Investment Rating - The report assigns a "Buy" rating to the company with a target price of $27.8, indicating a potential upside of 36% from the current price of $20.34 [1][7][13] Core Insights - The company achieved a significant revenue growth of 19% year-on-year, reaching 26.83 billion RMB in 2024, with Q4 revenue growing by 22% to 7.73 billion RMB. The growth was driven by high-margin businesses, particularly in advertising and gaming [3][11] - The user engagement metrics remain strong, with daily active users (DAU) at 103 million and monthly active users (MAU) at 340 million, indicating a thriving community ecosystem [7][13] - The gaming segment saw a remarkable 79% year-on-year growth in Q4, primarily due to the success of the game "Three Kingdoms: Strategy of the World," which has become a key revenue driver [5][12] Summary by Sections Financial Performance - Total revenue for 2024 was 26.83 billion RMB, with Q4 revenue at 7.73 billion RMB, reflecting a 22% increase year-on-year. The advertising segment contributed 23.9 billion RMB, growing by 24%, while gaming revenue reached 18.0 billion RMB, up 79% [3][11] - The gross profit margin improved significantly, reaching 36.1%, with a gross profit increase of 68% year-on-year [3][11] User Engagement - The platform's DAU and MAU were reported at 103 million and 340 million, respectively, with an average daily usage time of 99 minutes, showcasing robust user engagement [7][13] - The company has a stable membership retention rate of over 80%, indicating strong user loyalty [11] Future Outlook - The upcoming game "Jujutsu Kaisen: Phantom Night" is expected to boost gaming revenue further once it receives approval for domestic release. The existing game "Three Kingdoms: Strategy of the World" is anticipated to maintain high revenue levels in its new season [5][12][13] - The advertising revenue is projected to benefit from product optimization and the seasonal increase in demand during the Spring Festival [7][13]

Group 1 - Bilibili reported its first-ever quarterly profit, indicating a positive shift in its financial and operating metrics [1] - The sustainability of this profitability trend remains uncertain, but there are indications that the company's fundamentals may be improving [1] Group 2 - Astrada Advisors specializes in investment research across technology, media, internet, and consumer sectors in North America and Asia [1] - The firm focuses on identifying high-potential investments and navigating complex industries, leveraging extensive local and global experience [1] - Astrada Advisors aims to empower investors with timely research and a comprehensive view of industry dynamics, integrating rigorous fundamental analysis with data-driven insights [1]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Insights - The company reported better-than-expected performance in Q4 2024, with total revenue reaching 7.734 billion yuan, a year-on-year increase of 22% and a quarter-on-quarter increase of 6%, surpassing Bloomberg's consensus estimate of 7.639 billion yuan [3][9] - The advertising business is expected to continue its growth potential, with Q4 2024 advertising revenue of 2.389 billion yuan, up 24% year-on-year and 14% quarter-on-quarter. The company aims to consolidate its advertising budget in key industries while exploring new advertising demands from emerging sectors [3] - The gaming segment continues to operate with a long-term strategy, with Q4 2024 gaming revenue of 1.798 billion yuan, a year-on-year increase of 79%. The performance of the game "Three Kingdoms: Strategy" remains strong, and the company is focused on its long-term operation in the domestic market and overseas expansion [3] Summary by Relevant Sections Revenue and Profit Forecast - The company expects total revenue for 2025-2027 to be 29.858 billion yuan, 31.822 billion yuan, and 33.801 billion yuan respectively, with Non-GAAP net profits projected at 1.935 billion yuan, 3.027 billion yuan, and 4.201 billion yuan [3][10] - The current price-to-earnings (P/E) ratios for 2025-2027 are estimated at 36.02, 23.03, and 16.59 respectively, indicating a positive outlook for the company's profitability [3][10] Financial Metrics - The company achieved a gross margin of 36.1% in Q4 2024, an increase of 9.9 percentage points year-on-year and 1.2 percentage points quarter-on-quarter, benefiting from higher-margin game and advertising revenues [9] - The company anticipates that gross margins could reach 40-45% in the medium to long term, with further cost control expected to improve operating profit margins to 15-20% [9]

