Financial Data and Key Metrics Changes - Total net revenues grew 5% year-over-year to RMB 7.7 billion, with gross profit increasing 11% year-over-year to RMB 2.8 billion [6][22] - Gross margin expanded to 36.7%, marking the 13th consecutive quarter of growth [6][23] - Non-GAAP operating profit surged 153% year-over-year, while non-GAAP net profit increased 233% year-over-year, reaching RMB 469 million [6][24] Business Line Data and Key Metrics Changes - Monthly paying users reached a record high of 35 million, up 17% year-over-year [5][36] - Advertising revenue grew 23% year-over-year to RMB 2.6 billion, driven by improved ad targeting and recommendation efficiency [6][13] - Game revenues were RMB 1.5 billion, down 17% year-over-year, primarily due to a high base from the previous year [6][15] Market Data and Key Metrics Changes - Daily active users (DAUs) rose 9% year-over-year to 117 million, while monthly active users (MAUs) grew 8% to 376 million [4][6] - Average daily time spent per user increased to 112 minutes, up 6 minutes from the same period last year [4][8] - Watch time for mid-to-long-form videos increased by 20% year-over-year [9][10] Company Strategy and Development Direction - The company aims to empower its unique PUGV community and strengthen commercialization capabilities while sustaining profitability [8][20] - AI is becoming a key enabler for future growth, with plans to launch several AI-powered applications [7][8] - The focus remains on high-quality content and community engagement to drive sustainable growth [20][31] Management's Comments on Operating Environment and Future Outlook - Management highlighted the rising demand for high-quality content and the unique community aspect as key growth drivers [5][36] - The company expects continued improvement in gross and net margins, targeting a gross profit margin of 40-45% in the midterm [80][81] - Management remains optimistic about the advertising business, anticipating substantial growth potential in various verticals [66][76] Other Important Information - The company has repurchased a total of 6.4 million shares at a cost of $116.4 million, with $83.6 million remaining for future buybacks [24][82] - Bilibili received an A rating from MSCI ESG, reflecting its commitment to creating a positive impact through technology and culture [20] Q&A Session Summary Question: Can management share more about the drivers behind user growth and engagement? - Management attributed user growth to a focus on high-quality content and a unique community that supports content discovery and creator engagement [29][33] Question: What are the future plans for the gaming business? - Management highlighted the success of "Escape from Duck Hof: Tao Li Ya Ke Fu," which sold over 3 million copies globally, and discussed plans for mobile and console adaptations [44][50] Question: How does management see the growth potential in the ad business? - Management noted that advertising revenue grew 23% year-over-year, with a focus on enhancing ad targeting and expanding into new verticals [58][66] Question: What are the expectations for gross and net margins moving forward? - Management expects gross profit margins to reach 37% in Q4 and maintains a midterm target of 40-45% [80][81] Question: What is the company's outlook on AI applications? - Management believes AI will enhance content creation efficiency and improve the quality of videos produced on the platform [90][91]

Financial Data and Key Metrics Changes - Total revenues increased by 24% year over year to RMB 7 billion, driven by strong performances in advertising and game businesses [5][26] - Gross profit rose by 58% year over year, with gross profit margin expanding to 36.3%, up from 28.3% in the same period last year [6][27] - Adjusted net profit was RMB 362 million, compared to a loss in the prior year, while GAAP net loss narrowed by 99% year over year to RMB 11 million [6][28] Business Line Data and Key Metrics Changes - Advertising revenues grew by 20% year over year to RMB 2 billion, supported by product enhancements and infrastructure upgrades [5][15] - Game revenues surged by 76% year over year to RMB 1.73 billion, attributed to the strong performance of the SLG title Samo [5][17] - VAS business revenues increased by 11% year over year to RMB 2.81 billion, with live broadcasting regaining momentum [21][26] Market Data and Key Metrics Changes - Daily Active Users (DAUs) reached 107 million, while Monthly Active Users (MAUs) climbed to 368 million [7][10] - Monthly paying users hit an all-time high of 32 million, with a strong retention rate of around 80% [10][22] - AI-related content watch time more than doubled year over year, with a 400% increase in advertiser demand [12] Company Strategy and Development Direction - The company aims to prioritize high-quality content to meet the evolving needs of its user base, particularly targeting Gen Z [8][36] - Plans to enhance commercialization capabilities through AI and improved ad targeting [23][40] - Focus on sustaining long-term operations for games, particularly through seasonal updates and community engagement [19][48] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in continued revenue growth, particularly in advertising, driven by high-value users and strong brand association [56][62] - The company is committed to maintaining its role as a responsible cultural brand while advancing its commercialization efforts [22][23] - Expectations for gross profit margins to reach 40% to 45% in the mid to long term [66] Other Important Information - The partnership with CCTV for the Chinese New Year Gala significantly boosted brand awareness and user engagement [6][13] - The company received an A rating from MSCI for its ESG performance, highlighting its commitment to social value and sustainability [22] Q&A Session Summary Question: What are the specific plans to enhance quality content and AI applications? - Management emphasized the focus on high-quality content, noting that users are willing to pay for fulfilling content, with average daily time spent reaching 108 minutes [33][35] - AI applications are being developed to leverage Bilibili's extensive video content for better user engagement and ad targeting [40][42] Question: Can management review the performance of Samo and expectations for the anniversary version? - Management highlighted the importance of user retention and the success of seasonal updates, with the upcoming anniversary edition expected to enhance user engagement [45][48] - Plans to launch an international version and expand to multiple devices were also discussed [50] Question: What are the underlying drivers of advertising business growth? - The advertising business grew by 20% year over year, driven by high-value users and improved ad targeting capabilities [54][56] - The company expects to continue growing above industry averages, supported by strong brand association and user engagement [62] Question: What is the outlook for margins for the rest of the year? - Management indicated confidence in continued improvement of gross and net margins, with a target of 40% to 45% gross profit margins in the mid to long term [66]