Release Date: August 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Total revenues increased by 15% year-over-year to RMB6.13 billion.
- Advertising revenue grew by 30% year-over-year, leading the growth.
- Gross profit increased by 49% year-over-year, with gross profit margin rising to 29.9%.
- DAUs increased by 6% year-over-year, reaching 102 million, and MAUs grew to 336 million.
- Record RMB1.75 billion in operating cash flow was generated in the second quarter.
Negative Points
- Sales and marketing expenses increased by 13% year-over-year to RMB1 billion.
- Despite improvements, the company still reported an adjusted operating loss and adjusted net loss.
- R&D expenses were RMB895 million, down 15% year-over-year, indicating potential cutbacks in innovation.
- The company faces a challenging macro environment, impacting overall business conditions.
- The need for continuous investment in ad infrastructure and vertical industry solutions to maintain growth.
Q & A Highlights
Q: What were the key drivers behind the robust advertising growth in the second quarter, and what are the expectations for the second half?
A: In a challenging macro environment, Bilibili's advertising business achieved a 30% year-on-year growth, with quarterly revenue exceeding RMB2 billion for the first time. Key drivers include healthy traffic growth and unlocking the commercial value of users. DAUs grew by 6% year-over-year, and video views increased by 18%. The average age of users is now 25, indicating growing consumption needs and spending power. For the second half, Bilibili aims to maintain above-industry average advertising growth by enhancing platform infrastructure and vertical industry solutions.
Q: Can you share more about the successful launch of the game San Guo: Mou Ding Tian Xia and its expected lifecycle?
A: San Mou became a blockbuster, quickly ranking among the Top 3 on the iOS game top grossing chart and reaching RMB1 billion in revenue faster than any other game in Bilibili's history. The game's success is attributed to Bilibili's strategy of reinventing games to cater to younger generations. The SLG genre is ideal for long-term operations, and the game’s second season has shown strong performance. Bilibili aims to make San Mou an evergreen title with a lifecycle of more than five years.
Q: How is Bilibili evolving its content strategy as the average user age reaches 25 years old?
A: As users' needs evolve, new content categories are emerging. In Q2, video views in home decor, real estate, automotive, and fashion beauty categories increased significantly. The daily video views for baby and maternity content grew by 80% year-over-year. Bilibili remains a go-to destination for young generations before making big purchases due to its authentic and professional videos. Traditional leading content categories like games, knowledge, and tech also saw over 20% year-over-year growth.
Q: What is the financial outlook for the second half of 2024, especially regarding profitability?
A: Bilibili demonstrated significant margin expansion and robust cash flow in Q2. Gross profit increased by 49% year-over-year, and the gross profit margin reached nearly 30%. The company generated RMB2.4 billion in positive operating cash flow in the first half of the year. For Q3, Bilibili expects strong revenue growth from games and advertising, aiming to achieve meaningful operating profit on a non-GAAP basis. The company anticipates continued revenue scale and profitability improvement in 2025.
Q: How is Bilibili applying AI in its platform, and what future potential does it see?
A: Bilibili has the most extensive and highest-quality AI content, with over 80 million users watching AI-related content monthly. The platform leverages AI to improve content creation efficiency and enhance user experience. AI tools like AI Assistant and AI Search help summarize video content, while AI translation aids in language translation. Bilibili is collaborating with leading AI companies to bring better experiences to users and unlock the full potential of AI applications.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
