Bilibili's losses continued to narrow in 2023Q4, and the 2024Q3 break-even balance is expected. Bilibili's 2023Q4 revenue was 6.35 billion yuan, yoy +3.4%. Among them, value-added services, advertising, games, IP derivatives and others were 28.6/19.3/1.01 billion yuan, respectively, yoy +21.6%/+27.6%/-12.1%/-51%.
2023Q4 gross profit margin 26.1%, yoy+5.8pct. The sales expense rate is 17.7%, yoy-2.9pct.
The adjusted net loss of 2023Q4 to mother was 560 million, and the adjusted loss rate to mother was -8.8%, yoy+12.6pct.
Revenue of $225 billion in 2023, yoy +3%, adjusted net loss to mother of $3.4 billion, yoy -49%. According to the company's performance report, revenue is expected to accelerate and achieve a double-digit growth rate in 2024, and advertising revenue will grow even faster.
Non-GAAP operating break-even is expected in 2024Q3.
The creative ecosystem is stable, and traffic remains steady. In terms of creative ecology, as of 2023Q4, the average number of active users increased by 16%, and the average number of monthly video submissions exceeded 23 million, an increase of 31%. The number of UP stocks above 10,000 powder is also increased by 30%. Over 3 million creators received revenue at Station B throughout the year, an increase of 30%. In terms of content composition, Q4 PUGV video accounts for 95%.
In terms of user growth, Q4 DAU increased 8% year-on-year to 100 million, the DAU/MAU ratio reached 30%, and MAU was 336 million. In terms of activity, the average number of daily video views for the whole year was 4.3 billion, the same increase of 25%, the average number of monthly interactions was 151 billion, and the user usage time stabilized at 95 minutes per day. In terms of retention, the 12-month retention rate for regular members has stabilized at 80%.
Advertising revenue continues to rise, and e-commerce delivery performance is impressive. 2023Q4's advertising revenue increased 28% year over year, with performance advertising revenue up 60% year over year. The company continues to adhere to the open loop strategy, and e-commerce delivery performance is outstanding. During the Double 11 period, UP's main video and live streaming GMV increased rapidly by more than 250% year on year, the number of live streaming shows increased 105% year over year, and the new customer rate brought in by the mother and child industry was nearly 90%. During the Double 12 period, UP's single live streaming sales volume exceeded 50 million. More than 26 million daily users watched delivery content throughout the year, and the number of users who clicked on redirected ads increased by more than 200% over the same period last year. According to the results, the company expects advertising to continue to grow at a high rate in 2024.
Live streaming is booming, and games are still under pressure in the short term. In terms of live streaming, Station B promotes the launch of more UP hosts through the integrated operation of live streaming and video ecosystems. Nearly 1 million anchors began broadcasting on Station B in Q4 2023. In 2023, more than 1.8 million UP owners received revenue through live streaming, and more than 200 UP masters received more than 1 million sales for paid courses. In 2023, the monthly subscription revenue for Big Sailing accounts for 1/3 of the total live streaming revenue. In 2024, the live streaming business will focus on quality and increase gross margin.
On the game side, we expect that the pressure may continue in the short term. Three reserve games will receive edition numbers, including the strategy category “Three Kingdoms: Determining the World”, the card category “Blazing Sky”, and “Something New.”
Investment advice: The driving force for the company's continued loss reduction in 2024 comes from the continued growth of high-margin business and the decline in operating expenses such as R&D due to organizational restructuring. We expect the company's 2024-2026 revenue to be 254/283/31.3 billion yuan, yoy +13%/11%/11%; non-GAAP net profit - 6/9/20 billion yuan. Maintain an “Overweight” rating.
Risk warning: User growth falls short of expectations, monetization efficiency falls short of expectations, and changes in the macro environment have exceeded expectations.