.8% to RMB 3,849,295 thousand in 2022 from RMB 4,043,147 thousand in 2021[5] - Net loss increased by 10.3% to RMB 7,507,653 thousand in 2022 from RMB 6,808,739 thousand in 2021[5] - Adjusted net loss increased by 21.9% to RMB 6,702,373 thousand in 2022 from RMB 5,497,573 thousand in 2021[5] - Total assets decreased by 19.6% to RMB 41,830,570 thousand in 2022 from RMB 52,053,151 thousand in 2021[6] - Total liabilities decreased by 12.3% to RMB 26,590,983 thousand in 2022 from RMB 30,337,085 thousand in 2021[6] - Total equity decreased by 29.8% to RMB 15,239,587 thousand in 2022 from RMB 21,716,066 thousand in 2021[6] - Net revenue for 2022 was RMB 21.9 billion, a 13.0% increase compared to RMB 19.4 billion in 2021[11] - Gross margin improved to 20.3% in Q4 2022, up from 19.0% in Q4 2021[11] - Net revenue increased by 13.0% to RMB 21.9 billion in 2022 compared to RMB 19.4 billion in 2021[23] - Gross profit decreased to RMB 3.8 billion in 2022 from RMB 4.0 billion in 2021[27] - Net loss widened to RMB 7.5 billion in 2022 from RMB 6.8 billion in 2021[29] - Cash and cash equivalents decreased by 35.2% to RMB 19.6 billion at the end of 2022, mainly due to the repurchase of convertible bonds and ADS[30] - Total revenue from the top five customers accounted for less than 10% of the company's total revenue in the fiscal year ending December 31, 2022[76] - Total procurement from the top five suppliers accounted for less than 15% of the company's total operating costs and expenses in the fiscal year ending December 31, 2022[76] - Cash and cash equivalents increased to RMB 10,172,584,000 (USD 1,474,886,000) in 2022 from RMB 7,523,108,000 in 2021[198] - Short-term investments decreased significantly to RMB 4,623,452,000 (USD 670,338,000) in 2022 from RMB 15,060,722,000 in 2021[198] - Total current assets decreased to RMB 24,452,888,000 (USD 3,545,336,000) in 2022 from RMB 36,446,856,000 in 2021[198] - Total non-current assets increased to RMB 17,377,682,000 (USD 2,519,527,000) in 2022 from RMB 15,606,295,000 in 2021[198] - Total assets decreased to RMB 41,830,570,000 (USD 6,064,863,000) in 2022 from RMB 52,053,151,000 in 2021[198] - Total liabilities decreased from RMB 30,337.1 million in 2021 to RMB 26,590.98 million in 2022, a decrease of 12.3%[199] - Current liabilities increased from RMB 12,071.01 million in 2021 to RMB 17,093.4 million in 2022, an increase of 41.6%[199] - Non-current liabilities decreased from RMB 18,266.07 million in 2021 to RMB 9,497.58 million in 2022, a decrease of 48%[199] - Total equity decreased from RMB 21,716.07 million in 2021 to RMB 15,239.59 million in 2022, a decrease of 29.8%[200] - Accumulated losses increased from RMB (13,971.3) million in 2021 to RMB (21,479.87) million in 2022, an increase of 53.7%[200] - Capital reserve increased from RMB 35,929.96 million in 2021 to RMB 36,623.16 million in 2022, an increase of 1.9%[200] - Total liabilities and equity decreased from RMB 52,053.15 million in 2021 to RMB 41,830.57 million in 2022, a decrease of 19.6%[200] User Metrics and Engagement - Monthly active users (MAU) increased by 25.9% year-over-year to 314.5 million in 2022[11] - Daily active users (DAU) grew by 29.6% year-over-year to 86.5 million in 2022[11] - Average daily time spent per user on the mobile app reached 94 minutes, driving a 46.7% year-over-year increase in total user time spent on the platform[11] - Story Mode daily video views increased by over 300% year-over-year in 2022[12] - Monthly active content creators grew by 45.2% year-over-year to 3.7 million in 2022[13] Revenue Breakdown - Advertising revenue reached RMB 5.1 billion in 2022, a 12.0% increase compared to 2021[17] - Mobile game revenue was RMB 5.0 billion in 2022, slightly down from RMB 5.1 billion in 2021[18] - Mobile game revenue decreased by 1.4% to RMB 5.0 billion in 2022 due to the lack of new popular exclusive games[23] - Value-added service revenue increased by 25.7% to RMB 8.7 billion in 2022, driven by increased monetization efforts and growth in paying users[24] - Advertising revenue increased by 12.0% to RMB 5.1 billion in 2022, attributed to improved brand recognition and advertising efficiency[25] - E-commerce and other revenue increased by 9.2% to RMB 3.1 billion in 2022, mainly due to increased revenue from sublicensed e-sports rights[25] - The company's mobile game service revenue for the year ended December 31, 2022, was RMB 5,021.3 million, with revenue recognized over the estimated average play period of paying players, typically ranging from 2 to 9 months[192] Operating Costs and Expenses - Operating costs increased by 17.7% to RMB 18.0 billion in 2022, primarily due to higher revenue-sharing and content costs[26] - Operating expenses increased by 16.6% to RMB 12.2 billion in 2022, with R&D expenses surging by 67.8% to RMB 4.8 billion[27][28] - Share-based compensation expenses increased to RMB 1,040,683 thousand in 2022 from RMB 999,817 thousand in 2021[9] - Amortization expenses related to intangible assets acquired through business acquisitions increased to RMB 192,637 thousand in 2022 from RMB 113,405 thousand in 2021[9] - Expenses related to the termination of certain game projects amounted to RMB 525,762 thousand in 2022[9] Corporate Governance and Structure - The company is dually