Release Date: February 20, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bilibili Inc (BILI, Financial) achieved its first GAAP net profit in the fourth quarter of 2024, marking a significant milestone in its financial performance.
- Total revenues for the fourth quarter were RMB7.7 billion, reflecting a 22% year-over-year increase, driven by improvements in advertising and mobile games.
- The company's advertising business saw strong growth, with revenues increasing 24% year-over-year in Q4 and 28% for the full year.
- Bilibili Inc (BILI) reported a gross profit margin of 36.1% in Q4, contributing to a 68% year-over-year growth in gross profit.
- The company has a vibrant and highly engaged community, with DAUs and MAUs reaching 103 million and 340 million, respectively, and users spending an average of 99 minutes daily on the platform.
Negative Points
- Despite achieving profitability, Bilibili Inc (BILI) faces a challenging macro environment that could impact future growth, particularly in brand and native ad revenues.
- The company’s operating expenses remain high, with sales and marketing expenses increasing by 10% year-over-year in Q4.
- Bilibili Inc (BILI) is in the early stages of unlocking the commercial value of its community, indicating potential challenges in fully capitalizing on its user base.
- The company’s reliance on high-margin gaming and advertising revenues may pose a risk if these sectors experience downturns.
- Bilibili Inc (BILI) faces intense competition in the advertising sector, requiring continuous improvement in ad infrastructure and efficiency to maintain growth.
Q & A Highlights
Q: After reaching breakeven last year, how should we think about Bilibili's overall strategy for 2025, especially regarding AI integration with the community?
A: Rui Chen, Chairman and CEO, highlighted that achieving profitability was a goal set in 2022, and they are pleased to have reached it ahead of schedule. For 2025, Bilibili will continue focusing on content and community, aiming for sustainable growth and profitability. High-quality content remains central, and AI advancements will be leveraged to enhance user experience and content creation.
Q: Could you share more about the drivers behind the strong advertisement growth in 2024 and the outlook for 2025?
A: Rui Chen noted that ad revenue grew by 28% year-over-year, driven by Bilibili's high-quality user base and content. The platform's appeal to young consumers and improvements in ad infrastructure contributed to this growth. For 2025, Bilibili plans to continue enhancing ad efficiency and expects to maintain above-industry growth rates.
Q: How do you view the trends of gross and net margins in 2025 and the mid- to long-term?
A: Xin Fan, CFO, stated that gross profit margin reached a record high of 36% in Q4, driven by high-margin gaming and advertising revenues. They expect continued margin expansion in 2025, with a long-term gross margin target of 40% to 45% and an operating profit margin target of 15% to 20%.
Q: What are the plans for the long-term operation of the game San Mou, and how do you plan to expand its reach?
A: Rui Chen emphasized the goal of making San Mou a long-lasting game with a lifecycle of at least five years. The game has shown strong user engagement and revenue generation. Plans include multi-platform expansion, significant updates, and overseas launches to attract more players.
Q: How does Bilibili plan to expand its user base and enhance brand awareness in 2025?
A: Rui Chen discussed the successful partnership with CCTV's Spring Festival Gala, which increased DAUs by 20% year-over-year. Bilibili plans to continue similar collaborations and campaigns, such as during summer vacations, to improve brand equity and facilitate user growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
