Q3 2022 Bilibili Inc Earnings Call
Speaker 2: The conference will begin shortly. To raise your hand during Q&A, you can dial star 11.
Speaker 3: Good day and welcome to the Bilibili third quarter 2022 financial results and business update conference call. Today's conference is being recorded. At this time, I would like to turn the conference over to Juliet Yang, Executive Director of Investor Relations. Please go ahead.
Speaker 4: Thank you, operator. During this call, we'll discuss business outlook and make forward-looking statements. These comments are based on our predictions and expectations as of today. Actual events or results could differ materially from those mentioned in today's news release and in this discussion due to a number of risks and uncertainties.
Speaker 4: including those mentioned in our most recent filing with SEC and Hong Kong stocks change.
Speaker 4: The non-GAAP financial measures we provide are for comparison purpose only. Definition of these measures and a reconciliation table are available in the news release we issued earlier today.
Speaker 4: As a reminder, this conference is being recorded. In addition, an investor presentation and a webcast replay of this conference call will be available on the IR website at IR.billabilly.com.
Speaker 4: Joining us today from Bilibili Center Management are Mr. Ray Chen, Chairman of the Board and Chief Executive Officer, Ms. Kali Li, Vice Chairwoman of the Board and Chief Operating Officer, and Mr. Sam Fan, Chief Financial Officer. And I will now turn the call over to Mr. Fan, who will read the prepared remarks on behalf of Mr. Chen. Ray Chen, Chairman of the Board and Chief Operating Officer, B compiler, Butterfield wheel drive-through
Speaker 5: Thank you, Juliette. And thank you everyone for participating in our third quarter 2022 results conference call. I'm pleased to deliver today's opening remarks on behalf of Mr. Chen.
Speaker 5: Our community, which is the foundation of our business and key to our long-term success, will continue to expand.
Speaker 5: In the third quarter, DAUs reached more than 90 million and may use nearly 333 million, both up 25% year-over-year.
Speaker 5: Average daily time spent per user was 96 minutes in the third quarter.
Speaker 5: After 8 minutes from the same period last year.
Speaker 5: With that, the total time spent on Bilibili grew by 37% year over year.
Speaker 5: Having said that, we still face micro-headwinds and uncertainties that are low over the industry.
Speaker 5: To cope with the challenging environment, we have reprioritized our goals and promoted to focus on two key topics that will help us turn the corner.
Speaker 5: First, our users. As our MAUs have reached a sizable base of nearly 333 million, we think it is time to shift our primary focus to DAU growth.
Speaker 5: DAUs not only represent the quality and the sustainability of our community, but also directly linked to our influential power as a platform.
Speaker 5: as well as various commercial prospects.
Speaker 5: particularly in terms of revenue generation from our tiling and vastness.
Speaker 5: With our improving product offerings and refined algorithms, we can continue to grow our DAU space and improve our DAU to MAU ratio with reduced sales and marketing spend.
Speaker 5: Second, we are committed to improving our financials by expanding our growth margin and narrowing our losses.
Speaker 5: After a challenging first half of the year, revenues in the third quarter grow to RMB up 18% quarter over quarter and 11% year over year.
Speaker 5: in the third quarter. We continue to take various actions to tighten our spending.
Speaker 5: Growth margin improved to 18% up 3% points sequentially.
Speaker 5: Sales and marketing expenses as a percentage of total revenues were 21%, down 3% points sequentially.
Speaker 5: Our non-gamut net loss ratio also narrowed by 10 percentage points compared with the prior quarter.
Speaker 5: Looking ahead, we will implement a number of additional cost control measures and further rationalize our marketing expenses at head-com planning.
Speaker 5: Specifically, we are still relying our investment in R&D and cutting down on projects with lower chance of success and being extra mindful when exploring new opportunities.
Speaker 5: At the same time, we are centralizing our resources in areas related to improving commercialization efficiency and user experience.
Speaker 5: These adjustments will be completed by the end of this year.
Speaker 5: Accordingly, we expect our sales, marketing and R&D expenses to peak this year and start to decline in 2023, with net loss narrowing further accordingly.
