Bilibili Inc., the iconic video community that resonates with China’s younger demographic, has released its Q2 2023 financial results. The brand, which is a staple for the digital age in China, has showcased a blend of growth, efficiency, and resilience in a competitive tech landscape.
Key Insights from the Release:
- Bilibili’s net revenues touched RMB5.3 billion (US$731.5 million) for the quarter, marking an 8% rise compared to Q2 2022.
- A remarkable 66% spike in gross profit was observed, taking the figure to RMB1.2 billion (US$169.3 million). The growth in profit margin was especially noteworthy, rising from 15.0% in Q2 2022 to 23.1% in the present quarter.
- The company’s net loss narrowed by 23%, standing at RMB1.5 billion (US$213.5 million).
- Average daily active users (DAUs) — a critical metric for tech platforms — recorded a 15% year-over-year growth, reaching 96.5 million.
“We accomplished substantial gross profit improvement and notable losses reduction in the second quarter,” shared Mr. Rui Chen, the CEO of Bilibili. He added that their daily user engagement has also soared, with users spending an average of 94 minutes daily on the platform — a 22% year-over-year growth in total time spent.
Mr. Sam Fan, Bilibili’s CFO, pointed out their success in operational efficiency, highlighting a 66% gross profit increase and a 23% gross profit margin. A strategic reduction in total operating expenses and sales/marketing costs contributed to a 51% reduction in adjusted net loss.
- Revenues from Value-added services (VAS) grew by 9% from the same period last year, reaching RMB2.3 billion (US$317.4 million).
- Advertising revenues exhibited a significant 36% growth, touching RMB1.6 billion (US$216.9 million).
- On the flip side, mobile game revenues dipped by 15%, standing at RMB890.9 million (US$122.9 million) due to the absence of new game launches.
- The company’s outlook for 2023 total net revenues was revised, now expected to lie between RMB22.5 billion and RMB23.5 billion. This adjustment stems from delays in game launches and underwhelming revenue contributions from non-core segments like IP derivatives.
Bilibili Delivers Improved Profitability Amid User Growth in Q1 2023
Bilibili Inc. (NASDAQ: BILI and HKEX: 9626), a leading video community targeting the younger demographic in China, announced its unaudited financial results for Q1 2023, highlighting improved profitability and user growth.
Growth in User Engagement
The average daily active users (DAUs) grew 18% year-on-year to 93.7 million. Meanwhile, monthly active users (MAUs) reached 315.2 million, leading to a DAU/MAU ratio of 29.7%. User engagement remained robust, with users spending an average of 96 minutes daily on Bilibili in Q1 2023.
“We continue to execute our strategy of prioritizing profitability while fostering a vibrant and highly engaged community for our users and creators,” commented Rui Chen, chairman and CEO of Bilibili. “Our primary focus will remain on enhancing our commercialization efficiency and improving our profitability while enriching the everyday lives of young generations in China.”
Revenue Breakdown and Financial Highlights
Despite the net revenues modestly increasing by 0.3% year-on-year to RMB5.1 billion (US$738.2 million), several key areas showed marked improvements.
Advertising revenues saw a significant rise of 22% year-on-year to RMB1.3 billion (US$185.2 million), driven by enhanced advertising efficiency and product offerings.
Meanwhile, revenues from value-added services (VAS), mainly due to the growing number of paying users for live broadcasting services, were up 5% year-on-year to RMB2.2 billion (US$314.0 million).
However, revenues from mobile games and IP derivatives and others experienced declines, down 17% and 15% year-on-year, respectively, which can be attributed to the lack of new game launches and a decrease in sales of derivative merchandise of animation, comics, and games on Bilibili’s e-commerce platform.
Notably, Bilibili reduced its net loss by 72% year-on-year to RMB629.6 million (US$91.7 million) in Q1 2023. The adjusted net loss narrowed by 38% year-on-year to RMB1.0 billion (US$150.1 million).
“Our gross profit margin improved to 22% from 16% for the same period last year, driven by spending control measures, which resulted in a significant reduction in our total operating expenses, including a 30% year-over-year decrease in our sales and marketing expenses,” said Sam Fan, Bilibili’s CFO.
Cash Position and Share Repurchase Program
As of March 31, 2023, Bilibili had cash and cash equivalents, time deposits, and short-term investments of RMB19.4 billion (US$2.8 billion).
The company’s board of directors had authorized a share repurchase program up to US$500 million of its ADSs for the next 24 months. As of the end of Q1 2023, the company had repurchased a total of 2.6 million ADSs for a total cost of US$53.6 million.
For 2023, Bilibili expects net revenues to be between RMB24.0 billion and RMB26.0 billion, consistent with previously provided estimates.