Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bilibili Inc (BILI, Financial) achieved its first quarterly adjusted net profit, marking a significant milestone in its financial performance.
- Total revenues for the third quarter increased by 26% year over year, reaching RMB7.3 billion, driven by strong growth in the games and advertising sectors.
- The company's gross profit rose by 76% year over year, with the gross profit margin improving to 34.9% from 25.0% in the same period last year.
- Daily active users (DAUs) and monthly active users (MAUs) reached record highs, with DAUs at 107 million and MAUs at 348 million, indicating strong user engagement.
- Bilibili Inc (BILI) announced a share repurchase program of up to USD200 million, showcasing its commitment to enhancing shareholder returns.
Negative Points
- Despite the positive financial results, there are uncertainties in advertisers' budgets due to the macroeconomic environment, which could impact future advertising revenue.
- Sales and marketing expenses increased by 21% year over year, primarily due to increased marketing expenses for exclusively licensed games.
- The company faces competition in the video industry, and maintaining its unique position requires continuous investment in content and community growth.
- While the company has turned profitable, the sustainability of this profitability in the long term remains to be seen, especially with potential fluctuations in the gaming and advertising markets.
- The macroeconomic environment presents challenges, with certain sectors like automotive, beauty and fashion, and real estate experiencing tight budgets, which could affect Bilibili Inc (BILI)'s advertising revenue.
Q & A Highlights
Q: What is Bilibili's strategic focus after achieving breakeven this quarter, and how does the company plan to strengthen its position in the video industry?
A: Rui Chen, Chairman and CEO, explained that achieving profitability is a natural outcome of their evolving business model. Bilibili will continue to focus on community growth and commercialization, particularly in high-margin areas like games and advertising. The company aims to leverage its unique position in the video industry to drive sustainable, profitable growth by enhancing its content ecosystem and commercialization efforts.
Q: What drove the strong 28% year-over-year growth in advertising revenue in the third quarter, and what is the outlook for the fourth quarter?
A: Ni Li, Vice Chairwoman and COO, attributed the growth to improved ad infrastructure and increased ad inventory, particularly in performance-based ads, which grew nearly 50%. The company expects continued strong growth in advertising revenue, driven by high-quality ad placements and expanding industry verticals, despite some macroeconomic uncertainties.
Q: Can you provide insights into the performance and future plans for the game "San Guo: Mou Ding Tian Xia"?
A: Rui Chen noted that "San Mou" is performing exceptionally well and is entering its fourth season. The focus is on long-term sustainability, with plans for continuous updates and international expansion. The game has high user engagement and retention, and Bilibili aims to maintain its success by listening to user feedback and optimizing the gaming experience.
Q: What is the outlook for Bilibili's gross profit margin and profit margin after turning profitable this quarter?
A: Xin Fan, CFO, highlighted that the gross profit margin improved significantly due to the growth in high-margin game and advertising revenues. The company expects continued improvement in gross profit margins and non-GAAP operating income, supported by strong growth in these areas and effective cost control.
Q: How is Bilibili responding to recent macroeconomic policy changes, and what impact do they expect on their business?
A: Rui Chen expressed optimism about the positive economic policies introduced, which signal government support for economic growth. While the full effects may take time, Bilibili expects to benefit from an improved economic environment. The company remains focused on its own development and long-term sustainable growth, regardless of macroeconomic conditions.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
