Chinese video platform Bilibili finanlly turns profitable after years of losses. The company reported a revenue of 7.3 billion yuan for the third quarter, a 26% year-on-year increase, accelerating significantly from the previous two quarters.
The company reported a net loss of 79.8 million yuan, narrowing by 94% from a year earlier. Adjusted net profit under non-GAAP rules reached 236 million yuan, a sharp turnaround from a loss of 863 million yuan in the same period last year.
This marked Bilibili’s first-ever profitable quarter since its public listing in 2018, in line with the company’s earlier guidance on the expected timeline for profitability.
Bilibili’s path to profitability has been closely watched, particularly amid the ongoing tension between maintaining content quality and driving commercialization on the platform. In 2024, Bilibili has focused on reducing losses, with its adjusted net loss narrowing in the first two quarters of this year.
The company’s gross profit for the quarter surged by 76% year-on-year to 2.547 billion yuan, with the gross margin rising to 34.9%. Bilibili attributed this improvement to stable operating costs and increased revenue. Although revenue growth slowed for its value-added services and advertising segments, its gaming business saw a sharp 84% increase, reversing a decline in the previous quarters.
Bilibili’s operating costs and expenses saw modest increases in the quarter. Operating expenses grew by 9% to 4.76 billion yuan, with content costs dropping but rising revenue-sharing costs due to the growth in the gaming segment. Operating expenses surging by 2% to 2.614 billion yuan.
In the earnings call, CEO Chen Rui used AI-generated voice to deliver his English business review. In the Q&A session, he emphasized that profitability was inevitable for Bilibili, given China’s status as the largest single video consumption market globally. He pointed out that Bilibili’s strength in mid- and long-form video content, coupled with the abundant supply of video content, positioned the company well to meet the demand for high-quality, unique content, a trend he believes is driving the platform’s success.
Looking ahead, Bilibili plans to continue its focus on community user growth and commercial revenue expansion, particularly in advertising and gaming, which are expected to drive higher gross margins and revenue ceilings. The company also aims to use its commercial success to support its content ecosystem, which in turn is expected to create a positive feedback loop.
Bilibili’s monthly active users (MAU) and daily active users (DAU) both reached new highs, with MAU at 348 million, up 2% year-on-year and 12 million higher than the previous quarter. DAU rose 4.4% to 107.3 million, with a daily average usage time per user increasing from 100 minutes last year to 106 minutes. The average age of users is 25.
Thanks to a surge in traffic during the summer, Bilibili’s daily video views in the third quarter surpassed 5.7 billion, up 23% year-on-year. Nearly 2.7 million creators (UP owners) earned revenue on the platform this year, with total income from ads and value-added services increasing by 24%, while revenue from content paid by users (charging) grew by over 400%.
Bilibili’s business segments included value-added services, advertising, gaming, IP derivatives, and others, which contributed 38%, 29%, 25%, and 8% of total revenue, respectively. Gaming revenue’s share rose to 25% from 17% in the previous quarter
The value-added services, primarily from live streaming and recharge products, brought in 2.8 billion yuan, up 9% year-on-year. By the end of the third quarter, Bilibili had 21.97 million active paid members, with over 80% subscribing annually or through automatic renewal.
Advertising revenue grew by 28% to 2.094 billion yuan, driven by improvements in ad products and efficiency. Key sectors contributing to ad revenue included gaming, e-commerce, digital appliances, internet services, and automotive, with performance-based advertising up nearly 50%.
During the Double 11 shopping festival, Bilibili saw a 154% year-on-year increase in GMV (Gross Merchandise Volume), with ad revenue rising 50% compared to last year. Bilibili also noted a nearly 80% increase in the number of creators participating in the shopping event.
Bilibili’s game business, which had seen declining revenue for the past two years, saw a rare sharp increase in the third quarter, with gaming revenue rising by 84% year-on-year to 1.8 billion yuan, marking the fastest growth among all segments. The success of the game “Three Kingdoms: Strategy of the World,” which Bilibili launched exclusively in the second quarter and became the fastest product in the company’s history to reach 1 billion yuan in revenue, continued to drive the results.
Gaming had been Bilibili’s largest revenue source but had experienced negative growth in several quarters after Q4 2020. CEO Chen Rui took over the gaming business in November 2022 and restructured the organization. Chen believes the success of “Three Kingdoms: Strategy of the World” demonstrates the platform’s focus on long-term operation and user retention, and in 2024, the focus will shift to the anime-based game “Jujutsu Kaisen.”
Additionally, IP derivatives and other revenue were 567 million yuan, down 2% year-on-year.