Bilibili reported a better-than-expected Q2 revenue, with advertising revenue growing 36% YoY, live streaming revenue surging 32%, and adjusted net losses narrowing by 51% YoY.
Bilibili unveiled its unaudited financial results for the second quarter on August 17, prior to the U.S. stock market opening. The report highlighted a Q2 2023 revenue of $8.3 billion (53 billion yuan), beating market expectations of $8.26 billion (52.73 billion yuan). This was an 8% increase compared to $7.67 billion (49 billion yuan) from the same period last year.
Breakdowns indicated a robust $2.5 billion (16 billion yuan) in advertising revenue, marking a 36% growth YoY. Live streaming revenue similarly climbed 32%. However, revenue from the gaming sector dipped to $1.39 billion (8.9 billion yuan), a decline of 15% YoY.
Despite lacking new game releases in Q2, Bilibili introduced its first self-developed female-oriented game in July, which swiftly claimed the top spot on the iOS free download chart. Furthermore, Bilibili intends to roll out seven new games in both domestic and international markets in the latter half of the year.
Bilibili's net loss for the quarter was $2.34 billion (15 billion yuan), a 23% YoY decrease. The adjusted net loss stood at $1.51 billion (9.64 billion yuan), representing a significant 51% YoY contraction.
Gross profit soared to $1.88 billion (12 billion yuan), a remarkable 66% YoY growth. Additionally, the gross margin reached 23.1%, a significant leap from last year's 15%.
Daily active users for Bilibili in Q2 touched 96.5 million, a 15% YoY increase, while monthly active users surged to 324 million.
CEO Insights: Bilibili's CEO, Chen Rui, shared that the company witnessed healthy community growth in Q2, leading to a substantial rise in gross profit and a marked reduction in losses. Daily active users hit 96.5 million, a 15% YoY growth, and users spent an average of 94 minutes daily on the platform. This behavior boosted the total community usage time by 22% YoY. Chen added that the company's focus would remain on business development, enhancing operational efficiency, and delivering high-quality content to users.
Following the earnings release, Bilibili's stock surged by 7% pre-market but later stabilized with a 5% increase. However, the company issued a downward revision for its annual revenue forecast, now expecting $35.18 billion to $36.77 billion (225-235 billion yuan), lower than the previously projected $37.5 billion to $40.65 billion (240-260 billion yuan). This adjustment was primarily due to game release delays and weaker-than-expected contributions from non-core businesses, such as IP derivatives and others.
Revenue Details: Bilibili's Q2 advertising revenue reached $2.5 billion (16 billion yuan), marking a 36% YoY jump. Effective strategies to monetize high-quality user traffic were evident, with performance advertising revenue surging over 60%. The platform continued its dominance in various sectors, especially in gaming and e-commerce, leading to a 140% YoY growth in e-commerce-related advertising revenue.
Bilibili's core strength lies in its Professional User Generated Video (PUGV) content. Q2 witnessed a 19% YoY growth in daily active content creators and a 43% YoY jump in monthly video submissions.
Furthermore, over 1.58 million content creators earned income through Bilibili in Q2, a 40% YoY increase. Many of them boosted their income via advertising, live streaming, and other avenues, resulting in a 220% YoY surge in content creators earning through live streaming and video monetization.
Boosted by a 32% YoY growth in live streaming revenue, Bilibili's value-added service sector raked in $3.6 billion (23 billion yuan), a 9% YoY growth. Monthly active live streamers also saw a 15% YoY uptick.
In Q2, Bilibili's gaming revenue was $1.39 billion (8.9 billion yuan). Notably, their newly launched female-centric game claimed the top spot on the iOS free download list. Seven new game releases are on the horizon, including the highly anticipated game set to publicly test on August 30.
Engagement Highlights: Bilibili's daily active users reached 96.5 million in Q2, marking a 15% YoY growth, with monthly active users touching 324 million. Users' average daily usage time set a new record at 94 minutes, propelling the total usage time by 22% YoY.
Video plays per day saw a 31% YoY increase, reaching 41 billion, while monthly interactions neared 150 billion, a 19% YoY jump. Official member count reached 214 million, a 26% YoY growth, with a retention rate of 80% in the 12th month.
Cost Reduction and Efficiency: Bilibili took diligent measures to enhance its operational efficiency in Q2. With a sharp focus on cost control, overall operating expenses declined 14% YoY. Notably, sales and marketing expenses reduced by 22%, while administrative costs fell by 14%. This diligent cost management led to the adjusted net loss narrowing by 51% YoY.
CFO's Perspective: Bilibili's Chief Financial Officer, Fan Xin, emphasized the company's commitment to boosting operational efficiency, reflected in the 66% YoY gross profit surge. The firm's operational expenses, as well as sales and marketing costs, fell by 14% and 22% YoY, respectively. These effective measures played a crucial role in significantly reducing the adjusted net loss by 51% YoY. Moving forward, Fan highlighted Bilibili's determination to enhance its gross profit while steadily advancing towards profitability.
