Bilibili Reports Narrowed Q4 Losses, Exceeding Expectations in Gaming Revenue Decline.
Domestic well-known video bullet screen platform, Bilibili's Q4 financial report for 2023, released on March 7th, revealed a revenue of CNY 6.3 billion, in line with expectations of CNY 63.2 billion, marking a 3% year-on-year increase. The net loss narrowed to CNY 1.3 billion, a 13% reduction from the previous year. Adjusted net loss, excluding non-GAAP items, decreased by 58% to CNY 560 million, with an adjusted loss per share of CNY 1.34, surpassing market expectations of CNY 1.43.
For the entire year, the company's total revenue reached CNY 22.5 billion, reflecting a 3% increase year-on-year, while the net loss reduced by 36% to CNY 4.8 billion. Adjusted net loss, excluding non-GAAP items, decreased by 49% to CNY 3.4 billion.
Breaking down the Q4 total revenue of CNY 6.4 billion, value-added services generated CNY 2.9 billion, a 22% increase from the same period in 2022, primarily driven by growth in live broadcasting and other value-added services. Advertising revenue amounted to CNY 1.9 billion, up 28% from the previous year, attributed to the optimization of advertising products and improved advertising efficiency. Mobile game revenue decreased by 12% to CNY 1 billion, surpassing market expectations.
Bilibili attributed the decline in mobile game revenue to the high base effect from the launch of "Time and Space Hunter 3" in the second half of 2022. However, revenue from successful older games such as "Azur Lane" and "FGO" remained relatively stable. In the first quarter of this year, Bilibili did not launch any new games, but upcoming self-published games "Blazing Domains" and "Three Kingdoms: Strategize to Win" have already obtained permits.
In terms of profit, Bilibili achieved a gross profit of CNY 1.7 billion in Q4, a 33% year-on-year increase, with a gross profit margin of 26.1%, significantly higher than the 20.3% from the same period the previous year. The company attributed the growth in gross profit to the reduction in platform operating costs resulting from improved monetization efficiency.
Looking at the entire year, Bilibili's gross profit margin for 2023 reached 24.2%, a 6.6 percentage point increase from 2022's 17.6%. In the last quarter, Bilibili's operating loss narrowed by 44% to CNY 1.3 billion, or 53% to CNY 635 million after adjustments. The net loss also reduced by 13% to CNY 1.3 billion. As a result of reduced losses and increased revenue, Bilibili achieved a positive operating cash flow of CNY 640 million in the last quarter and throughout the entire year.
Bilibili's average daily video views for the entire year reached 4.3 billion, a 25% increase year-on-year. By the end of Q4, the platform had 21.9 million paying subscribers. Additionally, according to Bilibili's data, in the last quarter, the number of active content creators increased by 16% year-on-year, with a 30% increase in creators with over ten thousand followers. The monthly average number of submissions exceeded 23 million, marking a 31% increase.
In the last quarter, following the milestone of surpassing 100 million users in the third quarter, Bilibili's user base saw a slight increase to 101 million, with daily average usage remaining steady at 95 minutes. There are signs of a plateau in the growth of the platform's ecosystem traffic. Content within the community continues to diversify, with daily viewership of gaming and knowledge categories maintaining over 30% growth, while the technology category experiences nearly 40% growth. Notably, videos related to the AIGC (Artificial Intelligence, Gaming, and Computing) have gained significant traction, propelling a 60% year-on-year increase in daily viewership for knowledge-based content to over 100,000 submissions.
Bilibili also stated that the community ecosystem has provided a more diverse range of monetization avenues for numerous content creators. Throughout the past year, over 3 million content creators earned income through various monetization methods on Bilibili, marking a 30% year-on-year increase. Among them, the number of content creators earning income through advertisements saw a 94% year-on-year increase. Furthermore, e-commerce and live streaming have presented additional opportunities, with individual live streamers generating over CNY 50 million in sales during the "Double 12" period. In addition to commercial collaborations, paid content has become a significant revenue source for many content creators. Over 1.8 million content creators earned income through live streaming throughout the year, while over 200 creators generated over CNY 1 million in revenue through paid courses. Moreover, individual exclusive charging videos from content creators amassed nearly CNY 4 million in revenue.
During the last quarter, Bilibili's Guangzhou-based R&D studio, Xinyuan Interactive, was disbanded, leading to the cessation of several ongoing projects, resulting in a 25% decrease in stock incentive expenses for R&D personnel. Cost optimization and revenue generation remain key focal points for Bilibili: sales and marketing expenses reduced by 11% year-on-year to CNY 1.1 billion; general and administrative expenses decreased by 37% year-on-year to CNY 512 million; and R&D expenses decreased by 11% year-on-year to CNY 1.3 billion.
During the subsequent earnings call, Bilibili's Chairman and CEO, Chen Rui, expressed confidence in achieving profitability by the third quarter of 2024 and commencing a profitable trajectory. Chen emphasized that the primary objectives for Bilibili in 2024 are to achieve profitability, enhance commercial capabilities, further optimize gross profit margins, and prudently manage expenses. Additionally, the company aims to maintain a healthy content ecosystem, with a focus on discovering and promoting high-quality content creators and providing seamless monetization channels for them.
At the time of publication, Bilibili's Hong Kong-listed shares were priced at HKD 84.00 per share, with a total market capitalization of HKD 34.621 billion; its U.S.-listed shares were priced at USD 10.60 per share, with a total market capitalization of USD 4.369 billion.