2023-06-01 16:00Bilibili Inc. First Quarter 2023 Financial Results First Quarter 2023 Highlights and Management Commentary 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 Detailed Financial Results 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 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 - Cost of revenues decreased by 7% YoY to RMB 4.0 billion, primarily due to lower revenue-sharing, server, and bandwidth costs5 - Total operating expenses fell 11% YoY to RMB 2.5 billion, driven by a significant 30% YoY decrease in Sales and Marketing expenses6 Profitability and EPS - Loss from operations narrowed by 31% YoY to RMB 1.4 billion8 - Net loss significantly narrowed by 72% YoY to RMB 629.6 million, while adjusted net loss narrowed by 38% YoY to RMB 1.0 billion89 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 Capital Management and Corporate Updates 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, 202310 - 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 Notes11 - The company released its 2022 annual ESG report in April 2023, highlighting its commitment to sustainable development14 - The full-year 2023 net revenue outlook is maintained at between RMB 24.0 billion and RMB 26.0 billion15 Unaudited Financial Statements Unaudited Condensed Consolidated Statements of Operations 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 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 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) |