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Bilibili reports better-than-expected Q4 earnings results despite doubling losses

The company expects the first quarter of 2020 to be one of the strongest first quarters yet.

Photo: KrASIA

Chinese video platform Bilibili (NASDAQ:BILI) saw revenues jump by 74% year-on-year (YoY) to USD 288.4 million thanks to a diversified revenue stream, beating analysts’ estimates, the company announced Tuesday on its Q4 earnings call.

The company also reported double net losses compared to the previous year. Shares fell 3.5% in after-hours trading to USD 23.5 per share following the earnings announcement.

“Q1 is shaping up to be one of the strongest first quarters in our corporate history,” Sam Fan, CFO of Bilibili, said during an earnings call, adding that people have spent more time on video platforms during Chinese New Year and in light of the coronavirus outbreak.

The company expects net revenues from Q1 to be between RMB 2.15 billion and RMB 2.20 billion.

In the fourth quarter of 2019, the platform claimed to have 130.3 million average monthly active users (MAUs) and 37.9 million daily average users (DAUs), up 40% and 41% compared to the same period in 2018. In addition, average monthly paying users reached 8.8 million, a 100% increase from the Q4 2018.

The company brought in USD 125.2 million from its mobile games business, accounting for 43.4% of total revenues and representing a growth of 22% YoY. Bilibili has sought to reduce its dependence on the lucrative business mobile games segment to diversify its revenue sources which, at the end of 2018, took up more than 60% of total revenues.

Meanwhile, live broadcasting and value-added services (VAS) saw a whopping 183% YoY increase, giving the company USD 82 million in revenue in the reported quarter. Revenues from the advertising department increased by 81% to USD 41.6 million, while e-commerce and other businesses, still relatively minuscule, saw USD 39.6 million in revenues with a substantial increase of 241% from the same period of 2018.

“2019 was a transformational year as we gained broader recognition as the go-to online entertainment platform in China,” said Bilibili CEO Chen Rui. “To further our growth momentum in 2020, we will continue to cultivate a healthy content ecosystem and enhance our community bond.” 

In the 2019 fiscal year, Bilibili booked total net revenues of USD 973.6 million, indicating a 64% YoY growth.

Notably, Bilibili had a widening net loss of RMB 387.2 million (USD 55.6 million) for the quarter ended in December, compared to RMB 190.8 million in the same period of 2018. Its total operating expenses in the fourth quarter increased by 68% YoY to USD 117.5 million. Sales and marketing expenses grew 127% YoY to USD 59.3. The company cited promotional activities and an increased staff count as the reasons.

To expand its user base by offering more diverse content, Bilibili hosted a New Year’s Eve concert dubbed “The Most Beautiful Night of 2019,” which garnered more than 90 million views. It also paid USD 113 million for a three-year exclusive streaming agreement for the League of Legends World Championship in China. The firm also signed an exclusivity contract with Feng Timo, former streaming star of Tencent-backed Douyu, for a reported price of RMB 80 million.

However, Bilibili—which first grew as a niche site for comics and anime, and mainly known for being hip to the Gen Z—faces a challenge in retaining its core community. While the number of users continues to increase, the number of monthly active creators and uploaded videos dropped to 1 million and 2.8 million, respectively, in Q4 from the previous quarter’s 1.1 million and 3.1 million.