Bilibili, Inc. Q4 FY2024 earnings call

Management Statement and Operational Highlights

• Content and Community:
  • Q4 average daily video views exceeded 4.8 billion, up 14% year-over-year. Dominant in ACG-related content and expanding into pan entertainment, pan knowledge, automotive, and baby/maternity categories.
  • Over 3.1 million content creators earned income in 2024, with total income up 21% year-over-year. Fan charging program earnings surged nearly 500% in 2024.
• Advertising:
  • Q4 ad revenue RMB 2.4 billion (+24% YOY), full-year ad revenue RMB 8.2 billion (+28% YOY). Ad revenue per DAU +20% YOY Q4 and full year. Number of advertisers +30% YOY in 2024. Transportation and education ad revenues +100% YOY in Q4.
  • Top 5 industry verticals in Q4: games, digital products, home appliances, e-commerce, Internet services, automotive.
• Games:
  • Q4 games revenue RMB 1.8 billion (+79% YOY), full-year games revenue RMB 5.6 billion (+40% YOY). Driven by "San Guo: Mou Ding Tian Xia" and a Japanese ACG title launched overseas. Entering 6th game season Feb 22, with plans for multi-platform expansion and overseas launch.
• VAS:
  • Q4 VAS revenue +8% to RMB 3.1 billion, full-year +11% to RMB 11 billion. Premium memberships 22.7 million, over 80% annual subscriptions. Fan charging program attracted over 8 million participants in 2024, revenues +400% YOY.

Segment Performance

• Advertising: Fourth quarter revenue reached RMB 2.4 billion, up 24% year-over-year; full-year revenue was RMB 8.2 billion, up 28% year-over-year. Revenue contribution in the fourth quarter was approximately 31%. Ad revenue per DAU increased over 20% year-over-year for both the fourth quarter and full year 2024.
• Mobile Games: Fourth quarter games revenue was RMB 1.8 billion, up 79% year-over-year; full-year games revenue was RMB 5.6 billion, up 40% year-over-year. Revenue contribution in the fourth quarter was around 23%. Growth driven by hit strategy game "San Guo: Mou Ding Tian Xia" and a Japanese ACG title launched overseas.
• VAS (Value-Added Services): Fourth quarter VAS revenue increased 8% to RMB 3.1 billion; full-year VAS revenue was up 11% to RMB 11 billion. Revenue contribution in the fourth quarter was 40%. Premium memberships reached 22.7 million, with over 80% on annual subscriptions. The fan charging program saw creators' total earnings increase nearly 500% in 2024.
• IP Derivatives and Other: Contributed 6% to total revenue in the fourth quarter.

Guidance

• Advertising: Optimistic about 2025 growth; will continue to build an efficient ad platform and ad products, explore opportunities in leading game vertical and with consumer brand advertisers.
• Games: Continue to expand "San Guo: Mou Ding Tian Xia" with new seasons, multi-platform expansion, and overseas launch.
• VAS: Nurture healthy live broadcasting ecosystem and premium membership program, explore unique community-based products.

Risks

• Uncertainties in macroeconomic conditions affecting advertising and consumer spending.
• Intense competition in the digital content and gaming industries.
• Dependence on key games and content creators for revenue and user engagement.

Question and Answer

• Q: About 2025 strategy and AI integration.

A: Juliet Yang discussed that 2025 is a new chapter, emphasizing content plus community, with high-quality content as the core. Bilibili has unique video content and data assets, and AI integration with these assets to unleash potential.

• Q: Ad performance driver and 2025 outlook.

A: Juliet Yang mentioned high-quality user base, strong content offering, AI in ad efficiency, growth in key industries like games, digital products, etc., and continued expansion in emerging sectors.

• Q: Margin trends.

A: Sam Fan stated that gross margin reached 36.1% in Q4, driven by high-margin revenues. Expect steady gross margin expansion in 2025, with long-term gross margin target 40%-45% and operating profit margin target 15%-20%.

• Q: San Mou game.

A: Juliet Yang said San Mou has a target life cycle of at least 5 years, with strong user engagement, retention, and revenue generation. Upcoming updates in game season 6 and plans for multi-platform and overseas expansion.

• Q: User base expansion and brand awareness.

A: Juliet Yang discussed successful partnerships like with CCTV Spring Festival Gala, which increased DAUs, solidified Bilibili's position in national-wide content, and plans for more campaigns to expand user base and brand influence.