Speaker 5: With that, I'd like to provide a brief update on our core pillars of content, community, and commercialization.
Speaker 5: Starting with content.
Speaker 5: Over the years, as young generations on Bilibili grow up and enter into new stages of life, there are interests involved.
Speaker 5: driving Quito's passion as well as the expansion of our content categories.
Speaker 5: So on top of our traditional strong content verticals, we have seen emerging categories such as automobile, home decoration, an internal design, and a baby M maternity.
Speaker 5: In the third quarter, 3.8 million monthly active content creators on Bilibili readily accommodated these varied needs.
Speaker 5: Creating here 60 million new videos on a monthly basis.
Speaker 5: of 14% and 54% year-over-year, respectively.
Speaker 5: The expanding content library drives the overall traffic growth on our platform.
Speaker 5: Total video views grow by 64% year over year, driven by both PUGV and story mode content, which grow by 34% and over 470% year over year, respectively.
Speaker 5: Particularly, with improving content distribution capabilities of Story Mode, content creators can build their fan base more easily.
Speaker 5: sharing their content with other kind-rel spreads on Bilibili.
Speaker 5: The virus monetization process we have cultivated for accounting creators continues to offer more creators more opportunities to make money while doing things they love.
Speaker 5: In the third quarter, over 1.2 million content creators earned income through multiple channels on BIDI-BIDI, up 74% year-over-year.
Speaker 5: looking at our community.
Speaker 5: We consistently deepen our user engagement in our community with our featured and diverse content. As I mentioned earlier, the average daily user time spent reaches a recall high of 96 minutes, up 8 minutes from the same period last year.
Speaker 5: Our monthly injections also increased 41% year-over-year to 14.4 billion.
Speaker 5: Furthermore, the number of official members on our site was up by 37% year-over-year to 183 million.
Speaker 5: maintaining a stable 12-month retention rate above 80 percent.
Speaker 5: Now let's look at our commercialization and the prospects for near and long-term monetization.
Speaker 5: First, I will buy spinners.
Speaker 5: Our vast revenues were the RMB 2.2 billion.
Speaker 5: up 16% year-over-year in the third quarter.
Speaker 5: By further integrating live broadcasting with our PUGV ecosystem, we maintain our unique platform advantage.
Speaker 5: we have 67% more live broadcasting hosts in the third quarter this year than for the same period last year.
Speaker 5: The number of live broadcasting paying users increased by 79% year-over-year in the third quarter.
Speaker 5: The number of premium memberships for the third quarter grow 12% year-over-year to 20.4 million.
Speaker 5: In December , we plan to launch our self-produced Chinese anime title, The Three-Body Problems.
Speaker 5: This highly anticipated title is expected to attract a wide range of sci-fi lovers to our preferred social media,AG SH preservation links.
Speaker 5: Looking at our advertising, despite softness in microenvironment, net revenues would RMB for billing, an increase of 16% year-over-year.
Speaker 5: We further strengthen our integrated marketing campaign offerings by combining diverse ad products and conversion modules across different video viewing scenarios.
Speaker 5: Story Mode ads, as part of ad offerings, continue to capture more performance-based ad dollars in the third quarter.
Speaker 5: Our top advertising verticals in the third quarter were games, digital products and home appear live, skincare and cosmetics.
Speaker 5: verticals in the third quarter were games, digital products and home action lines, skincare and cosmetics, automotive, digital, digital, digital, digital, digital, digital, digital,
Speaker 5: and food and privilege.
Speaker 5: And for games, our game RAM use grows 6% year-over-year to RMB 1.5 billion, largely driven by the new titles we launched in the domestic and overseas market in the third quarter.
Speaker 5: Developing house, distribute globally remains our co-gain strategy.
Speaker 5: which has started to bear fruit.
Speaker 5: Revenue generated from self-determined games contribute 9% of our total game revenue in the third quarter.
Speaker 5: Looking at our publics, we have two games approved for domestic relief this year and earlier next year.
Speaker 5: including one self development title.