listed on NASDAQ and the Hong Kong Stock Exchange[37] - The company's main business is investment holding, with subsidiaries primarily engaged in providing online entertainment services to users in China[38] - The company operates through a Cayman Islands holding company with Chinese subsidiaries and variable interest entities (VIEs), but does not hold equity in the VIEs or their subsidiaries. This structure may face legal risks if deemed non-compliant with Chinese regulations, potentially leading to severe penalties or loss of business interests[43] - Chinese government regulations and interpretations could significantly impact the company's ability to issue securities or attract foreign investment, potentially causing a substantial decline in the value of its securities[44] - The company faces uncertainties related to antitrust regulations, including the "Platform Economy Anti-Monopoly Guidelines," which may affect its business operations[45] - PCAOB's inability to inspect the company's auditors in China could lead to the delisting of its American Depositary Shares (ADS) under the HFCAA, negatively impacting investor value[45] - The company's overseas securities issuance may require approval from Chinese regulatory authorities, with no guarantee of obtaining such approvals or the timeline for completion[45] - Content regulation and censorship in China could adversely affect the company's business and expose it to legal liabilities for content published on its platform[45] - The company's securities are subject to significant price volatility, regardless of operational performance, which may result in substantial losses for investors[45] - Foreign investors are prohibited from holding equity in entities engaged in internet audio-visual program services, broadcasting, and related businesses, as per China's Negative List (2021)[48] - The company's subsidiaries, such as Shanghai Kuanyu, hold licenses for internet audio-visual and broadcasting services, which are restricted from foreign investment under Chinese regulations[49] - Variable Interest Entities (VIEs) revenue reached RMB 16,074.7 million, accounting for approximately 73.4% of the group's total revenue[51] - The VIEs structure is designed to minimize potential conflicts with Chinese laws and regulations regarding foreign investment in internet and related industries[51] - The company relies on contractual arrangements with VIEs and their shareholders to conduct business in China, which may not be as effective as direct equity ownership[51] - The VIEs also operate auxiliary businesses, including e-commerce platform operations through "Member Purchase" and ACG-related product development and sales[51] - The company faces risks related to potential changes in Chinese laws or interpretations that could impact the VIEs structure and operations[51] - The VIEs' revenue increased from RMB 14,442.4 million in 2021 to RMB 16,074.7 million in 2022, with a slight decrease in the percentage of total group revenue from 74.5% to 73.4%[51] - The company's contractual arrangements with VIEs may be subject to scrutiny by Chinese tax authorities, potentially impacting financial conditions[52] - The VIEs' shareholders and the company may have potential conflicts of interest, which could adversely affect the business[53] - The company may depend on dividends from Chinese subsidiaries to meet cash and financing needs, which could be restricted[53] - The impact of the Foreign Investment Law on the company's current corporate structure and operational feasibility remains uncertain[53] - Bilibili's exclusive business cooperation agreement with Shanghai Kuanyu ensures that all intellectual property developed by consolidated affiliated entities is exclusively owned by Shanghai HuanDian, securing economic benefits for the group[56] - The service fee under the exclusive business cooperation agreement is adjusted based on factors such as service complexity, time required, content, commercial value, and market prices of similar services[55] - Shanghai Kuanyu is restricted from making significant transactions, including asset sales, mergers, acquisitions, or reorganizations, without prior written approval from Shanghai HuanDian[55] - The exclusive purchase right agreement grants Shanghai HuanDian the right to acquire Shanghai Kuanyu's equity or assets at the minimum price allowed by Chinese laws, potentially at no cost or nominal price[57] - Shanghai Kuanyu is required to maintain its asset value and notify Shanghai HuanDian immediately in case of any disputes, litigation, or administrative proceedings affecting its assets or business[58] - The exclusive purchase right agreement is effective indefinitely from December 23, 2020, and can only be terminated by Shanghai HuanDian under specific conditions[59] - Shanghai Kuanyu must obtain prior written consent from Shanghai HuanDian for any significant contracts exceeding RMB 1 million, except those in the normal course of business[58] - The exclusive business cooperation agreement and exclusive purchase right agreement are designed to ensure that economic benefits from Shanghai Kuanyu's operations flow into Shanghai HuanDian and ultimately the group[56][57] - Chen Rui pledged all his equity in Shanghai Kuanyu to Shanghai HuanDian as collateral