In a release issued under the same headline earlier today by Bilibili (NASDAQ:BILI), we are advised by the company that in the bullet point under the "Outlook" section, the figure "RMB1.4 billion" should have read "RMB1.04 billion." Complete corrected text follows.

Bilibili Inc. (“Bilibili” or the “Company”) (NASDAQ: BILI), a leading online entertainment platform for young generations in China, today announced its unaudited financial results for the second quarter ended June 30, 2018.

Second Quarter 2018 Financial and Operational Highlights:

  • Total net revenues 1 reached RMB1,026.5 million (US$155.1 million), a 76% increase from the same period in 2017.
  • Net loss was RMB70.3 million (US$10.6 million) and net loss margin was 7%, compared to net loss of RMB50.4 million and net loss margin of 9% in the same period in 2017.
  • Adjusted net loss2 was RMB19.5million (US$2.9 million) and adjusted net loss margin2 was 1.9%, compared to adjusted net loss of RMB13.5 million and adjusted net loss margin of 2.3% in the same period in 2017.
  • Average monthly active users (MAUs) reached 85.0 million, mobile MAUs reached 71.4 million, representing increases of 30% and 39% in the same period in 2017, respectively.
  • Average monthly paying users reached 3.0 million, a 177% increase from the same period in 2017. Average monthly paying users for mobile games reached 0.8 million, a 40% increase from the same period in 2017.       

“Dynamic, interactive content drove our strong second quarter performance, with continued growth momentum across our business,” said Mr. Rui Chen, Chairman of the Board and Chief Executive Officer of Bilibili. “Our platform is actively attracting a growing number of users and we continue to see high levels of engagement and user retention rates, thanks to our flourishing community. As we move through the second half of the year, we remain committed to further expanding our user base, curating and acquiring premium content, optimizing our monetization strategy, and reinforcing our leading position as the premier platform for China’s coveted Generation Z online entertainment community.”

“Our total revenues grew by 76% year-over-year to RMB1 billion in the second quarter,” said Mr. Sam Fan, Chief Financial Officer of Bilibili. “Revenue contribution from our advertising, live broadcasting and value-added services continues to grow. As we ramp up our commercialization strategy for non-gaming businesses, we aim to further broaden our reach, increase our brand equity and further diversify our revenue streams. The strong growth we are seeing in the number of paying users demonstrates our heightened monetization potential and gives us great confidence in our ability to convert even more paying users and expand our top-line.”

Second Quarter 2018 Financial Results

Total net revenues. Total net revenues increased to RMB1,026.5 million (US$155.1 million), representing an increase of 76% from the same period of 2017.

Mobile games. Revenues from mobile games increased to RMB791.0 million (US$119.5 million), representing an increase of 61% from the same period of 2017. The increase was primarily due to the increasing popularity of mobile games such as Fate/Grand Order and Azur Lane. Live broadcasting and Value-added services (VAS). Revenues from live broadcasting and VAS increased to RMB118.6 million (US$17.9 million), representing an increase of 186% from the same period of 2017, mainly attributable to the Company’s enhanced monetization efforts and promotion of its VAS services.Advertising. Revenues from advertising increased to RMB95.9 million (US$14.5 million), representing an increase of 132% from the same period of 2017. This increase was primarily attributable to additional revenue from brand advertising and the Company’s newly launched performance-based advertising on Bilibili’s highly trafficked platform.Other revenues. Other revenues increased to RMB21.1 million (US$3.2 million), representing an increase of 148% from the same period of 2017, primarily attributable to an increase in the sales of content-associated and other tie-in products through the Company’s e-commerce platform.Cost of revenues. Cost of revenues increased by 74% to RMB775.9 million (US$117.3 million), compared to RMB445.2 million in the same period of 2017. Revenue-sharing cost, a key component of cost of revenues, was RMB417.4 million (US$63.1 million), representing an increase of 84% from the same period in 2017.Gross profit. Gross profit increased to RMB250.7 million (US$37.9 million), representing an increase of 82% from the same period of 2017. Total operating expenses. Total operating expenses increased to RMB357.6 million (US$54.0 million), representing an increase of 88% from the same period of 2017. Selling and marketing expenses. Selling and marketing expenses were RMB127.8 million (US$19.3 million), representing a 146% increase year-over-year. The increase was primarily attributable to the increased channel and marketing expenses associated with Bilibili app, as well as the promotional expenses for the Company’s mobile games and an increase in headcount in selling and marketing personnel.

