“Science and Technology Innovation Board Daily”, May 24 (Reporter Zhang Yangyang) Bilibili (“Station B”) announced its financial report for the first quarter ending 2024 yesterday afternoon. In the first quarter, Station B's total revenue increased 12% year over year to 5.66 billion yuan. Gross profit was 1,605 billion yuan, up 45% year on year, gross margin was 28.3%, compared to 21.8% in the same period last year. The adjusted net loss was $456 million, a decrease of 56% year-on-year.

In terms of specific data, the advertising business continued to be strong, with a year-on-year increase of 31% to 1.67 billion yuan; value-added services (live streaming) revenue was 2,529 billion yuan, up 17% year on year; game revenue was 983 million yuan, down 13% year on year; and revenue from IP derivatives and other products was 484 million yuan, down 5% year on year.

In a situation where the game business continues to weaken and the IP derivatives business is underdeveloped, advertising and live streaming are unquestionably the mainstay of Station B's survival.

A number of internet analysts believe that looking at Station B's earnings report for the first quarter as a whole, the performance was slightly better than expected. The main reason was that commercialization was accelerated, and the overall profit was slightly higher than expected due to high-margin advertising.

In the first quarter, Station B continued to integrate and optimize advertising products, upgrade the performance delivery platforms “Bihuo” and “Sanlian”, and optimize the delivery functions of the fireworks platform, open live broadcasts and dynamic business orders, lower the advertising threshold, and provide advertisers with more convenient and intelligent advertising tools.

It is also the optimization of advertising products and the continuous improvement of delivery efficiency. Financial data shows that in the first quarter, station B performance advertising revenue increased by more than 50% year-on-year.

It should be pointed out that Station B's balance between accelerated advertising commercialization and user experience also often puts this company in an embarrassing situation.

Yesterday, “Station B cancels the broadcast time index and revises the external display” topped the list of popular searches. The incident began when a user complained that “Station B changed the broadcast time, and it hasn't come out in 1 year.”

In June of last year, Station B announced that it would use broadcast length instead of number of plays to encourage the creation of high-quality long video content, while also proving the commercial value of its platform.

The background at the time was that medium and long videos were less popular than short videos, which affected advertisers' advertising. It was difficult for UPs to monetize, and the commercial value of the B-station platform was questioned as a result.

Station B's move at the time seemed to the outside world to speed up commercialization and solve the revenue problems of the platform and UP owners. But now, that plan has officially been abandoned.

Yesterday, Fang Fang, the head of the B-station community and product, posted an article through his personal B-site account. Regarding the broadcast time index that was previously launched, the team has decided to cancel the apparent revision of the broadcast time index, saying that it is too idealistic and confident, and does not take into account the degree of acceptance and understanding from the outside world.

However, proving one's ability to commercialize will still be the core issue facing Station B, especially this year — the year to achieve the goal of non-GAAP break-even.

A positive sign to help achieve break-even is that Station B's game business, which had been sluggish until now, may pick up in the second half of the year.

In April, Station B launched an exclusive agency game, “Everything Is So New”. This card game, which has an anthropomorphic worldview of cultural relics, was widely praised by players as soon as it was launched. The company expects to release the highly anticipated strategy game “Three Kingdoms: Designing the World” on June 13. As of today, more than 2 million players have pre-registered. The company also plans to launch a role-playing game “Blazing Sky” from Japan in the third quarter.

In terms of user size, in the first quarter, the average number of daily active users of Station B increased 9% year-on-year to 102 million. The average monthly active users exceeded 341 million, and the average daily usage time was 105 minutes, all of which reached record highs.