Bilibili, Inc. Q1 FY2025 earnings call

• Revenue growth: Total revenues accelerated 24% to RMB7 billion, driven by 20% growth in advertising (RMB2 billion) and 76% growth in games (RMB1.73 billion). - Community development: DAUs reached 107 million, MAUs climbed to 368 million, and average daily time spent by users was a record 108 minutes. Monthly paying users hit an all-time high of 32 million. - Content initiatives: Collaboration with CCTV for the Chinese New Year Gala boosted brand awareness; self-produced anime like 'The Tales of Herding Gods' and 'To Be Hero X' performed well. - Creator community: Number of creators with over 1,000, 10,000, 100,000, and 1 million followers grew by over 20% year-over-year; over 1.5 million creators made money on Bilibili through various programs. - AI integration: AI-related watch time more than doubled, and advertiser demand for AI-related content surged 400%.

Total revenues for the first quarter were RMB7 billion, up 24% year-over-year. Revenue breakdown by segment: VAS accounted for approximately 40% (RMB2.81 billion), advertising 29% (RMB2 billion), mobile games 25% (RMB1.73 billion), and IP derivatives and other businesses 6%. Gross profit increased by 58% year-over-year to RMB2.54 billion, with gross profit margin expanding to 36.3% from 28.3% in the same period last year.

• Confident in continued growth throughout 2025, with gross margin expected to gradually improve. - Mid-to-long-term gross profit margin target is 40%-45%, and operating margin target is 15%-20%. - Marketing expenses will fluctuate with game promotion cycles, but operating expenses as a percentage of revenue are expected to continue declining.

Q: Congrats on a very solid first quarter result. Question about content: specific plan to increase quality content and progress on AI applications?

A: Rui Chen mentioned focusing on high-quality content as users seek fulfillment, with plans to help creators gain fans and monetize better. AI integration helps in ad material creation, understanding user intent, and has unique data assets for AI training.

Q: Question about game business: performance of San Mou in Season 6 and 7, expectations for anniversary edition, and game pipeline?

A: Rui Chen said San Mou's DAU, paying ratio, and ARPU are top industry levels. Season 8 (anniversary edition) launches on May 31 with refreshed map, new characters, etc. Plan to launch international version in traditional Chinese and bring to mini game platforms; also focus on legacy titles like Azur Lane and FGO.

Q: Question about advertising business: underlying drivers of 20% growth and future outlook?

A: Rui Chen said key drivers include high-value users, strong brand association with quality content. Improved AI-related product infrastructure, GenAI-assisted ad material creation, and expansion in ad verticals like home appliances and AI contributed. Confident in continuing above-average growth.

Q: Question about margin trend and mid-term targets: outlook on margins and mid-term GP and net profit margin targets?

A: Sam Fan said Q1 gross margin was a record 33.3%, with growing high-margin revenue shares. Confident in gradual margin improvement throughout 2025; mid-term gross profit margin target 40%-45%, operating margin target 15%-20%.