General and administrative expenses. General and administrative expenses were RMB97.9 million (US$14.8 million), representing a 30% increase year over year. The increase was primarily due to increased headcount in general and administrative personnel.

Research and development expenses. Research and development expenses were RMB131.9 million (US$19.9 million), representing a 108% increase year over year. The increase was primarily due to increased headcount in research and development personnel and increased of share-based compensation expenses.

Loss from operations. Loss from operations was RMB106.9 million (US$16.2 million), compared to a loss of RMB52.7 million in the same period of 2017.Income tax expense. Income tax expense was RMB2.4 million (US$0.4 million), compared to RMB2.3 million in the same period of 2017.    Net loss.3 Net loss was RMB70.3 million (US$10.6 million) for the second quarter of 2018, compared to RMB50.4 million in the same period of 2017. Adjusted net loss.2 Adjusted net loss, which is a non-GAAP measure that excludes share-based compensation expenses and amortization expense related to intangible assets acquired through business acquisition, was RMB19.5 million (US$2.9 million) compared to RMB13.5 million in the same period of 2017.Basic and diluted EPS and Non-GAAP basic and diluted EPS. Basic and diluted net loss per share were RMB0.26 (US$0.04), compared to RMB3.56 in the same period of 2017. Non-GAAP basic and diluted net loss per share were RMB0.07 (US$0.01), compared to RMB3.03 in the same period of 2017.Cash and cash equivalents and time deposits. As of June 30, 2018, the Company had cash and cash equivalents, as well as time deposits of RMB3.6 billion (US$548.1 million), compared to RMB764.8 million as of December 31, 2017. Recent Development

In accordance with the Central Cyberspace Administration of the People’s Republic of China’s (“CCA”) nationwide inspection of major internet platforms providing short-video content, the Bilibili mobile app was temporarily removed from certain smart phone app stores from July 26, 2018 through August 25, 2018. The Bilibili mobile app was fully restored on all app stores on August 25, 2018.

The Company intends to fully cooperate with the relevant authorities, and plans to further strengthen its content monitoring procedures and policies. The Company also plans to conduct a self-inspection by taking a comprehensive review of the content on its platform and double the headcount of content monitoring personnel.Outlook

For the third quarter of 2018, the Company currently expects:

  • Net revenues to be between RMB1.0 billion and RMB1.04 billion.

The above outlook is based on the current market conditions and reflects the Company’s preliminary estimates of market and operating conditions, and customer demand, which are all subject to change.

1 The Company has adopted ASU No. 2014-09, ''Revenue from Contracts with Customers (Topic 606)”, using the modified-retrospective transition approach beginning January 1, 2018. The adoption did not have a significant impact on the Company’s operating results for the three months and six months ended June 30, 2018 and comparable periods.2 Adjusted net loss and adjusted net loss margin are non-GAAP financial measures. For more information on non-GAAP financial measures, please see the section of “Use of Non-GAAP Financial Measures” and the table captioned “Unaudited Reconciliations of GAAP and Non-GAAP Results” set forth at the end of this press release.3 The Company has adopted ASU No. 2016-01, ''Financial Instruments," beginning January 1, 2018. The Company anticipates that the adoption of this new standard might increase the volatility of its investment income, net, as a result of remeasurement of its equity investments. For equity investments without readily determinable fair value, the Company elected to measure them at cost minus impairment (if any), plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investments of the same issuers. In the first quarter of 2018, the Company recorded an investment income of RMB20.6 million (US$3.1 million) as a result.

Conference Call

The Company’s management will host an earnings conference call at 9:00 PM U.S. Eastern Time on August 27, 2018 (9:00 AM Beijing/Hong Kong time on August 28, 2018).

