[Executive Summary](index=1&type=section&id=1.%20Executive%20Summary) [Third Quarter 2023 Highlights](index=1&type=section&id=1.1%20Third%20Quarter%202023%20Highlights) Bilibili reported flat total net revenues year-over-year but significant improvements in gross profit and a narrowing of net loss and adjusted net loss, with strong user growth as DAUs surpassed 100 million | Metric | Q3 2023 (RMB) | YoY Change | | :----- | :------------ | :--------- | | Total Net Revenues | 5.8 billion | Flat | | Advertising Revenues | 1.6 billion | +21% | | Gross Profit | 1.5 billion | +38% | | Gross Profit Margin | 25.0% | vs 18.2% in Q3 2022 | | Net Loss | 1.3 billion | Narrowed by 22% | | Adjusted Net Loss | 863.5 million | Narrowed by 51% | | Average Daily Active Users (DAUs) | 102.8 million | +14% | [Management Commentary](index=1&type=section&id=1.2%20Management%20Commentary) CEO Rui Chen highlighted strong user growth and engagement, with DAUs exceeding 100 million and average daily time spent reaching a historical high of 100 minutes, while CFO Sam Fan emphasized improved gross profit margin, controlled operating expenses, and positive operating cash flow, signaling a positive operational cycle - DAUs surpassed **100 million**, a **14% YoY increase**[3](index=3&type=chunk) - Users' average daily time spent reached a historical high of **100 minutes**, boosting total user time spent by **19% year-over-year**[3](index=3&type=chunk) - Advertising and value-added services revenues increased by **21%** and **17% year-over-year**, respectively, driven by enhanced commercialization efficiency[3](index=3&type=chunk) - Gross profit margin improved from **18% to 25% year-over-year**, with gross profit growing by **38%**[3](index=3&type=chunk) - Total operating expenses decreased by **12% year-over-year**, and adjusted net loss narrowed by **51% year-over-year**[3](index=3&type=chunk) - Operating cash flow turned **positive in Q3**, indicating a positive operational cycle[3](index=3&type=chunk) [Third Quarter 2023 Financial Results](index=1&type=section&id=2.%20Third%20Quarter%202023%20Financial%20Results) [Total Net Revenues](index=1&type=section&id=2.1%20Total%20Net%20Revenues) Total net revenues for Q3 2023 were RMB5.8 billion (US$795.7 million), remaining flat compared to the same period in 2022 | Metric | Q3 2023 (RMB) | Q3 2022 (RMB) | YoY Change | | :----- | :------------ | :------------ | :--------- | | Total Net Revenues | 5.8 billion | 5.79 billion | Flat | [Revenue by Segment](index=1&type=section&id=2.2%20Revenue%20by%20Segment) Value-added services and advertising revenues showed strong growth, increasing by 17% and 21% respectively, while mobile games and IP derivatives revenues experienced declines, with mobile games down 33% YoY due to a high base and new game performance [Value-added Services (VAS)](index=1&type=section&id=2.2.1%20Value-added%20Services%20%28VAS%29) | Metric | Q3 2023 (RMB) | Q3 2022 (RMB) | YoY Change | | :----- | :------------ | :------------ | :--------- | | VAS Revenues | 2.6 billion | 2.21 billion | +17% | [Advertising](index=1&type=section&id=2.2.2%20Advertising) | Metric | Q3 2023 (RMB) | Q3 2022 (RMB) | YoY Change | | :----- | :------------ | :------------ | :--------- | | Advertising Revenues | 1.6 billion | 1.35 billion | +21% | [Mobile Games](index=2&type=section&id=2.2.3%20Mobile%20Games) | Metric | Q3 2023 (RMB) | Q3 2022 (RMB) | YoY Change | QoQ Change | | :----- | :------------ | :------------ | :--------- | :--------- | | Mobile Games Revenues | 991.8 million | 1.47 billion | -33% | +11% | - Year-over-year decrease was mainly due to the high base from the release of Space Hunter 3 in June 2022, as well as lower-than-expected revenues from certain new games in the third quarter of 2023[6](index=6&type=chunk) [IP Derivatives and Others](index=2&type=section&id=2.2.4%20IP%20Derivatives%20and%20Others) | Metric | Q3 2023 (RMB) | Q3 2022 (RMB) | YoY Change | | :----- | :------------ | :------------ | :--------- | | IP Derivatives & Others Revenues | 580.0 million | 757.8 million | -23% | [Cost of Revenues and Gross