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China based video-sharing platform Bilibili, Inc. reported third quarter earnings before the open Tuesday that highlighted surging user numbers but at a high cost. The bottom-line was negatively impacted by a 71% surge in operating expenses to RMB774 million (US$108 million). There was a 70% increase in the cost of revenue to RMB1.5 billion (US$211 million).

BiliBili

 

Bilibili Inc - ADR NASDAQ: BILI Reported Earnings Before Open Tuesday

($0.15) AND $260 Million Revenue

Earnings

Bilibili third-quarter net loss, adjusted for one-off items, widened to RMB343 million($48 million) or RMB1.05 per share ($0.15 per share) from RMB203 million or RMB0.72 per share in the same period of last year. On an unadjusted basis, the company posted a net loss of RMB406 million ($57 million), compared to a loss of RMB246 million last year.

At RMB1.86 billion ($260 million), net revenues were up 72% from the year-ago period. Mobile games revenues moved up 25%, while revenues from live broadcasting and value-added services more than doubled. Advertising revenues surged 80%.

Bilibili Inc - ADR NASDAQ: BILI

Market Reaction - Before Market 15.66 USD −0.72 (4.40%)

Highlights

  • The bottom-line was negatively impacted by a 71% surge in operating expenses to RMB774 million (US$108 million).
  • There was a 70% increase in the cost of revenue to RMB1.5 billion (US$211 million).
  • Mobile games revenues moved up 25%, while revenues from live broadcasting and value-added services more than doubled.
  • Advertising revenues surged 80%.
  • At the end of the quarter, the number of monthly active users was 127.9 million, which represents a 38% year-over-year increase.
  • The number of mobile active users climbed 43% annually to 114.2 million.
  • The number of monthly paying users, on average, rose sharply to about $8 million.
  • Daily active users increased 40% to 38 million, while revenue per mobile active users advanced 25% to RMB14.5.

“Our growing library of content and efficient user growth strategy continue to pay off. We attracted considerable new traffic in the third quarter, adding 17.5 million MAUs sequentially, the highest number of net-additions in our corporate history. Our average DAUs also reached a new high of 37.6 million, increasing by 40% year-on-year in the third quarter,” said chief executive officer Rui Chen.

Outlook

  • For the fourth quarter, the management predicts net revenues between RMB1.93 billion and RMB1.98 billion.
  • BILI expects to convert the growing traffic to paying-users in the coming months and enhance gross margin.

 

"Looking at our community, we are seeing accelerated user expansion. We are expressing fast growth in numbers as well as the engagement levels. In the third quarter, we have 725 million daily video views up 60% year-on-year. This largely base is deeply in growth in our platform connecting with each other and our content. In Q3, our users generated 2.5 billion monthly interactions through bullet chats, comment, likes and Bilibili Moment posts. This is up 122% compared to the same period last year. Our official membership program is also on the rise. At the end of the quarter, we have 62 million official members who passed our 100 questions exam, up 46% year-over-year. Our 12-month retention rate remain high as well at about 80%. This is an excellent indicator of the high quality of our user growth." - Xin Fan -- Chief Financial Officer

 

 About Bilibili

Bilibili website first launched in June 2009 and officially named ‘‘bilibili’’ in January 2010 to "provide high-quality content and an immersive entertainment experience, and have built our platform based on the strong emotional connections of our users to our content and communities. Our mission is to enrich the everyday life of young generations in China."

The company started as a content community inspired by anime, comics and games, or ACG, and have evolved into a full-spectrum online entertainment world covering a wide array of genres and media formats, including videos, live broadcasting and mobile games.

The company believes China will become the world’s largest online entertainment market in the future and our brand recognition and market leadership among the young generations in China position us well to capture the significant opportunities. We have a young and culturally aspirational user base willing to invest in a high-quality entertainment experience.

According to QuestMobile, the majority of BILI user base are Generation Z, individuals born from 1990 to 2009 in China. They typically receive quality education and are technology savvy, with strong demand for culture products and avenues for self-expression and social interaction.

BILI pioneered the ‘‘bullet chatting’’ feature, a live commenting function that has transformed the viewing experience by displaying thoughts and feelings of other audience viewing the same video. "This signature feature fosters a highly interactive and enjoyable viewing experience and allows our users to benefit from the strong emotional bonds with other users who share similar aspiration and interests. Our vibrant communities fuel the ever-growing supply of creative professional user generated content, or PUGC. We have developed a robust system and nurtured an encouraging community culture that respects and rewards content creators and motivates the creation of inspirational content. In addition to PUGC, our diversified content offerings include licensed videos, live broadcasting and mobile games. We focus on offering content that caters to the evolving and diversified interests of our users and our communities."

Source: Bilibili

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