Dial-in details for the earnings conference call are as follows:

United States: +1-866-519-4004International: +65-6713-5090Hong Kong: +800-906-601China: 400-620-8038Conference ID: 8488289

Participants should dial-in at least 5 minutes before the scheduled start time and ask to be connected to the call for “Bilibili Inc.”

Additionally, a live and archived webcast of the conference call will be available on the Company's investor relations website at http://ir.bilibili.com.A replay of the conference call will be accessible approximately two hours after the conclusion of the live call through September 3, 2018, by dialing the following telephone numbers:

United States: +1-855-452-5696International: +61-2-8199-0299Hong Kong: +800-963-117China: 400-632-2162Replay Access Code: 8488289

About Bilibili Inc.Bilibili represents the iconic brand of online entertainment with a mission to enrich the everyday life of young generations in China. Bilibili is a full-spectrum online entertainment world covering a wide array of genres and media formats, including videos, live broadcasting and mobile games. Bilibili provides an immersive entertainment experience and high-quality content that caters to the evolving and diversified interests of its users and communities, and has built its platform based on the strong emotional connections of Bilibili’s users to its content and communities.

For more information, please visit: http://ir.bilibili.com.

Use of Non-GAAP Financial Measures

The Company uses non-GAAP measures, such as adjusted net loss, adjusted net loss margin and non-GAAP basic and diluted net loss per share, in evaluating its operating results and for financial and operational decision-making purposes. The Company believes that the non-GAAP financial measures help identify underlying trends in its business by excluding the impact of share-based compensation expenses and amortization expense related to intangible assets acquired through business acquisition, which are non-cash charges. The Company believes that the non-GAAP financial measures provide useful information about the Company’s results of operations, enhance the overall understanding of the Company’s past performance and future prospects and allow for greater visibility with respect to key metrics used by the Company’s management in its financial and operational decision-making.

The non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The non-GAAP financial measures have limitations as analytical tools, and when assessing the Company’s operating performance, cash flows or liquidity, investors should not consider them in isolation, or as a substitute for net loss, cash flows provided by operating activities or other consolidated statements of operations and cash flows data prepared in accordance with U.S. GAAP.

The Company mitigates these limitations by reconciling the non-GAAP financial measures to the most comparable U.S. GAAP performance measures, all of which should be considered when evaluating the Company’s performance.

For more information on the non-GAAP financial measures, please see the table captioned “Unaudited Reconciliations of GAAP and Non-GAAP Results” set forth at the end of this press release.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars (“US$”) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to US$ were made at the rate of RMB6.6171 to US$1.00, the exchange rate on June 29, 2018 set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB, as the case may be, at any particular rate or at all.

Safe Harbor StatementThis announcement contains forward-looking statements. These statements are made under the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “confident,” “potential,” “continue” or other similar expressions. Among other things, the Outlook and quotations from management in this announcement, as well as Bilibili’s strategic and operational plans, contain forward-looking statements. Bilibili may also make written or oral forward-looking statements in its periodic reports to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Statements that are not historical facts, including but not limited to statements about Bilibili’s beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: Bilibili’s strategies; Bilibili’s future business development, financial condition and results of operations; Bilibili’s ability to retain and increase the number of users, members and advertising customers, provide quality content, products and services, and expand its product and service offerings; competition in the online entertainment industry; Bilibili’s ability to maintain its culture and brand image within its addressable user communities; Bilibili’s ability to manage its costs and expenses; PRC governmental policies and regulations relating to the online entertainment industry, general economic and business conditions globally and in China and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in the Company’s filings with the Securities and Exchange Commission. All information provided in this press release and in the attachments is as of the date of the press release, and the Company undertakes no duty to update such information, except as required under applicable law.