Speaker 5: Five titles are slated to launch in the overseas markets early next year.
Speaker 5: Facing the market's micro-concentrates, our primary goal is clear, improving our gross profit margin and narrowing our net loss.
Speaker 5: By expediting our commercialization, we believe our top line can catch up with our community scare.
Speaker 5: While we remain committed to our goal of reaching non-GAAP operating breakeven by 2024, we will also actively manage our cash position and liabilities.
Speaker 5: We believe we can weather through the micro-acidity and emerge as a stronger, more efficient and more resilient company.
Speaker 5: This concludes Mr. Chen's remarks.
Speaker 5: I will now provide a brief overview of our financial results for the third quarter of 2022 and the outlook for the fourth quarter of 2022.
Speaker 5: Total net revenue for the 3rd quarter were RMB 5.8 billion, up 11% from the same period of 2021.
Speaker 5: Our total net revenue breakdown by revenue stream was approximately 25% mobile games, 38% VAS, 23% advertising, and 14% from e-commerce and other businesses.
Speaker 5: Cost of revenues increased by 13% year-over-year to RMB 4.7 billion.
Speaker 5: Our gross profit in the third quarter was RMB 1.1 billion and our gross margin was 18.2%.
Speaker 5: Growth margin recovered by 3.2% points, sequentially attributable to the top-line growth.
Speaker 5: We expect to show continued sequential quarterly improvements in the first quarter and the coming year.
Speaker 5: Total operating expenses was RMB 2.9 billion. Practice compared with the same period of 2021. We cut sales and marketing expenses by 25% over year to RMB 1.2 billion.
Speaker 5: Sales marketing expenses as a percentage of total revenues was also down to 21%, compared with 31% in the same period last year.
Speaker 5: GNA expenses was RMB 543.4 million, 14% year-over-year.
Speaker 5: The increase was mainly primarily due to increased headcount in GNA personnel and higher rental expenses.
Speaker 5: R&D expenses was RMB 1.1 billion, representing a 43% increase over year.
Speaker 5: The increase was primarily due to increased high comp in R&D and increased share-based compensation expenses.
Speaker 5: Net loss and adjusted net loss was RMB 1.7 billion and RMB 1.8 billion for the third quarter of 2022, respectively.
Speaker 5: We successfully narrowed our adjusted net loss ratio by 10% points sequentially in Q3, and we expect the narrowing trend will continue in the fourth quarter and coming years.
Speaker 5: Turning to our capital allocation and liability management.
Speaker 5: We currently have three outstanding convertible bonds totaling 2.5 billion USD, among which the put-rise of 746 million USD is acceptable in June 2023.
Speaker 5: 429 million US dollar is accessible in April 2024.
Speaker 5: and 1.3 billion US dollar is accessible in December 2024.
Speaker 5: As of September 13, 2022, we had cash and cash equivalents, time deposits, and the short-term investments of RMB 23.9 billion or 3.4 billion US dollar.
Speaker 5: and we believe this level of liquidity is sufficient to repay the aggregate balance of all outstanding convertible bonds by their respective maturity.
Speaker 5: without considering any external funding resources available to us.
Speaker 5: Meanwhile, we are taking further actions to narrow our losses and reaching breakeven.
Speaker 5: We'll be prudent with our KPEX and we'll closely monitor our cash outflow.
Speaker 5: At the same time, these convertible bonds are currently traded at discounted price, and we will continue to evaluate the option to repurchase and retail them at reasonable price.
Speaker 5: As of October 31, 2022, we had repurchased and retailed a total principal amount of 329 million USD of these notes for a total cash consideration of 247 million USD generating 82 million USD net cash position.
Speaker 5: We will stay opportunistic when continuously evaluating options for the best use of our capital.
Speaker 5: Finally, our conversion from a secondary to a primary listing on the Hong Kong Stock Exchange become effective on October 3, 2022.
Speaker 5: Bilibili is now a dual primary listed company in Hong Kong and the United States.
Speaker 5: This conversation will further expand our investor base and provide more liquidity for our securities in the capital markets.