Investment Rating - The report maintains a "Buy" rating for the company, with an updated target price of $26.40 per ADS, up from the previous target of $22.00 [1][5][27]. Core Insights - The company reported a total revenue of RMB 77.3 billion for Q4 2024, a year-on-year increase of 22%, and an adjusted net profit of RMB 4.53 billion, surpassing expectations by 15% [1][2]. - The growth in revenue is primarily driven by strong performance in mobile gaming and advertising sectors, with mobile game revenue increasing by 79% year-on-year [2][3]. - The management has reiterated its long-term operating profit margin target of 15-20%, which is expected to boost investor confidence [1][3]. Summary by Sections Financial Performance - For FY24, total revenue is projected to grow by 19% to RMB 268 billion, with an adjusted net loss reduced by 99% to RMB 2.21 billion [1][4]. - The company expects Q1 2025 total revenue to increase by 22% year-on-year, with mobile gaming, advertising, and value-added services (VAS) revenues expected to grow by 73%, 19%, and 10% respectively [2][3]. Revenue Breakdown - VAS revenue grew by 8% to RMB 30.8 billion, accounting for 40% of total revenue in Q4 2024, driven by increased premium membership and fan payment revenues [2]. - Advertising revenue increased by 24% to RMB 23.9 billion, representing 31% of total revenue, attributed to strong growth in performance advertising [2]. - Mobile gaming revenue surged by 79% to RMB 18 billion, making up 23% of total revenue, mainly due to new contributions [2]. Profitability Metrics - Gross profit margin (GPM) improved by 10 percentage points to 36.1% in Q4 2024, while adjusted operating profit margin (OPM) rose by 17 percentage points to 6.0% [3]. - For Q1 2025, adjusted OPM is expected to grow by 12 percentage points to 3.3% despite content investments for the Spring Festival Gala [3]. Valuation and Estimates - The report provides a sum-of-the-parts (SOTP) valuation, estimating the advertising business at $1.05 billion, VAS at $800 million, and mobile gaming at $800 million, with a total valuation of approximately $8.06 billion [16][17]. - The projected revenue for FY25 is RMB 30.42 billion, with a gross profit margin of 37.3% and an adjusted net profit of RMB 1.75 billion [12][22].

Investment Rating - The report maintains a "BUY" rating for Bilibili, with a target price raised to US$26.4 from the previous US$22.0, indicating a potential upside of 19.4% from the current price of US$22.11 [3][11]. Core Insights - Bilibili's 4Q24 earnings exceeded expectations, driven by strong growth in mobile games and advertising, with total revenue increasing by 22% year-over-year to RMB7.73 billion [1][6]. - The company reported an adjusted net income of RMB453 million, a significant improvement from an adjusted net loss of RMB556 million in 4Q23, reflecting a narrowing of the adjusted net loss for FY24 to RMB22.1 million [1][2]. - Management has set a long-term operating profit margin (OPM) target of 15-20%, up from 6% in 4Q24, which is expected to enhance investor confidence [1][6]. Financial Performance Summary - For FY24, total revenue reached RMB26.8 billion, marking a 19% year-over-year growth, while the adjusted net loss narrowed by 99% year-over-year [1][2]. - Revenue projections for FY25E and FY26E are set at RMB30.4 billion and RMB32.6 billion, respectively, with expected growth rates of 13.4% and 7.1% [2][7]. - The gross margin is anticipated to improve to 37.3% in FY25E, with adjusted net profit expected to reach RMB1.75 billion [2][7]. Revenue Breakdown - The revenue from mobile games surged by 79% year-over-year to RMB1.80 billion in 4Q24, contributing 23% to total revenue [6]. - Advertising revenue grew by 24% year-over-year to RMB2.39 billion, driven by a 40% increase in performance ad revenues and a 30% rise in the number of advertisers [6]. - Value-added services (VAS) revenue increased by 8% year-over-year to RMB3.08 billion, accounting for 40% of total revenue, supported by premium membership and the Fan Charging program [6]. Margin and Profitability Outlook - The gross profit margin (GPM) improved by 10 percentage points year-over-year to 36.1% in 4Q24, with adjusted operating profit margin (OPM) rising by 17 percentage points to 6.0% [6]. - For FY25E, the adjusted OPM is expected to expand to 5.8%, with long-term targets set at 40-45% for GPM and 15-20% for OPM [6][11]. Valuation Metrics - The SOTP valuation indicates a target price of US$26.4 per ADS, with the advertising business valued at US$10.5, VAS at US$8.0, and mobile games at US$8.0 [11][12]. - The report highlights that the target price reflects a 2.6x price-to-sales (P/S) ratio for 2025E [11].

