Chinese video platform Bilibili reported on Thursday revenue of RMB 4.9 billion (US$732.9 million), a 9% yearly increase for the second quarter of 2022, continuing its trend of slowing growth. The firm’s net loss narrowed and saw an increase in monthly active users (MAUs).
Why it matters: Bilibili continued to operate on a loss since it went public on the Nasdaq in 2018. The pandemic resurgence and month-long lockdown in Shanghai, where Bilibili is based, have hit the company’s income. Slowing growth will make it harder for the company to achieve its goal of turning a profit in 2024.
Details: Bilibili has seen revenue growth slowing since the second quarter of 2021, even as its MAU numbers during the same period have stayed strong, with about 30% yearly growth each quarter.
- A decrease in its mobile gaming business contributed to the platform’s slow growth in the second quarter, with revenues decreasing 15% compared with the second quarter of 2021 to $156.2 million. Bilibili attributed this to a “lack of popular new exclusively distributed game releases” in their financial report for the second quarter of 2022.
- Value-added services (VAS) revenues were $314.0 million, an increase of 29% from the same period of 2021. Other services, such as advertising and e-commerce, saw slower yearly growth in the second quarter of 10% and 4%, respectively.
- Bilibili’s net loss in the second quarter of 2022 expanded 79% compared with the same period of 2021 to $300.2 million. However, the figure narrowed by 17% from last quarter’s $360.3 million.
- “We believe the largest impact of the pandemic is behind us, and we are poised to regain our growth momentum and improve our margins in the second half of 2022,” said Chen Rui, chairman and CEO of Bilibili. He added that the firm is confident of hitting 400 million MAUs in 2023.
- “The primary listing on The Main Board of The Stock Exchange of Hong Kong Limited is expected to be effective on October 3, 2022,” according to Sam Fan, CFO of the firm. Fan detailed that “our binary approach will further expand our investor base and provide us with more flexibility in the capital market.”
- Bilibili’s stock prices fell more than 15% on the Nasdaq and Hong Kong stock exchanges after its financial results were released.
Context: Bilibili has a strong user retention rate due to its heavy focus on catering to a community feeling. CEO Chen Rui said at a company anniversary event in June that 65% of the first batch of users registered in 2009, when the platform was launched, are still active on the platform.
- Yet it has struggled to become more profitable and underwent major internal restructuring in an attempt to boost income in July.
- The platform also introduced a new TikTok-like story mode last year in the hopes of increasing advertising income and video views. Daily views for the vertical mode grew four times (in Chinese) in the second quarter compared with the same period of last year.