Speaker 5: With that in mind, we are currently projecting net revenues for the fourth quarter of 2022 between RMB 6.0 billion and RMB 6.2 billion.
Speaker 5: Thank you for your attention. We would now like to open the call to your questions. Operator, please go ahead.
Speaker 6: Thank you.
Speaker 3: As a reminder, if you would like to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. That's star 1 1 if you would like to ask a question. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English.
Speaker 3: Please limit your questions to one at a time. If you wish to have follow up questions, please rejoin the queue.
Speaker 3: Please stand by while we compile the Q&A roster.
Speaker 3: Thank you will now take our 1st question.
Speaker 3: Please stand by.
Speaker 3: Your first question is from the line of Daniel Chen from JP Morgan. Please go ahead.
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Speaker 7: So in the previous prepared remarks, management mentioned that the user growth focus will switch into a daily active use of DAU. So could you maybe elaborate more about our future user growth strategy? Thank you. All right fine.
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Speaker 4: Q&A. We raised the MA centered around MAU strategy back in 2019. And in the past, we have successfully expanded our MAU from $110 million to nowadays $330 million. And this is quite successful. And as people think about it, though, we haven'tJust talked about some of the problems as 12 years ago around MAU strategy back inbu small shareholder markets that we've been bewildering because we hadWHaughed about that had 15% net overall bank
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Speaker 4: Well, if we're able to grow three times in the past years, which supported the thesis that the Bilibili's business model, which is the community plus the content ecosystem works and is quite successful and shows our ability to maintain a high quality, highly secret community while deliver a very...
Speaker 8: up.
Speaker 4: Based on our 2022's work progress, we still see a lot of room for our MAU growth. Even in 3EQ, we deliver 25% young year growth. And if we carry on the current strategy, we believe we can still achieve the 400 million MAU target by next year.
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Speaker 4: Starting from 2022, we also put a lot of work in terms of the DAU growth because we do believe that DAU compared to MMU can present the quality of the user growth as well as the sustainability of the user growth. In addition, it also directly links to the commercial perspective of our community.
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Speaker 4: Like I said...
Speaker 4: the growth is not the purpose. It's just a way to achieve our goal of increase the quality of our user. And in the end of the day, the
Speaker 4: Growth over will directly link to the growth of you and that's why starting from this year we are putting more emphasize and resources increase our and if you look at our ratio, it has already improved from 1626% in 2021 to 27% in 2022.
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Speaker 5: Thank you for your attention.
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Speaker 4: As you may all aware, that we are facing multiple challenges from the macro environment and putting profitability at first is one of the most important tasks for the management. The reason why we're putting more emphasis to DAU instead of MEU, we believe from one aspect.
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Speaker 4: We are very confident to the DAU growth next year and this will be more sustainable for the whole company as well as be very beneficial to our commercialization efforts. And as for the outlooks for next year, we hope to increase our DAU to MAU ratio to 30%.
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Speaker 4: Starting from 2022, we have already taken actions to control our salsa marketing expense. In Q3 this year, our salsa marketing expense already declined 25% year over year. As we're shifting our focus from MAU to DAU, we expect we can further reduce our salsa marketing expense and the magnitude of our salsa marketing expense.
Speaker 4: the decline will be even bigger in 2023 compared to 2022.
Speaker 4: I'll put it next question, please. Thank you.
Speaker 3: Thank you. We'll now take our next question.
Speaker 3: Please stand by.
Speaker 3: This is from the line of police saying from Bank of America, please go ahead.
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Speaker 4: We raised the target of reach break even by end of 2024, and we'll stick to that mission and goal. And as we move through 2022, obviously there's been multiple challenges across the macro environment.
Speaker 4: to reduce loss and putting profitability at first is the priority for the company. And this is something I personally look after in taking charge.
Speaker 5: Thank you very much.
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Speaker 4: We have already taken actions to reduce our cost and expense. And so far, the unit cost for our sovereign bandwidth continue to decline. And as I mentioned earlier, source marketing continue to decline year on year for three consecutive quarters. And we have already taken action to reduce our cost and expense.
