On May 23rd, Bilibili (BILI.NASDAQ, 09626. HK, hereinafter referred to as "Bilibili") released its Q1 2024 financial report. During the reporting period, The total revenue of Bilibili increased by 12% year-on-year, reaching 5.66 billion yuan.
While increasing income, Bilibili is accelerating losses reduction. In the first quarter, Bilibili's gross profit increased by 45% year-on-year, reaching 1.6 billion yuan, and its gross profit margin increased to 28.3% month on month for seven consecutive quarters; After adjustment, the operating loss and net loss were 510 million yuan and 456 million yuan respectively, significantly narrowing by 52% and 56% year-on-year, and achieving positive operating cash flow for three consecutive quarters, continuing to move towards profitability goals.
Chen Rui, Chairman and CEO of Bilibili, summarized in the financial report:; quot; In the first quarter, while ensuring the healthy development of community ecology, we achieved high-quality revenue growth, opening up a new era for the company's annual development. In 2024, we will continue to promote the healthy development of the content ecosystem and community, bringing users more diverse and high-quality content. At the same time, we will focus on discovering and cultivating high-quality UP owners, providing more growth opportunities and commercial channels for talented UP owners.
&Amp; quot; We are confident that with the improvement of commercialization ability and operational efficiency, we will continue to convert high-quality community traffic into high-quality revenue growth and steadily move towards profitability goals. Chen Rui said.
Record high daily usage time
According to financial report data, during the quarter, Bilibili's traffic has continued to grow healthily, with daily active users increasing by 9% year-on-year, reaching 102 million. The daily usage time has reached a historic high of 105 minutes, and the daily video playback has reached nearly 5 billion times, a year-on-year increase of 22%; The average monthly active users exceeded 341 million, also reaching a new high.
The growth of traffic has not affected the extremely high stickiness of Bilibili users. As of the end of the first quarter, 236 million users have passed the entrance exam and become official members of Bilibili, a year-on-year increase of 15%. Their retention rate for the 12th month has remained stable at around 80%. The total number of major members also continued to maintain stable growth in the first quarter, reaching 21.9 million, of which over 80% were annual subscription or automatic renewal members.
Behind this, it is thanks to the constantly enriched and prosperous content ecosystem of Bilibili. In the first quarter, Bilibili's characteristic advantages and content categories are flourishing, with a year-on-year increase of over 20% in views of categories such as knowledge, games, film and entertainment. As one of the most intelligent communities for AI content in China, The daily average playback volume of AI related content on Bilibili has increased by over 80% year-on-year, and the daily active UP users have increased by over 60% year-on-year.
At the same time, with the continuous expansion of user age and interest circles, emerging content is constantly emerging on Bilibili. In the first quarter, the daily average playback volume of categories such as home decoration, travel, and fitness increased by more than 45% year-on-year. Female users have also shown strong demand for content consumption, with a daily increase of over 40% in the fashion category and over 110% in the maternal, child, and parent-child category.
In addition, the rapid development of the automotive market has also driven more content consumption, becoming a new growth point for Bilibili content. In the first quarter, the number of users and video views in the automotive area increased by over 50% year-on-year, with an average of over 17 million users watching automotive content on Bilibili every day. Bilibili has become a core discussion area for new energy vehicles, with nearly 200 related videos exceeding one million views in the first quarter.
The prosperity of the content ecosystem cannot be separated from the support of the creators, Bilibili is also striving to open up more commercial paths for content creators. According to relevant data, in the first quarter, over 1.5 million UP owners earned revenue on Bilibili, with the number of UP owners earning revenue through commercial advertising increasing by 51% year-on-year; The number of UPs earning revenue through sales increased by 105% year-on-year.
Beyond traditional monetization channels, Bilibili is also continuously exploring and exploring business models that combine community and content, and gradually launching value-added services such as charging plans, workshops (selling works), and classrooms (selling courses), achieving certain results. In the first quarter, the number of UP owners who relied on workshops for income increased by over 40% year-on-year; The number of UP users who rely on classrooms for income increased by over 450% year-on-year; The total revenue of value-added services, including membership fees, classrooms, and charging, has also approached 1 billion yuan.
Bilibili COO Li Ni pointed out during the performance conference that these attempts can not only help UP owners increase a new revenue channel, but also enable users to express their love for UP owners While providing IP support, it also provides a better sense of achievement and experience. The entire community can also enter a healthier positive cycle as a result.
Next, Bilibili stated that the company will focus on identifying and supporting high-quality creators, and through traffic strategy support, submission tool optimization, intelligent operation tools, and other means, help potential and talented UP owners grow better on Bilibili and achieve commercial value.
Commercialization continues to improve quality and efficiency
Under the profit target, enhancing commercialization capability and better converting high-quality traffic into commercial revenue is still the primary task for Bilibili at this stage.