Profit](index=2&type=section&id=2.3%20Cost%20of%20Revenues%20and%20Gross%20Profit) Cost of revenues decreased by 8% year-over-year due to effective cost control, leading to a 38% increase in gross profit to RMB1.5 billion and an improved gross profit margin of 25.0% | Metric | Q3 2023 (RMB) | Q3 2022 (RMB) | YoY Change | | :----- | :------------ | :------------ | :--------- | | Cost of Revenues | 4.4 billion | 4.74 billion | -8% | | Gross Profit | 1.5 billion | 1.05 billion | +38% | | Gross Profit Margin | 25.0% | 18.2% | +6.8 ppts | - The decrease in cost of revenues was mainly due to lower content costs, server and bandwidth costs, and other costs, led by effective cost control[7](index=7&type=chunk) [Operating Expenses](index=2&type=section&id=2.4%20Operating%20Expenses) Total operating expenses decreased by 12% year-over-year, with reductions across sales and marketing, general and administrative, and research and development expenses, reflecting the company's cost control efforts [Sales and Marketing Expenses](index=2&type=section&id=2.4.1%20Sales%20and%20Marketing%20Expenses) | Metric | Q3 2023 (RMB) | Q3 2022 (RMB) | YoY Change | | :----- | :------------ | :------------ | :--------- | | Sales & Marketing Expenses | 992.3 million | 1.23 billion | -19% | [General and Administrative Expenses](index=2&type=section&id=2.4.2%20General%20and%20Administrative%20Expenses) | Metric | Q3 2023 (RMB) | Q3 2022 (RMB) | YoY Change | | :----- | :------------ | :------------ | :--------- | | G&A Expenses | 499.1 million | 543.4 million | -8% | [Research and Development Expenses](index=2&type=section&id=2.4.3%20Research%20and%20Development%20Expenses) | Metric | Q3 2023 (RMB) | Q3 2022 (RMB) | YoY Change | | :----- | :------------ | :------------ | :--------- | | R&D Expenses | 1.1 billion | 1.13 billion | -6% | [Operating Loss and Net Loss](index=2&type=section&id=2.5%20Operating%20Loss%20and%20Net%20Loss) Loss from operations narrowed by 40% year-over-year to RMB1.1 billion, net loss also narrowed by 22% to RMB1.3 billion, and adjusted net loss significantly narrowed by 51% to RMB863.5 million, reflecting improved operational efficiency and cost control | Metric | Q3 2023 (RMB) | Q3 2022 (RMB) | YoY Change | | :----- | :------------ | :------------ | :--------- | | Loss from Operations | (1.1 billion) | (1.85 billion) | Narrowed by 40% | | Adjusted Loss from Operations | (755.4 million) | (1.55 billion) | Narrowed by 51% | | Net Loss | (1.3 billion) | (1.72 billion) | Narrowed by 22% | | Adjusted Net Loss | (863.5 million) | (1.77 billion) | Narrowed by 51% | [Other Income and Expenses](index=2&type=section&id=2.6%20Other%20Income%20and%20Expenses) The company reported a total investment loss of RMB245.0 million in Q3 2023, a significant change from an income of RMB178.6 million in Q3 2022, primarily due to fair value changes in investments in publicly traded companies | Metric | Q3 2023 (RMB) | Q3 2022 (RMB) | Change | | :----- | :------------ | :------------ | :----- | | Investment Income/(Loss), net | (245.0 million) | 178.6 million | (423.6 million) | | Fair Value Change in Investments | (137.4 million) | 343.0 million | (480.4 million) | [Earnings Per Share (EPS)](index=3&type=section&id=2.7%20Earnings%20Per%20Share%20%28EPS%29) Basic and diluted net loss per share improved to RMB3.26, down from RMB4.34 in Q3 2022, with adjusted basic and diluted net loss per share also improving significantly to RMB2.12 from RMB4.46 | Metric | Q3 2023 (RMB) | Q3 2022 (RMB) | Change | | :----- | :------------ | :------------ | :----- | | Basic & Diluted Net Loss per Share | (3.26) | (4.34) | Improved by 25% | | Adjusted Basic & Diluted Net Loss per Share | (2.12) | (4.46) | Improved by 52% | [Cash and Investments](index=3&type=section&id=2.8%20Cash%20and%20Investments) As of September 30, 2023, Bilibili held RMB14.5 billion (US$2.0 billion) in cash and cash equivalents, time deposits, and short-term investments | Metric | As of Sep 30, 2023 (RMB) | As of Dec 31, 2022 (RMB) | Change | | :----- | :----------------------- | :----------------------- | :----- | | Cash & Cash Equivalents, Time Deposits, Short-term Investments | 14.5 billion | 19.56 billion | -25.9% | [Corporate Financial Activities](index=3&type=section&id=3.