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Speaker 4: move forward will take more effort to reduce our SELTA marketing expense as well as G&A and R&D expenses.
Speaker 5: So, I hope you enjoyed this video. If you have any questions, please leave them in the comments. And if you have any questions, please leave them in the comments. Please leave them in the comments.
Speaker 4: In terms of the efficiency improvement, I intend to reduce investment on the non-core business and allocating and centralize our resources in areas such as improving our commercialization efficiencies. For more information about Wyckley Sawans domain, refer to c
Speaker 5: I hope you will enjoy this video. Please like and subscribe to my channel. See you soon.
Speaker 4: At the same time, we'll also take actions to optimize our organizational structure to reduce the fat and increase the lean. And we expect this adjustment will be completed by end of this year. And we'll start it to show on P&L starting from first quarter next year.
Speaker 5: I will take the question with regard to the growth margin and expense trend. The company takes on more actions to reduce cost and the prioritized probability. We expect our growth margin will gradually increase going forward. Sales marketing expensing 2022 has already declined year over year, as mentioned by our Chairman and will continue to decline next year.
Speaker 5: and we spend R&D expenses which will peak in Q4 this year and start to decline next year.
Speaker 5: In 2023 and the future period, we expect overall operating expenses in absolute dollar terms will decline year over year and net loss will further narrow down until we reach our breakeven target. At the same time, we will pay very close attention to our cash flow and tightly control KPEX investment as we narrow our losses.
Speaker 5: We aim to keep our cash balance at a healthy level.
Speaker 4: Thank you operator we can take the next question. Thank you.
Speaker 3: Please stand by.
Speaker 3: Next question is from a line of seeking at sang from CICC. Please go ahead
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Speaker 4: business and how should we think about revenue growth in the first quarter and next year. In addition, during the W11, we noticed that Bilibili has advertising products related to content e-commerce. Could management share more details about it? And also want to know, is Bilibili considering launching pre-roll ads at the present? Thank you.
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Speaker 4: Despite we can macro environment, the ad revenue in third quarter reached 1.35 billion and increased 16% year over year. We consider this is a job well done and especially the ad revenue from performance related format.
Speaker 4: increased by over 20% year over year. And we are continue to take market share in the ad market.
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Speaker 4: In 2023, we plan to continue to enhance our integrated marketing capability and to build a friendly and welcoming environment for advertisers.
Speaker 4: And we will continue to help advertisers to effectively reach our young generation through billability's multiple products and multiple using scenarios, and help them to build their brand equity.
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Speaker 4: And we intend to further combine our content ecosystem with our ad business, particularly in our leading verticals, increase our ad inventory and accelerate ad momentum in the consumption and transaction scenarios.
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Speaker 4: For example, we are already among the top five market players in verticals like game and 3C and digital products. Another example would be for FMCG apps, which are part of young generation necessity, continue to grow such as food and beverage, skincare and cosmetics.
Speaker 4: And as we move forward, we expect verticals like automotive, baby and maternity, and home decor and appliances will have great potentials, especially as the young generation continue to grow with availability as they enter different life stages. And in Q3 actually the automotive sector grew over 80% year on year.
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Speaker 4: You mentioned about the content e-commerce.
Speaker 4: I would rather define the content e-commerce and billy-billy ecosystem as a consumption and transaction scenario. First of all, it's an infrastructure for us and it is also one of the very important scenarios for commercialization. In 2023, we plan to further connect the transaction scenario with the billy-billy community.
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Speaker 4: For example, in the past two quarters together with Taobao, Zimo, Jingdong, Pinduoduo and other brand advertisers, we are already starting to explore the seeding consumption and transaction model including video and live broadcasting based e-commerce as well as traffic.
Speaker 4: acquisition within the billability community. With that, we hope to explore the different commercial values of billability, unique consumption, and transaction scenario.
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Speaker 4: revenue, among which the performance-based formats of advertising revenue grow over 80%. And in the future, we're looking to further expand and be very open about the transaction and consumption scenario. We welcome more of the brand advertiser to join us to further explore the commercial back-end.