Operational & User Growth - Bilibili's MAUs reached 340 million[5], DAUs reached 103 million[5] in Q4 2024 - Average daily time spent per user reached 99 minutes[5] in Q4 2024 - DAUs increased from 54 million in Q4 2020 to 103 million in Q4 2024[7] Financial Performance - Bilibili's total net revenues reached RMB 26832 million in 2024, a 19% year-over-year increase[62] - Gross profit increased by 61% year-over-year, reaching RMB 8774 million in 2024[78] - Advertising revenues increased by 28% year-over-year, reaching RMB 8189 million in 2024[49] - Mobile game revenues increased by 40% year-over-year, reaching RMB 5610 million in 2024[58] - Bilibili achieved a gross profit margin of 361% in Q4 2024[10] Community & Content - Approximately 40% of DAUs viewed video and live commerce related content[16] - Over 31 million content creators received income on Bilibili in 2024[25] - Total GMV from video and live commerce increased by over 150% year-over-year in 2024[46]

Bilibili, Inc. (NASDAQ:BILI) Q4 2024 Earnings Conference Call February 20, 2025 7:00 AM ET Company Participants Juliet Yang - Executive Director, IR Rui Chen - Chairman & CEO Sam Fan - CFO Conference Call Participants Lincoln Kong - Goldman Sachs Felix Liu - UBS Wei Fang - Mizuho Lei Zhang - Bank of America Merrill Lynch Operator Good day, and welcome to the Bilibili Fourth Quarter and Fiscal Year 2024 Financial Results and Business Update Conference Call. Today's conference call is being recorded. At this ...

Financial Data and Key Metrics Changes - Total revenues for Q4 2024 were RMB 7.7 billion, reflecting a year-over-year increase of 22%, while full-year revenues reached RMB 26.8 billion, up 19% year-over-year [8][37] - The company achieved its first GAAP net profit in Q4, amounting to RMB 89 million, with an adjusted net profit of RMB 452 million [9][40] - Gross profit margin improved to 36.1% in Q4, up from 26.1% in the same period last year, contributing to a 68% year-over-year growth in gross profit [9][38] Business Line Data and Key Metrics Changes - Advertising revenues increased by 24% year-over-year in Q4 to RMB 2.4 billion, and for the full year, it grew by 28% to RMB 8.2 billion [22][64] - Mobile games revenues surged by 79% year-over-year in Q4 to RMB 1.8 billion, and for the full year, it increased by 40% to RMB 5.6 billion [27][38] - VAS revenues rose by 8% in Q4 to RMB 3.1 billion and by 11% for the full year to RMB 11 billion [30][38] Market Data and Key Metrics Changes - Daily Active Users (DAUs) reached 103 million, and Monthly Active Users (MAUs) were 340 million, with users spending an average of 99 minutes daily on the platform [10][18] - The user base represents nearly 70% of China's Gen Z population, with an average age of 25, indicating a strong consumer demographic [10][66] Company Strategy and Development Direction - The company aims to leverage high-quality content and community engagement as core pillars for growth, focusing on expanding its commercialization efforts [13][34] - Bilibili plans to explore AI advancements to enhance its content offerings and improve user engagement, positioning itself to capitalize on emerging technologies [11][58] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the advertising business growth in 2025, expecting to maintain above-industry growth rates [24][74] - The company is committed to enhancing its advertising infrastructure and product offerings to drive efficiency and attract more advertisers [68][74] Other Important Information - The company successfully partnered with CCTV for the Spring Festival Gala, resulting in a 20% increase in DAUs during the event [96][101] - A share repurchase program of up to USD 200 million was announced, reflecting confidence in the company's cash flow generation [42][43] Q&A Session Summary Question: What is the overall strategy for 2025 after reaching breakeven? - Management highlighted the focus on content and community, aiming for sustainable growth and profitability while leveraging high-quality content as a core strategy [47][49] Question: Can you elaborate on the drivers for strong advertisement growth in 2024? - The advertising revenue growth was attributed to a high-quality user base and strong content offerings, with performance-based ads seeing over 40% growth [64][66] Question: What are the expectations for gross and net margins in 2025? - Management expects continued gross margin expansion, targeting a long-term gross margin of 40% to 45% [79][80] Question: How will the company expand its user base and enhance brand awareness? - The partnership with CCTV and similar projects are seen as key strategies to attract new users and improve brand equity [94][102]