%20Corporate%20Financial%20Activities) [Repurchase of Convertible Senior Notes](index=3&type=section&id=3.1%20Repurchase%20of%20Convertible%20Senior%20Notes) In Q3 2023, Bilibili repurchased US$14.5 million (RMB104.0 million) of December 2026 Notes for US$13.0 million (RMB93.3 million) cash, with the aggregate outstanding principal amount of convertible senior notes as of September 30, 2023, being US$861.8 million (RMB6.3 billion) - Repurchased an aggregate principal amount of **US$14.5 million (RMB104.0 million)** December 2026 Notes[13](index=13&type=chunk) - Aggregate cash consideration for the repurchase was **US$13.0 million (RMB93.3 million)**[13](index=13&type=chunk) - As of September 30, 2023, the aggregate outstanding principal amount of April 2026 Notes, 2027 Notes and December 2026 Notes was **US$861.8 million (RMB6.3 billion)**[13](index=13&type=chunk) [Outlook](index=3&type=section&id=4.%20Outlook) For the full year 2023, Bilibili expects total net revenues to be at the low-end of the RMB22.5 billion to RMB23.5 billion range, primarily due to lower-than-expected mobile game revenues - For the full year of 2023, total net revenues are expected to be at the low-end of the **RMB22.5 billion to RMB23.5 billion range**[14](index=14&type=chunk) - The revised outlook is primarily due to lower-than-expected mobile game revenues[14](index=14&type=chunk) [Conference Call Information](index=4&type=section&id=5.%20Conference%20Call%20Information) Bilibili's management will host an earnings conference call on November 29, 2023, at 7:00 AM U.S. Eastern Time, with participants required to register online to receive dial-in numbers and a personal PIN, and a live webcast and replay available on the company's investor relations website - Earnings conference call scheduled for **November 29, 2023, at 7:00 AM U.S. Eastern Time** (8:00 PM Beijing/Hong Kong Time)[15](index=15&type=chunk) - Participants are required to register online in advance to receive dial-in numbers and a personal PIN[15](index=15&type=chunk) - A live webcast and replay will be available on Bilibili's investor relations website (https://ir.bilibili.com/)[15](index=15&type=chunk) [Company Overview](index=4&type=section&id=6.%20Company%20Overview) [About Bilibili Inc.](index=4&type=section&id=6.1%20About%20Bilibili%20Inc.) Bilibili is an iconic brand and a leading video community in China, dedicated to enriching the lives of young generations, offering a wide array of video-based content, fostering a strong community, and pioneering the 'bullet chatting' feature - Bilibili is an iconic brand and a leading video community for young generations in China[16](index=16&type=chunk) - Mission: to enrich the everyday lives of young generations in China[16](index=16&type=chunk) - Value proposition: 'All the Videos You Like'[16](index=16&type=chunk) - Pioneered the 'bullet chatting' feature, a live comment function that transforms user viewing experience[16](index=16&type=chunk) [Non-GAAP Financial Measures](index=4&type=section&id=7.%20Non-GAAP%20Financial%20Measures) [Use of Non-GAAP Financial Measures](index=4&type=section&id=7.1%20Use%20of%20Non-GAAP%20Financial%20Measures) Bilibili uses non-GAAP measures (adjusted loss from operations, adjusted net loss, adjusted EPS) to evaluate operating results and for decision-making, excluding items like share-based compensation, amortization of acquired intangibles, fair value changes in investments, and organizational optimization expenses, to provide a clearer view of underlying business trends - The Company uses non-GAAP measures (**adjusted loss from operations, adjusted net loss, and adjusted net loss per share**) for evaluating operating results and financial/operational decision-making[17](index=17&type=chunk) - Non-GAAP measures exclude share-based compensation, amortization expense related to intangible assets acquired through business acquisitions, income tax related to acquired intangible assets, gain/loss on fair value change in investments in publicly traded companies, gain/loss on repurchase of convertible senior notes, expenses related to organizational optimization, and termination expenses of certain game projects[17](index=17&type=chunk)[18](index=18&type=chunk) - The purpose is to help identify underlying trends, provide useful information, enhance understanding of past performance and future prospects, and allow for greater visibility into key metrics[17](index=17&type=chunk) [Legal and Supplementary Information](index=5&type=section&id=8.