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Speaker 4: some people might have overly optimistic about the pre-roll potential within billy-billy. And most of the billy-billy content are about two to five minutes long. If we add pre-roll to all of them, it will only generate very limited income, but be extremely disruptive to user experience.
Speaker 4: We believe it will bring more harm than the good, which we will be very conscious to try out.
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Speaker 4: I'll give you some examples of how are we exploring the app formats that's more adaptive to Bilibili's ecosystem. For example, we can explore within the video player frame such as native apps, bullet chat ads and other innovative formats within the player frame.
Speaker 4: or we can explore the model that combines performance-based ads with
Speaker 4: both app download conversion module and CPS, we call it a game partner model. And another example would be the story mode ad, which we believe is a very good format to carry on the performance-based app. And as the story mode traffic continue to grow, it will open more ad inventory to us.
Speaker 4: Lastly, it would be the content e-commerce plus user acquisition within the visibility model will continue to refine and optimize our outgoals to improve those performance-based ad efficiency. All of the above mentioned formats of advertising we believe will generate higher income as well as it's more sustainable.
Speaker 4: will continue to outperform the overall industry and will continue to take on more market share. Thank you. Operator, your next question, please. Thank you. We'll now take our next question.
Speaker 6: Please stand by.
Speaker 6: Please stand by.
Speaker 3: This is from the line of Lincoln Kong from Goldman Sachs. Please go ahead.
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Speaker 5: So my question is about the gaming business. Given that Mr. Chang-Rui, you have personally taken control of the game business, what's our strategy and target and change poster you're taking over?
Speaker 5: After the resumption of the game bank, how is the company looking for our overall gaming business growth outlook, especially our self-developed games, as well as the overseas gaming strategy and progress? Thank you.
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Speaker 4: I raised the strategy of putting video and game as Billie Billie's core business back in 2019. As a matter of fact, Billie Billie is starting to explore game business from very early days. Actually, Billie Billie is the platform that has the most condensed and concentrated video game experience.
Speaker 4: gamer in China, at the same time we have lots of content offerings in terms of live broadcasting and video on our platform. At the same time, the areas that we invested in the original animation and comics have great synergies with our game business. So naturally it's
Speaker 4: It's just a natural extension and natural core for the ability to put games at our core.
Speaker 11: Thank you for listening.
Speaker 11: We are also not under the executive of China. Today, they are but show that we are O from local government are opinion. Our view about our view was particularly an electronic about application investigation process we do the ethical Thank you.
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Speaker 4: In the past two years, the game business didn't perform as well as we planned, which I believe is many due to the slower than expected self-developed game progress. The reason is that we were exploring in multiple directions by multiple teams at once, but end up spreading too thin and only just to dabble on it.
Speaker 11: Thank you for your attention.
Speaker 11: Her coach is some bills from beayht sellb conosu.
Speaker 4: As I personally take on the game business, it doesn't mean we are making any change to our original strategy. As a matter of fact, we will carry on more diligently to that strategy, which is develop a high quality game in-house.
Speaker 4: and distribute globally and putting game business at our core.
Speaker 11: As you can see, the legend she´s been making in the first place is not quite yet released.
Speaker 11: We will continue through one of the sessions yesterday.
Speaker 4: I intend to focus on only one or two directions, focusing our best resource and our energy on doing the least but the best towards the highest industry standard.
Speaker 11: I hope you enjoyed this video. Please subscribe to my channel.
Speaker 4: At the same time, I will strengthen the life cycle management of our self-development projects to increase the investment in projects that meet expectations and quickly iterate out projects that do not meet the expectations.
Speaker 11: he knows of the well he would also royalty royalty royalty royalty year would your children asPay cooler conditioned computer computer Erdogan Putin…) Marxist I'll see you in the next video.
Speaker 11: All the security And trade Special Enahar Mastering US master professor credentials One week During the official event acquiescing Thank you.
Speaker 4: Moving forward, my requirement for the game business will be to be very, very down to earth. And, umm...
Speaker 4: do our best to produce the best product and try our best to increase, to increase, to enhance the business. Because we have the perfect environment.