to secure contractual obligations and unpaid debts[60] - The equity pledge agreement ensures Shanghai HuanDian's rights to dividends and other income from the pledged equity, and allows Shanghai HuanDian to take custody of the equity in case of default[61] - Chen Rui granted Shanghai HuanDian an irrevocable power of attorney to exercise his shareholder rights in Shanghai Kuanyu, including voting and appointing directors[62] Shareholder and Voting Rights - The company's different voting rights beneficiaries collectively held 83,715,114 Class Y ordinary shares, representing 72.9% of the voting rights for non-reserved matters as of December 31, 2022[73] - Chen Rui, through Vanship Limited, held 49,299,006 Class Y ordinary shares and 525,525 Class Z ordinary shares, representing 43.0% of the company's voting rights as of December 31, 2022[73] - Li Ni, through Saber Lily Limited, held 7,200,000 Class Y ordinary shares and 908,300 Class Z ordinary shares, representing 6.4% of the company's voting rights as of December 31, 2022[73] - Xu Yi, through Kami Sama Limited, held 27,216,108 Class Y ordinary shares and 151,000 Class Z ordinary shares, representing 23.7% of the company's voting rights as of December 31, 2022[73] - Chen Rui holds 58.89% of Y-class ordinary shares and 1.61% of Z-class ordinary shares through Vanship Limited[145] - Li Ni holds 8.60% of Y-class ordinary shares and 0.64% of Z-class ordinary shares through Saber Lily Limited[145] - Xu Yi holds 32.51% of Y-class ordinary shares and 0.05% of Z-class ordinary shares through Kami Sama Limited[145] - As of December 31, 2022, the company had issued a total of 83,715,114 Y-class ordinary shares and 310,864,471 Z-class ordinary shares[146] - Chen Rui holds a 25.04% beneficial interest in Shanghai Bilibili E-Sports Information Technology Co., Ltd[147] - Li Ni holds a 6.87% beneficial interest in Shanghai Bilibili E-Sports Information Technology Co., Ltd[147] - Xu Yi holds a 3.44% beneficial interest in Shanghai Bilibili E-Sports Information Technology Co., Ltd[147] - Vanship Limited holds 49,299,006 Y-class shares, representing 58.89% of the total Y-class shares[149] - Kami Sama Limited holds 27,216,108 Y-class shares, representing 32.51% of the total Y-class shares[149] - Saber Lily Limited holds 7,200,000 Y-class shares, representing 8.60% of the total Y-class shares[149] - Tencent Holdings Limited holds 43,749,518 Z-class shares, representing 13.84% of the total Z-class shares[149] - Tencent Mobility Limited holds 32,795,161 Z-class shares, representing 10.37% of the total Z-class shares[149] - Alibaba Group Holding Limited holds 30,845,657 Z-class shares, representing 9.92% of the total Z-class shares[149] - JPMorgan Chase & Co. holds 14,312,129 Z-class shares (long position), representing 4.53% of the total Z-class shares[152] - JPMorgan Chase & Co. holds 13,154,062 Z-class shares (short position), representing 4.16% of the total Z-class shares[152] - Brown Brothers Harriman & Co. holds 21,754,203 Z-class shares (long position), representing 7.00% of the total Z-class shares[152] - Brown Brothers Harriman & Co. holds 21,754,203 Z-class shares (available for lending), representing 7.00% of the total Z-class shares[152] Share Incentive Plans - The company issued 7,796,003 Class Z ordinary shares under the 2018 Share Incentive Plan, representing approximately 2.0% of the weighted average number of issued shares[156] - The maximum number of Class Z ordinary shares that can be issued under the Global Share Plan is 19,880,315 shares[158] - As of January 1, 2022, 810,905 Class Z ordinary shares were available for grant under the Global Share Plan, but no shares were granted during the reporting period[158] - As of December 31, 2022, 1,071,650 Class Z ordinary shares were available for issuance under the Global Share Plan, representing approximately 0.2% of the total issued Class Z ordinary shares[159] - Under the 2018 Share Incentive Plan, the maximum number of Class Z ordinary shares that can be issued is 30,673,710 shares, representing 10% of the total issued Class Z ordinary shares as of the effective date of the primary listing conversion[169] - As of January 1, 2022, 1,775,313 Class Z ordinary shares were available for grant under the 2018 Share Incentive Plan, and 7,796,003 shares were granted during the reporting period[169] - As of December 31, 2022, 28,706,326 Class Z ordinary shares were available for grant under the 2018 Share Incentive Plan[169] - During the reporting period, 1,821,824 Class Z ordinary share options were exercised by employee participants under the Global Share Plan[166] - As of December 31, 2022, 1,059,150 Class Z ordinary share options remained unexercised by employee participants under the Global Share Plan[166] - The Global Share Plan was terminated on the effective date of the primary listing conversion, and no further options will be granted under the plan[166] - The number of Z-class ordinary shares available for issuance under the 2018 Share Incentive Plan increased from 19,295,213 shares on January 1, 2022, to 22,806,162 shares on December 31, 2022, and further to 26,235,609 shares as of the latest practicable date, representing approximately 8.0% of the total issued Z-class ordinary shares[170] - During the reporting