%20Legal%20and%20Supplementary%20Information) [Exchange Rate Information](index=5&type=section&id=8.1%20Exchange%20Rate%20Information) The report translates RMB amounts to US dollars at a rate of RMB7.2960 to US$1.00, based on the exchange rate on September 29, 2023, for convenience only - Translations of RMB amounts into US$ are provided at a rate of **RMB7.2960 to US$1.00**[19](index=19&type=chunk) - The exchange rate is based on **September 29, 2023**, as set forth in the H.10 statistical release of the Federal Reserve Board[19](index=19&type=chunk) - Translations are solely for the convenience of the reader, and the Company makes no representation that amounts could be converted at any particular rate or at all[19](index=19&type=chunk) [Safe Harbor Statement](index=5&type=section&id=8.2%20Safe%20Harbor%20Statement) This section contains forward-looking statements subject to risks and uncertainties, including operational results, financial condition, strategies, user growth, competition, cost management, and regulatory policies, with the company undertaking no duty to update this information - The announcement contains forward-looking statements made under the 'safe harbor' provisions of the U.S. Private Securities Litigation Reform Act of 1995[20](index=20&type=chunk) - These statements involve inherent risks and uncertainties, and actual results could differ materially due to various factors[20](index=20&type=chunk) - Factors include results of operations, financial condition, strategies, user growth, content quality, competition, cost management, and PRC governmental policies and regulations[20](index=20&type=chunk) - The Company undertakes no duty to update such information, except as required under applicable law[20](index=20&type=chunk) [Investor Relations Contact](index=6&type=section&id=9.%20Investor%20Relations%20Contact) Provides contact information for investor and media inquiries in China and the United States - Contact details for Bilibili Inc. (Juliet Yang) and Piacente Financial Communications (Helen Wu in China, Brandi Piacente in US) are provided for investor and media inquiries[21](index=21&type=chunk) [Unaudited Financial Statements](index=7&type=section&id=10.%20Unaudited%20Financial%20Statements) [Condensed Consolidated Statements of Operations](index=7&type=section&id=10.1%20Condensed%20Consolidated%20Statements%20of%20Operations) Presents the unaudited condensed consolidated statements of operations for the three and nine months ended September 30, 2023, detailing revenues by segment, cost of revenues, operating expenses, and net loss | Metric (RMB thousands) | Q3 2022 | Q2 2023 | Q3 2023 | 9M 2022 | 9M 2023 | | :--------------------- | :------ | :------ | :------ | :------ | :------ | | Total Net Revenues | 5,793,651 | 5,304,199 | 5,805,081 | 15,756,681 | 16,178,891 | | Gross Profit | 1,054,216 | 1,227,534 | 1,450,417 | 2,599,742 | 3,781,883 | | Total Operating Expenses | (2,903,084) | (2,505,217) | (2,557,590) | (8,630,484) | (7,541,400) | | Loss from Operations | (1,848,868) | (1,277,683) | (1,107,173) | (6,030,742) | (3,759,517) | | Net Loss | (1,716,040) | (1,548,132) | (1,337,246) | (6,010,617) | (3,515,023) | | Net Loss per Share, Basic | (4.34) | (3.74) | (3.26) | (15.22) | (8.54) | [Notes to Unaudited Financial Information](index=8&type=section&id=10.2%20Notes%20to%20Unaudited%20Financial%20Information) Provides a breakdown of share-based compensation expenses included in cost of revenues and operating expenses for the three and nine months ended September 30, 2023 | Share-based Compensation (RMB thousands) | Q3 2022 | Q2 2023 | Q3 2023 | 9M 2022 | 9M 2023 | | :--------------------------------------- | :------ | :------ | :------ | :------ | :------ | | Cost of revenues | 16,076 | 17,440 | 18,808 | 54,188 | 48,710 | | Sales and marketing expenses | 15,295 | 14,662 | 13,523 | 41,226 | 42,689 | | General and administrative expenses | 135,420 | 153,597 | 155,511 | 418,295 | 446,724 | | Research and development expenses | 84,537 | 115,115 | 116,195 | 272,179 | 327,462 | | **Total** | **251,328** | **300,814** | **304,037** | **785,888** | **865,585** | [Condensed Consolidated Balance Sheets](index=9&type=section&id=10.3%20Condensed%20Consolidated%20Balance%20Sheets) Presents the unaudited condensed consolidated balance sheets as of December 31, 2022, and September 30, 2023, detailing assets, liabilities, and shareholders' equity | Metric (RMB thousands) | Dec 31, 2022 | Sep 30, 2023 | | :--------------------- | :----------- | :----------- | | Total Assets | 41,830,570 | 33,895,233 | | Total Liabilities | 26,590,983 | 18,420,210 | | Total Shareholders' Equity | 15,239,587 | 15,475,023 | | Cash and Cash Equivalents | 10,172,584 | 7,639,889 | | Short-term Investments | 4,623,452 | 2,469,203 | | Long-term Debt | 8,683,150 | 3,076,494 | [Reconciliations of GAAP and Non-GAAP Results](index=10&type=section&id=10.4%20Reconciliations%20of%20GAAP%20and%20Non-GAAP%20Results) Provides detailed reconciliations of GAAP loss from operations and net loss to their respective non-GAAP adjusted measures, outlining the specific adjustments made for share-based compensation, amortization, fair value changes, and other non-recurring items | Metric (RMB thousands) | Q3 2022 | Q2 2023 | Q3 2023 | 9M 2022 | 9M 2023 | | :--------------------- | :------ | :------ | :------ | :------ | :------ | | Loss from operations (GAAP) | (1,848,868) | (1,277,683) | (1,107,173) | (6,030,742) | (3,759,517) | | Add: Share-based compensation expenses | 251,328 | 300,814 | 304,037 | 785,888 | 865,585 | | Add: Amortization expense related to intangible assets acquired through business acquisitions | 48,151 | 48,151 | 47,734 | 144,486 | 144,036 | | **Adjusted loss from operations (Non-GAAP)** | **(1,549,389)** | **(928,718)** | **(755,402)** | **(4,901,664)** | **(2,749,896)** | | Net loss (GAAP) | (1,716,040) | (1,548,132) | (1,337,246) | (6,010,617) | (3,515,023) | | Add: Share-based compensation expenses | 251,328 | 300,814 | 304,037 | 785,888 | 865,585 | | Add: Amortization expense related to intangible assets acquired through business acquisitions | 48,151 | 48,151 | 47,734 | 144,486 | 144,036 | | Add: (Gain)/Loss on fair value change in investments in publicly traded companies | (342,952) | 186,687 | 137,358 | (7,023) | (43,875) | | **Adjusted net loss (Non-GAAP)** | **(1,765,138)** | **(964,062)** | **(863,451)** | **(5,387,986)** | **(2,858,303)** | | Adjusted net loss per share, basic | (4.46) | (2.33) | (2.12) | (13.64) | (6.95) |

Financial Performance - Net revenue for the six months ended June 30, 2023, was RMB 10,373.81 million, representing a 4.1% increase compared to RMB 9,963.03 million in the same period of 2022[5]. - Gross profit for the same period increased by 50.9% to RMB 2,331.47 million, up from RMB 1,545.53 million in 2022[5]. - The net loss attributable to shareholders decreased by 49.3% to RMB 2,174.39 million, compared to RMB 4,288.91 million in the prior year[5]. - Adjusted net loss for the six months ended June 30, 2023, was RMB 1,994.85 million, a reduction of 44.9% from RMB 3,622.85 million in 2022[5]. - Operating loss narrowed to RMB 2.7 billion, down 37% from RMB 4.2 billion in the previous year[44]. - Net loss for the period was RMB 2.2 billion, a 49% reduction from RMB 4.3 billion in the same period of 2022[47]. - The company reported a significant reduction in pre-tax loss, which decreased by 49.9% to RMB 2,122.19 million from RMB 4,237.98 million in the previous year[5]. Revenue Breakdown - In the first half of 2023, Bilibili's advertising revenue increased by 29% year-over-year, reaching RMB 2.8 billion, while live streaming revenue grew by 23%[23]. - Revenue from value-added services reached RMB 