Within the first quarter, Bilibili continues to integrate and strengthen its advertising products, upgrade its effectiveness advertising platforms "Bihuo" and "Sanlian", and optimize the advertising function of the Huahuo platform. It opens up live streaming and dynamic business orders, lowers the advertising threshold, and provides advertisers with more convenient and intelligent advertising tools, significantly boosting the revenue performance of Bilibili's effectiveness advertising. In the first quarter, Bilibili's effectiveness advertising revenue increased by more than 50% year-on-year.
At the same time, guided by the "big open loop" strategy of not pursuing on-site transactions, but guiding users to trade on third-party platforms through blue chains, The trading ecosystem of Bilibili is also constantly thriving.
According to data from Bilibili, in the first quarter, the transaction volume of 3C digital products on site increased by over 230% year-on-year; The gradually released consumer power of women has also become a new highlight of on-site transactions. Since the beginning of this year, the sales volume of women's clothing products has exceeded that of the entire year of 2023. Among them, the cumulative transaction volume of the two live broadcasts of the 500000 fan UP host "Coco Knocking" exceeded 30 million yuan.
The prosperous trading ecosystem has also made Bilibili an important source of new customer growth for e-commerce platforms, bringing new growth opportunities. This is particularly evident at the upcoming e-commerce promotion node. Times Finance learned that during the "618" period, Bilibili will adhere to the principle of "open loop" and cooperate with platforms such as Alibaba, JD.com, Pinduoduo, and Vipshop to provide more intelligent advertising analysis tools and refined operational support for advertisers.
Li Ni revealed that, Bilibili has started to transition from a purely traffic based collaboration to a "traffic+integrated" content collaboration model; The cooperation between a single platform and platforms has increased the mode of cooperation between platforms and merchants. Based on these two changes, during this year's "618" period, The overall platform budget on Bilibili has increased by over 30%, and the merchant budget has increased by over 250%.
"In the future, we will strengthen cooperation in this vertical industry, and guide users to achieve the full chain process of planting, conversion, trading, and consumption on Bilibili," said Li Ni.
The efficiency improvement of advertising tools and the prosperity of the transaction ecosystem have helped advertising and growth services become the two fastest growing businesses on Bilibili in the first quarter. According to financial report data, Bilibili's advertising revenue in the first quarter was 1.67 billion yuan, a rapid year-on-year growth of 31%; The value-added service revenue reached 2.53 billion yuan, a year-on-year increase of 17%.
Looking ahead, adjustments are still ongoing. "In the second half of the year, we will systematically sort out and upgrade some value-added services and content payment businesses within the community, and believe that we can continue to bring more positive revenue and benefits to Bilibili in this area." Li Ni said.
Exploring new increments in gaming business
And in the once dominant gaming business, Bilibili is gradually stabilizing and finding the right direction for its growth. According to financial report data, Bilibili's gaming business recorded a revenue of 980 million yuan in the first quarter, a year-on-year decrease of 13%. This is mainly due to the decrease in revenue of old games.
At the performance conference, Chen Rui provided a more detailed breakdown of the future development strategy of Bilibili's gaming business. It points out that the guiding ideology for Bilibili's gaming business at present mainly consists of two words: stability and novelty.
Stability lies in the long-term operation of classic old games. Chen Rui gave an example of the old game "Fate/Brand Order" that was launched in 2016. As an old game that has been online for over 8 years, this game entered the top ten of iOS best-selling charts again in April under a series of new operational actions.
The game's revenue has also skyrocketed as a result. According to data provided by third-party platform Qimai Data, the estimated revenue for the iOS platform of Fate/Brand Order in April was 2.816 million US dollars, compared to 682000 US dollars in the same period of 2023, a year-on-year increase of 312.9%. As a result, Fate/Brand Order once again entered the top 50 of the game revenue chart in April.
"Making old games that have gone through time tests better is definitely more efficient than finding a new game. In the future, we will operate mature products more meticulously and ensure that the game operates smoothly for 10 years or even longer."
In terms of new games, Bilibili is expected to release the highly anticipated SLG strategy game "Three Kingdoms: Plan the World" on June 13th. As of now, over 2 million players have pre registered.
Chen Rui used this as a starting point to explain the new ideas of exploring new games and finding incremental growth on Bilibili. "We first discovered that there are a large number of users on the site who are interested in history, culture, politics, and economy. They have a natural interest in games with grand themes. That's why we found this game to try and received initial positive feedback. Since then, we have also considered that Bilibili users are younger and value fun more than competition. We have made many optimizations and improvements to the game in order to ultimately achieve today's results."
These two directions represent the innovation and exploration made by Bilibili's gaming business at the current stage. In Chen Rui's view, Bilibili has always been the platform with the highest quality and most diverse categories of gaming videos in China, as well as the interest community with the highest concentration of gamers. Bilibili therefore has a home advantage in the gaming business.
"So we will definitely deeply focus on this business and continuously bring better game products to the platform's users," Chen Rui pointed out.