Bilibili Inc. Announces Third Quarter 2019 Financial Results
Total net revenues. Total net revenues were RMB1,859.0 million (US$260.1 million), representing an increase of 72% from the same period of 2018.
Mobile games. Revenues from mobile games were RMB933.1 million (US$130.6 million), representing an increase of 25% from the same period of 2018. The increase was primarily due to the increasing popularity of both existing and newly launched mobile games.
Live broadcasting and Value-added services (VAS). Revenues from live broadcasting and VAS were RMB452.5 million (US$63.3 million), representing an increase of 167% from the same period of 2018, mainly attributable to the Company’s enhanced monetization efforts, led by increases in the number of paying users for live broadcasting services, the Company’s premium membership program and other VAS.
Advertising. Revenues from advertising were RMB247.2 million (US$34.6 million), representing an increase of 80% from the same period of 2018. This increase was primarily attributable to the ramp-up of brand advertising and performance-based advertising, driven by further recognition of Bilibili’s brand name in China’s online advertising market.
E-commerce and others. Revenues from e-commerce and others were RMB226.1 million (US$31.6 million), representing an increase of 703% from the same period of 2018, primarily attributable to the increase in sales of products through the Company’s e-commerce platform.
Cost of revenues. Cost of revenues was RMB1,507.7 million (US$210.9 million), representing an increase of 71% compared to the same period of 2018. Revenue-sharing cost, a key component of cost of revenues, was RMB664.6 million (US$93.0 million), representing an increase of 49% from the same period in 2018.
Gross profit. Gross profit was RMB351.3 million (US$49.1 million), representing an increase of 80% from the same period in 2018.
Total operating expenses. Total operating expenses were RMB774.4 million (US$108.3 million), representing an increase of 71% from the same period of 2018.Sales and marketing expenses. Sales and marketing expenses were RMB363.9 million (US$50.9 million), representing an 85% increase year-over-year. The increase was primarily attributable to the increased channel and marketing expenses associated with Bilibili’s app and brand in the summer holidays, as well as promotional expenses for the Company’s mobile games, increase in headcount in sales and marketing personnel, and an increase in fulfillment costs associated with Bilibili’s e-commerce stream.General and administrative expenses. General and administrative expenses were RMB163.2 million (US$22.8 million), representing a 48% increase year-over-year. The increase was primarily due to increased personnel-related expenses, increased amortization expense related to intangible assets acquired through business acquisitions and other increased general and administrative expenses.Research and development expenses. Research and development expenses were RMB247.3 million (US$34.6 million), representing a 69% increase year-over-year. The increase was primarily due to increased headcount in research and development personnel, increased share-based compensation expenses, and other increased research and development expenses.The above outlook is based on the current market conditions and reflects the Company’s preliminary estimates of market and operating conditions, and customer demand, which are all subject to change.1 Starting from the first quarter of 2019, the Company counts mobile MAUs of Bilibili Comic and Maoer toward its MAUs. Bilibili Comic is a mobile application offering comic content the Company launched in November 2018. Maoer is a platform that offers audio drama. In December 2018, Company increased its shareholdings to 80.5% in Maoer Inc., operator of Maoer app. In the third quarter of 2019, Bilibili Comic and Maoer in aggregate contributed 6.1 million of Bilibili’s MAUs.2 The paying users are calculated by number of users who paid for games, live broadcasting, premier membership, Bilibili Comics services and Maoer, after eliminating duplicates of users paid for multiple services other than users of Maoer. The Company adds the number of paying users of Maoer toward its total paying users without eliminating duplicates.3 Adjusted net loss and adjusted basic and diluted EPS are non-GAAP financial measures. For more information on non-GAAP financial measures, please see the section of “Use of Non-GAAP Financial Measures” and the table captioned “Unaudited Reconciliations of GAAP and Non-GAAP Results” set forth at the end of this press release.Conference CallThe Company’s management will host an earnings conference call at 8:00 PM U.S. Eastern time on November 18, 2019 (9:00 AM Beijing/Hong Kong time on November 19, 2019).Dial-in details for the earnings conference call are as follows:United States: +1-866-519-4004
Hong Kong: 800-906-601
Conference ID: 1139448Participants should dial-in approximately 5 minutes before the scheduled start time and ask to be connected to the call for “Bilibili Inc.”Additionally, a live and archived webcast of the conference call and investor presentation will be available on the Company’s investor relations website at http://ir.bilibili.com.A replay of the conference call will be accessible by phone two hours after the conclusion of the live call at the following numbers, until November 25, 2019:United States: +1-855-452-5696
Hong Kong: 800-963-117
Replay Access Code: 1139448About Bilibili Inc.
Bilibili represents the iconic brand of online entertainment with a mission to enrich the everyday life of young generations in China. Bilibili is a full-spectrum online entertainment world covering a wide array of genres and media formats, including videos, live broadcasting and mobile games. Bilibili provides an immersive entertainment experience and high-quality content that caters to the evolving and diversified interests of its users and communities, and has built its platform based on the strong emotional connections of Bilibili’s users to its content and communities.For more information, please visit: http://ir.bilibili.com.Use of Non-GAAP Financial MeasuresThe Company uses non-GAAP measures, such as adjusted net loss, adjusted net loss per share and per ADS, basic and diluted, in evaluating its operating results and for financial and operational decision-making purposes. The Company believes that the non-GAAP financial measures help identify underlying trends in its business by excluding the impact of share-based compensation expenses and amortization expense related to intangible assets acquired through business acquisitions, which are non-cash charges. The Company believes that the non-GAAP financial measures provide useful information about the Company’s results of operations, enhance the overall understanding of the Company’s past performance and future prospects and allow for greater visibility with respect to key metrics used by the Company’s management in its financial and operational decision-making.The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools, and when assessing the Company’s operating performance, cash flows or liquidity, investors should not consider them in isolation, or as a substitute for net loss, cash flows provided by operating activities or other consolidated statements of operations and cash flows data prepared in accordance with U.S. GAAP.The Company mitigates these limitations by reconciling the non-GAAP financial measures to the most comparable U.S. GAAP performance measures, all of which should be considered when evaluating the Company’s performance.For more information on the non-GAAP financial measures, please see the table captioned “Unaudited Reconciliations of GAAP and Non-GAAP Results” set forth at the end of this press release.Exchange Rate InformationThis announcement contains translations of certain RMB amounts into U.S. dollars (“US$”) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to US$ were made at the rate of RMB7.1477 to US$1.00, the exchange rate on September 30, 2019 set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB, as the case may be, at any particular rate or at all.Safe Harbor StatementThis announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident,” “potential,” “continue” or other similar expressions. Among other things, the Outlook and quotations from management in this announcement, as well as Bilibili’s strategic and operational plans, contain forward-looking statements. Bilibili may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about Bilibili’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Bilibili’s strategies; Bilibili’s future business development, financial condition and results of operations; Bilibili’s ability to retain and increase the number of users, members and advertising customers, provide quality content, products and services, and expand its product and service offerings; competition in the online entertainment industry; Bilibili’s ability to maintain its culture and brand image within its addressable user communities; Bilibili’s ability to manage its costs and expenses; PRC governmental policies and regulations relating to the online entertainment industry, general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in the Company’s filings with the Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of the press release, and the Company undertakes no duty to update such information, except as required under applicable law.The Piacente Group, Inc.
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