4.5 billion, a 7% increase year-over-year, driven by live streaming[21]. - Advertising revenue increased by 29% to RMB 2.8 billion, compared to RMB 2.2 billion in the previous year, attributed to optimization of advertising products and improved efficiency[34]. - Mobile game service revenue decreased by 16% year-over-year to RMB 2 billion, primarily due to a lack of new game launches[24]. User Engagement - Daily active users (DAUs) grew by 17% year-over-year, exceeding 95 million, with a monthly active user (MAU) count of 319 million[14]. - The average daily video views increased by 34% year-over-year to 4.1 billion, with Story Mode views rising by 78%[16]. - The number of active content creators on the platform increased by 30% year-over-year, with monthly video submissions up by 61%[17]. - The core user base, defined as official members, grew by 26% year-over-year to 214 million, maintaining a retention rate of approximately 80%[19]. Asset and Liability Management - Total current assets decreased by 23.5% to RMB 18,710.69 million as of June 30, 2023, down from RMB 24,452.89 million at the end of 2022[5]. - Total liabilities decreased by 30.9% to RMB 18,362.68 million, compared to RMB 26,590.98 million at the end of 2022[5]. - Total assets as of June 30, 2023, were RMB 34,895.36 million, reflecting a 16.6% decrease from RMB 41,830.57 million at the end of 2022[5]. - Cash and cash equivalents decreased by 27% to RMB 14.3 billion as of June 30, 2023, primarily due to the repurchase of 2027 notes for a total cash consideration of USD 745.9 million (RMB 5.3 billion)[48]. Corporate Governance - The company has complied with all provisions of the Corporate Governance Code during the reporting period, except for the recommendation regarding the separation of the roles of Chairman and CEO[65]. - The audit committee has reviewed the unaudited interim results for the six months ended June 30, 2023, and met with independent auditor PwC[72]. - The company has adopted a code to regulate securities trading by directors and relevant employees, ensuring compliance with the standards set forth in the Listing Rules[68]. - The nomination and corporate governance committee consists of independent non-executive directors and has discussed the adequacy and effectiveness of accounting and internal control policies[74]. Shareholder Information - As of June 30, 2023, Chen Rui holds 49,299,006 shares of Class Y common stock, representing 58.89% ownership[80]. - Li Ni owns 7,200,000 shares of Class Y common stock, accounting for 8.60% of the total[80]. - Tencent holds 43,749,518 shares of Class Z common stock, representing 13.20% ownership[85]. - The total issued shares as of June 30, 2023, include 83,715,114 shares of Class Y and 327,376,931 shares of Class Z[85]. Future Plans and Investments - The company plans to focus on increasing advertising and live streaming revenue while controlling costs to further narrow losses and achieve healthy growth in daily active users[29]. - The company has no detailed future plans for significant investments or capital assets as of June 30, 2023[54]. - The company plans to fully utilize the net proceeds within three years as per the intended use disclosed in the prospectus[103]. Cash Flow and Financing - Cash used in operating activities for the first half of 2023 was RMB 651,158 thousand, significantly reduced from RMB 2,104,516 thousand in the same period of 2022, indicating improved cash flow management[135]. - The company believes that its cash and cash equivalents, along with operating cash flow, are sufficient to meet cash requirements for at least the next twelve months[150]. - The company continues to rely on external financing to support its operations and business development[150]. Compliance and Reporting - The financial statements are prepared in accordance with US GAAP and the Hong Kong Listing Rules, ensuring compliance with applicable accounting standards[152]. - The company has confirmed compliance with the code by all directors and relevant employees during the reporting period[69].

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]