Financial Performance - Bilibili reported quarterly earnings of $0.15 per share, exceeding the Zacks Consensus Estimate of $0.14 per share, compared to a loss of $0.19 per share a year ago, representing an earnings surprise of 7.14% [1] - The company posted revenues of $1.08 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 2.12%, and showing an increase from year-ago revenues of $881.13 million [2] Stock Performance - Bilibili shares have increased approximately 12.3% since the beginning of the year, outperforming the S&P 500's gain of 4.5% [3] - The current consensus EPS estimate for the upcoming quarter is $0.09 on revenues of $966.81 million, and for the current fiscal year, it is $0.54 on revenues of $4.17 billion [7] Industry Outlook - The Broadcast Radio and Television industry, to which Bilibili belongs, is currently ranked in the top 29% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8] - Cumulus Media, another company in the same industry, is expected to report a quarterly loss of $0.58 per share, reflecting a year-over-year change of +77.7%, with revenues anticipated to be $218.8 million, down 1.1% from the previous year [9][10]

Core Insights - Bilibili achieved its first quarter of GAAP profitability in Q4 2024, marking a significant milestone for the company [3] - The company reported a total net revenue of RMB 26.83 billion (US$3.68 billion) for the fiscal year 2024, representing a 19% year-over-year increase [5][17] - Daily active users (DAUs) reached 103 million, while monthly active users (MAUs) were 340 million, with users spending an average of 99 minutes daily on the platform [3] Financial Performance - In Q4 2024, total net revenues were RMB 7.73 billion (US$1,059.6 million), a 22% increase from Q4 2023 [4][5] - Advertising revenues in Q4 2024 were RMB 2.39 billion (US$327.2 million), up 24% year-over-year, driven by improved advertising efficiency [6][17] - Mobile games revenues surged to RMB 1.80 billion (US$246.3 million) in Q4 2024, reflecting a 79% increase from the same period last year [7] - Gross profit for Q4 2024 was RMB 2.79 billion (US$382.0 million), a 68% increase year-over-year, with a gross profit margin of 36.1% [10][14] Cost and Expenses - Total operating expenses decreased by 10% year-over-year to RMB 2.66 billion (US$364.7 million) in Q4 2024 [10] - Research and development expenses fell by 31% year-over-year to RMB 919.3 million (US$125.9 million) due to one-off termination expenses from previous projects [12][23] - Sales and marketing expenses increased by 10% year-over-year to RMB 1.24 billion (US$169.4 million) [11] Profitability Metrics - The company reported a net profit of RMB 88.9 million (US$12.2 million) for Q4 2024, compared to a net loss of RMB 1.30 billion in the same period last year [14][25] - Adjusted net profit for Q4 2024 was RMB 452.0 million (US$61.9 million), a significant improvement from an adjusted net loss of RMB 555.8 million in Q4 2023 [14][30] - For the full year 2024, the net loss narrowed by 72% to RMB 1.36 billion (US$186.8 million) [25] Shareholder Returns - The company repurchased approximately US$864.8 million worth of outstanding ADSs and convertible senior notes during 2024 [3] - A share repurchase program of up to US$200 million was approved by the board, with US$16.4 million repurchased by the end of 2024 [28] Cash Flow and Liquidity - Operating cash flow for the full year 2024 was RMB 6.01 billion (US$824.0 million), compared to RMB 266.6 million in 2023 [16][26] - As of December 31, 2024, Bilibili had cash and cash equivalents totaling RMB 16.54 billion (US$2.27 billion) [27]