For investor and media inquiries, please contact:In China:Bilibili Inc.Juliet YangTel: +86-21-2509 9255 Ext. 8523E-mail: ir@bilibili.com

The Piacente Group, Inc.Ross WarnerTel: +86-10-5730-6201E-mail: bilibili@tpg-ir.com

In the United States:

The Piacente Group, Inc.Brandi PiacenteTel: +1-212-481-2050E-mail: bilibili@tpg-ir.com

 
BILIBILI INC.
Unaudited Condensed Consolidated Statements of Operations
(All amounts in thousands, except for share and per share data)
       
  For the Three Months Ended   For the Six Months Ended
  June 30, March 31, June 30,   June 30, June 30,
  2017   2018   2018     2017   2018  
  RMB RMB RMB   RMB RMB
             
Net revenues:            
Mobile games 491,613   688,496   791,013     840,651   1,479,509  
Live broadcasting and VAS 41,426   95,764   118,614     79,583   214,378  
Advertising 41,376   70,444   95,863     70,256   166,307  
Others 8,481   13,304   21,052     16,546   34,356  
Total net revenues  582,896      868,008   1,026,542      1,007,036    1,894,550  
             
Cost of revenues (445,238 )   (654,927 )    (775,858 )     (808,246 ) (1,430,785 )
Gross profit   137,658      213,081      250,684       198,790   463,765  
             
Operating expenses:            
Selling and marketing expenses (51,850 ) (78,894 ) (127,764 )   (92,765 ) (206,658 )
General and administrative expenses (75,080 ) (102,557 ) (97,940 )   (117,762 ) (200,497 )
Research and development expenses (63,390 ) (105,906 ) (131,898 )   (118,613 ) (237,804 )
Total operating expenses  (190,320 )  (287,357 )  (357,602 )    (329,140 )  (644,959 )
Loss from operations  (52,662 ) (74,276 )  (106,918 )   (130,350 )  (181,194 )
             
Other income:            
Investment (loss)/income, net (1,682 ) 25,460   818     4,005   26,278  
Interest income 137   842   19,833     333   20,675  
Exchange gains/(losses) 3,700   (9,967 ) 10,669     6,660   702  
Other, net 2,414   3,312   7,697     5,650   11,009  
Total other income 4,569   19,647   39,017     16,648   58,664  
Loss before income tax  (48,093 ) (54,629 ) (67,901 )    (113,702 ) (122,530 )
Income tax (2,323 ) (3,174 ) (2,405 )   (4,139 ) (5,579 )
Net loss  (50,416 ) (57,803 ) (70,306 )   (117,841 )  (128,109 )
Accretions to preferred shares redemption value (69,235 ) (63,197 ) (1,408 )   (122,258 ) (64,605 )
Deemed dividend in connection with repurchase of preferred shares (129,244 ) -   -     (129,244 ) -  
Net loss attributable to noncontrolling interests -   950   350     -   1,300  
Net loss attributable to the Bilibili Inc.'s shareholders (248,895 ) (120,050 ) (71,364 )   (369,343 ) (191,414 )
             
             
Net loss per share, basic (3.56 ) (1.73 ) (0.26 )   (5.24 ) (1.11 )
Net loss per ADS, basic -   -   (0.26 )   -   (1.11 )
Net loss per share, diluted  (3.56 )  (1.73 )  (0.26 )    (5.24 ) (1.11 )
Net loss per ADS, diluted -   -   (0.26 )    -   (1.11 )
Weighted average number of ordinary shares, basic 69,969,893   69,336,926    273,886,172      70,550,186   172,176,602  
Weighted average number of ADS, basic -   -    273,886,172      -   172,176,602  
Weighted average number of ordinary shares, diluted 69,969,893   69,336,926   273,886,172      70,550,186   172,176,602  
Weighted average number of ADS, diluted -   -   273,886,172      -   172,176,602  
             

The accompanying notes are an integral part of this press release. 

