Interface News Reporter | She Xiaochen
Bilibili submitted its first profit report after going public.
On the evening of November 14th, Bilibili (NASDAQ: BILI, HKEX: 9626; Bilibili (hereinafter referred to as "Bilibili") releases its unaudited financial report for the third quarter ending on September 30, 2024. In the third quarter, the total revenue of Bilibili increased by 26% year-on-year, reaching 7.31 billion yuan. This quarter, Bilibili achieved profitability for the first time, with an adjusted operating profit of 270 million yuan and an adjusted net profit of 240 million yuan.
For Bilibili, which has been losing money for a long time, making profits is not easy. From the financial report data, achieving this goal mainly relies on the synchronous growth of two major businesses, with the key point being that the game "did not drag down".
This quarter, the gross profit of Bilibili increased by 76% year-on-year, reaching 2.55 billion yuan. The gross profit margin increased from 25.0% in the same period last year to 34.9% in this quarter. The management of Bilibili analyzed during the earnings call that this improvement is mainly due to the increase in the proportion of high profit margin gaming and advertising revenue, as well as effective control of fixed costs.
In the past few quarters, the slowdown in the growth of the gaming business has put pressure on Bilibili's profitability. This quarter, Bilibili's gaming revenue increased significantly by 84% year-on-year, reaching 1.82 billion yuan, far higher than the 13% in the previous quarter. Specifically, long-term operating games such as FGO and Blue Line have stable revenue, while Three Kingdoms: Conquering the World returned to second place on the iOS bestseller list on the day of S3's launch, which has driven the stability of game revenue. In this quarter, the proportion of games contributing to Bilibili's revenue also reached 25%.
In another important aspect of business advertising, Bilibili no longer has any hesitation.
Unlike other content platforms that are conservative in promoting products, Bilibili has opened its doors in the past two years to attract traffic to e-commerce platforms. This year's Singles' Day, Bilibili reached cooperation agreements with e-commerce platforms such as Alibaba, JD.com, Pinduoduo, and Vipshop, resulting in a year-on-year increase of over 150% in sales revenue (GMV) and nearly 80% in the number of UP owners carrying goods.
In addition, Chen Rui, Chairman and CEO of Bilibili, specifically pointed out during the conference call that Bilibili's business does not strictly refer to advertising. In addition to the revenue generated by advertisers, the income of UP owners also includes user charging, paid courses, etc. In the future, Bilibili will also use more scenarios such as live streaming and hot searches to increase advertising revenue.
In the third quarter, Bilibili's advertising revenue reached 2.09 billion yuan, continuing to achieve year-on-year growth. Among them, the growth rate of performance-based advertising is close to 50%, which has a positive impact on the overall gross profit of the company.
The growth driven by the two core businesses has given Bilibili confidence, and it can be foreseen that they will also become the key to achieving Bilibili's annual profit target. Our core business has a higher revenue ceiling and higher gross profit, which can make our business growth more efficient, "said Chen Rui.
At this point, the income structure of Bilibili has formed a relatively balanced state. This quarter, Bilibili's value-added services, advertising, gaming, IP derivatives, and other businesses contributed 38%, 29%, 25%, and 8% of revenue, respectively.
It is worth mentioning that Bilibili believes that the increase in user age has driven the prosperity of the platform's ecosystem, which in turn has also promoted profitability. In the third quarter, the average daily active users of Bilibili reached 107 million, and the monthly average active users reached 348 million. Chen Rui disclosed that the average age of users on Bilibili platform has reached 25 years old, and the commercial value of users is increasing.
Station B, which strives to become profitable, has a larger goal, but the platform has already sacrificed the characteristic attribute of "anime" when promoting various businesses.
However, Chen Rui showed confidence during the earnings conference call, stating, "In China, as long as users mention high-quality videos, talented UP hosts, or medium length videos, the first brand they think of is definitely Bilibili. There is nothing else, and they cannot even remember what the second brand is." He believes that this mindset is as important as gold.
However, in this process, the next topic for Bilibili became rethinking its competitive characteristics.
A signal with a sense of crisis is that at present, platforms such as Tiktok and Xiaohongshu have successively opened the right to ten minute video; In terms of vertical video, competitors of content platforms have also begun to specialize in young categories such as entertainment and gaming. Bilibili has made great efforts in the past to try short videos, but the current results are minimal. Many top Bilibili content creators, including "Film and Television Hurricane," choose to publish video content on Bilibili while also conducting live streaming sales on other platforms to generate revenue.
As of September 30, 2024, Bilibili holds a total of RMB 15.2 billion in cash and cash equivalents, term deposits, and short-term investments. Bilibili announced a new share repurchase plan, which will repurchase stocks worth no more than $200 million over the next 24 months.