Our reporter Zhang Jingchao reports from Beijing.
On the afternoon of June 1st, Billie Billie Barrage Network (NASDAQ：BILI, 09626.HK, hereinafter referred to as "bilibili") released its unaudited financial report for the first quarter ended March 31st, 2023. The financial report shows that bilibili’s total revenue in the first quarter was 5.1 billion yuan (about 738.2 million US dollars), an increase of 0.3% compared with the same period in 2022, and its net loss was 629.6 million yuan (about 91.7 million US dollars), a decrease of 72% compared with the same period in 2022. According to Non-GAAP, the adjusted net loss was 1 billion yuan (about US$ 150.1 million), a decrease of 38% compared with the same period in 2022.
From the perspective of specific business, driven by the growth of live broadcast business, the revenue of value-added service business in the first quarter reached 2.16 billion yuan, the number of monthly active anchors in bilibili increased by 34% year-on-year, and the number of live broadcast paying users increased by 15% year-on-year; The advertising business income reached 1.27 billion yuan, up 22% year-on-year, of which the effect advertising income increased by over 50% year-on-year; Bilibili’s game business revenue reached 1.13 billion yuan. With the resumption of the approval of game version numbers, bilibili will release 8 new games in China in the next few quarters.
"China Business News" reporter noted that bilibili also made relevant responses to the "UPP suspension" in the first quarter of this year in the financial report and the conference call after the release of the financial report. According to the financial report, during the reporting period, over 1.5 million UP owners earned income in bilibili, with an average monthly contribution of over 22 million. CEO Chen Rui said that the report that "due to the low income of bilibili’s content creation, a large number of UP owners have stopped updating" is misleading. "There are over one million UP owners in bilibili, but there are only three mentioned in the article, and the two are still updating after the news release".
Reduce cost and increase efficiency
Bilibili’s losses narrowed, thanks to the improvement of its gross profit margin and the reduction of expenses.
Relevant data show that in the first quarter, bilibili’s gross profit margin further increased to 22%, with a year-on-year increase of 37%. The total operating expenses were 2.5 billion yuan, down 11% year-on-year, of which the marketing and sales expenses were 880 million yuan, down 30% year-on-year. The results of loss reduction in the first quarter were remarkable, and the net loss narrowed by 72% year-on-year.
"In the first quarter, the total cost of bilibili decreased by 7% year-on-year, and the gross profit increased by 37% year-on-year. Gross profit margin increased from 16% last year to 22%. Through technology upgrading and operation management optimization, the bandwidth cost continued to decline in the first quarter, down 16% year-on-year and 12% quarter-on-quarter. Other fixed costs, such as labor costs and operating costs, also decreased year-on-year and quarter-on-quarter. " Regarding the specific situation of spending cuts, CFO Fan Xin mentioned that it is expected that the marketing expenses in bilibili will continue to decrease year-on-year.
"At this stage, I think improving commercialization efficiency should be one of the most important tasks of the company, and the healthy growth of DAU is an important cornerstone to promote commercialization efficiency. Our current user growth strategy, which pays more attention to quality, will inevitably shift our focus from the past MAU to the present DAU, so we can see that in the past few quarters, our marketing expenses have decreased compared with the past. In the case, the growth of our DAU is sustained. " On the conference call, Rui Chen said that in the first quarter, the marketing expenses in bilibili decreased by 30% year-on-year, but the DAU increased by 18% year-on-year, reaching 93.7 million. "In my opinion, compared with MAU, DAU should be more able to show the activity of users and the commercialization potential brought by the number of users in bilibili. Next, our strategy will still focus on the growth of DAU. We will further improve the retention and activity of users and continuously improve our DAU on the basis of maintaining the stability of MAU. "
CEO responded to "UP main stop more tide"
At the end of March this year, there were a lot of reports that some UP companies in bilibili stopped working because of the sharp drop in income or the difficulty in maintaining their daily expenses.
"This statement is misleading." Rui Chen responded that in the first quarter of this year, the number of UP owners who earned income through bilibili increased by nearly 50% year-on-year, and the number of UP owners who earned income through advertising, live broadcast, user fees and other means was much higher than last year.
When talking about the reduction of creative incentive, Rui Chen explained that creative incentive is the income provided for UP owners who have no revenue capacity, and it can be considered as a platform subsidy, which is mainly provided to UP owners below 10,000 yuan. The UP owners who earn more than 10,000 yuan need to gradually help each other find ways to make money through bilibili, such as advertising and live broadcast. "Creative incentives have no effect on the income of mainstream UP main groups."
He also stressed that at present, making UP owners earn money is the most concerned work of the whole company in bilibili. Whether it is the fireworks system that provides commercial income or the development of revenue models such as live broadcast, it provides UP owners with more possibilities to earn income. The commercialization of UP in bilibili has been significantly enhanced in the past year, and bilibili will continue to enhance the commercialization ability of UP owners in the future.
Bilibili Financial Report shows that in the first quarter, the average daily active UP owners in bilibili increased by 42% year-on-year, and the average monthly contribution reached 22.5 million, up by 79% year-on-year. In the first quarter, more than 1.5 million UP owners earned income in bilibili, a year-on-year increase of 50%. Among them, the number of creators who earned income through channels other than the creative incentive plan increased by over 55% year-on-year.
Expanding new channels for live broadcast business
When talking about the live broadcast business with good growth, Rui Chen said that there is at least one time room for growth in the future.
"With more and more video UP owners and amateurs becoming anchors and optimizing the bandwidth cost, I believe that the gross profit margin of live broadcast will continue to increase in the future." Rui Chen said.
During the conference call, Li Xi, COO of bilibili, also said, "We prefer to regard it as an opportunity to increase advertising due to the prosperity of the transaction, and also a new opportunity to bring revenue to UP owners. Since last year, when all other content platforms are practicing closed-loop e-commerce, we have chosen and insisted on opening the loop, connecting the potential energy of bilibili ecology to all e-commerce platforms, with the aim of building users’ mind of spending in bilibili communities and improving the middle-level ability of trading in bilibili. In the first quarter, we saw that more than 10 million users consumed goods-related content in bilibili every day, and the resulting advertising revenue has accounted for 30% of the effect advertising revenue. "
Li Xi revealed that bringing goods is becoming a new channel for UP owners to increase their income. At present, an average of more than 50,000 UP owners try to trade, consume and bring goods on bilibili. "In terms of categories, we have also initially run through the mode of advertising in bilibili, such as beauty, food and digital categories. In the future, with the continued prosperity of bilibili’s ecology, we will further release the potential energy of trading and consumption."
In addition, bilibili also reiterated the annual income outlook for 2023, which is expected to be between 24 billion yuan and 26 billion yuan.
(Editor: Zhang Jingchao Proofreading: Yan Jingning)