 
BILIBILI INC.
NOTES TO UNAUDITED FINANCIAL INFORMATION
(All amounts in thousands, except for share and per share data)
             
  For the Three Months Ended   For the Six Months Ended
  June 30, March 31, June 30,   June 30, June 30,
  2017 2018 2018   2017 2018
  RMB RMB RMB   RMB RMB
             
             
Share-based compensation expenses included in:            
Cost of revenues     1,648 8,680  7,555      2,968  16,235
Selling and marketing expenses   870 3,548  2,473      1,775  6,021
General and administrative expenses   31,769 33,515    30,296      35,003  63,811
Research and development expenses   2,423 7,876  9,490      4,550  17,366
Total   36,710   53,619  49,814      44,296  103,433
             

 

 
BILIBILI INC.
Unaudited Condensed Consolidated Balance Sheets
(All amounts in thousands, except for share and per share data)
 
  December 31, June 30,
  2017   2018  
  RMB RMB
     
Assets    
Current assets:    
Cash and cash equivalents   762,882    3,624,784  
Time deposits   1,960    1,985  
Accounts receivable, net   392,942   355,945   
Receivables due from related parties   29,660    23,778  
Prepayments and other current assets   477,265    718,081  
Short‑term investments   488,391    345,784  
Total current assets   2,153,100    5,070,357  
Non‑current assets:    
Property and equipment, net   186,418    248,336  
Production cost   20,796    53,202  
Intangible assets, net   426,292    868,144  
Goodwill   50,967    50,967  
Long‑term investments   635,952    819,318  
Total non‑current assets   1,320,425    2,039,967  
Total assets   3,473,525    7,110,324  
Liabilities    
Current liabilities:    
Accounts payable   596,507    946,371  
Salary and welfare payables   148,605    140,926  
Taxes payable   24,992    29,896  
Deferred revenue   572,848    926,275  
Accrued liabilities and other payables   49,318    98,984  
Amount due to related parties   5,724    6,763  
Total current liabilities   1,397,994    2,149,215  
Total liabilities   1,397,994    2,149,215  
     
Total mezzanine equity   4,015,043     -  
     
Total Bilibili Inc.’s shareholders’ (deficit)/equity    (1,939,512 ) 4,961,409  
Noncontrolling interests   -      (300 )
Total shareholders’ (deficit)/equity   (1,939,512 )  4,961,109  
       
Total liabilities, mezzanine equity and shareholders’ (deficit)/equity   3,473,525    7,110,324  
         

 

 
BILIBILI INC.
Unaudited Reconciliations of GAAP and Non-GAAP Results
All amounts in thousands, except for share and per share data
       
  For the Three Months Ended   For the Six Months Ended
  June 30, March 31, June 30,   June 30, June 30,
  2017   2018   2018     2017   2018  
  RMB RMB RMB   RMB RMB
             
Net loss   (50,416 )   (57,803 )    (70,306 )    (117,841 )   (128,109 )
Add:            
Share-based compensation expenses  36,710     53,619     49,814       44,296    103,433  
Amortization expense related to intangible assets acquired through business acquisition  246     1,022    1,022      492    2,044  
Adjusted net loss (13,460 ) (3,162 ) (19,470 )   (73,053 )   (22,632 )
             
Net loss attributable to the Bilibili Inc.'s shareholders (248,895 )  (120,050 )   (71,364 )    (369,343 )   (191,414 )
Add:            
Share-based compensation expenses  36,710    53,619     49,814      44,296    103,433  
Amortization expense related to intangible assets acquired through business acquisition  246   1,022   1,022     492    2,044  
Adjusted net loss attributable to the Bilibili Inc.'s shareholders  (211,939 )  (65,409 )   (20,528 )    (324,555 )   (85,937 )
Adjusted net loss per share, basic  (3.03 )  (0.94 )  (0.07 )    (4.60 )  (0.50 )
Adjusted net loss per ADS, basic  -    -    (0.07 )    -    (0.50 )
Adjusted net loss per share, diluted  (3.03 )  (0.94 )  (0.07 )   (4.60 )  (0.50 )
Adjusted net loss per ADS, diluted  -   -    (0.07 )   -    (0.50 )
Weighted average number of ordinary shares, basic 69,969,893   69,336,926   273,886,172     70,550,186   172,176,602  
Weighted average number of ADS, basic -   -   273,886,172     -   172,176,602  
Weighted average number of ordinary shares, diluted 69,969,893   69,336,926   273,886,172     70,550,186   172,176,602  
Weighted average number of ADS, diluted -   -   273,886,172     -   172,176,602  
                       
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