Speaker 4: in-game content, I'm still very confident, whether it's self-devolved games or licensing games, we can deliver sustainable growth in the sector.
Speaker 4: Operator, next question please. Thank you.
Speaker 3: Thank you. We'll now take our next question.
Speaker 6: Please stand by.
Speaker 3: This is from the line of Yuan Zhang from China Renaissance. Please go ahead.
Speaker 5: So, the integration between the live broadcasting and the video streaming has been on for a Well, that's all for now. Thanks for watching.
Speaker 5: Can you show more color of the strategy and discuss our expectations about life streaming in these? Thank you.
Speaker 11: We have set up ourRight Pew MARCH I Au Maoli LOI ESA. one would use them.
Speaker 4: We think the live broadcasting business has met our expectations this year. The first three quarters this year, our live broadcasting revenue grew by 30% year on year and our live broadcasting growth margin also starting to recover this year.
Speaker 11: Well, put it this way, right.
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Speaker 4: As I mentioned in the past we have always believed live broadcasting is a capability for the platform. It's a natural extension of the video format of content and our strategy has always been...
Speaker 11: combine the live broadcasting ecosystem with our video ecosystem to generate fast energies among the two.
Speaker 11: black hole Off-pert around your door to the border Che and then have only the 70 that happens itself feeling too and be value- stresses. I think that Oh, you've got positive all
Speaker 4: From the supply of content side, we have continuously explored within our ecosystem to convert our content creators to a host and convert our host to content creators. In Q3, content creators slash hosts, the number of those content creators slash hosts has increased.
Speaker 11: Yes. I hope you enjoyed the video. If you have any questions, please leave them in the comments. Also, please like and subscribe to the channel. We will also be making more videos about the MPU. Thank you for watching. Please like and subscribe. See you soon.
Speaker 4: We are also exploring from the demand side to discover the users that they might be both interested in the same vertical content, whether it's in the format of video or it's in the format of live broadcasting. And in the third quarter, we are looking
Speaker 11: we've seen the DAU penetration of live broadcasting continue to increase and the NPU for live broadcasting also recorded a 79% in-year growth. This is also very, very impressive growth.
Speaker 11: is not only possible. We believeörn in finding out the changing culture
Speaker 4: Last quarter we have combined the operation of live broadcasting with the PUGV and from an organizational perspective, it's the same team that's looking over the content creators' operation as well as the live broadcasting host operation. It's also the same team that's...
Speaker 4: paying attention to which user is watching certain content category and what kind of library archives and content he or she might be interested in. We believe this change are really lining up and aligning our goals of our operation target at the same time to increase our overall organization position. This is the previous animation.
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Speaker 11: And we're combining of the operation of board the same vertical in terms of the live broadcasting and PUGV. And for example, in terms of the beat up content categories.
Speaker 4: Now we are opening up the video materials or video inventory to both...
Speaker 4: vtubers as well as the virtual life of virtual content creators this has significantly increased the live broadcasting hosts frequency of opening opening up their live broadcasting program and Increased our overall content supply.
Speaker 11: Another example would be the knowledge sector. In the past, we might think that for the knowledge sector content creator, it's difficult for them to monetize through live broadcasting.
Speaker 4: However, we've discussed in the law area or in the Relationship areas, it's very suitable for the live broadcasting host to connect directly with the participants and do a Q&A session and actually we have We have seen one live broadcasting host.
Speaker 11: to gain her 1 million follower milestone just through the LiveRock housing services. So this will be another example after the decision of the two operations, we can explore new opportunities.
Speaker 5: The eari thenanion to roam a dvoo show: bhome and modtokyo grou sum.
Speaker 4: As such, I'm very confident as the integration further penetrate within the live broadcast NPGV, the live broadcasting revenue as well as its growth margin will continue to increase in 2023.
Speaker 3: Back to you operator, I think that's about time for the Q&A session today. Thank you. That does conclude the question and answer session. So I would like to turn the conference back over to Juliet Yang for any additional closing remarks.
Speaker 4: Well, thank you once again for joining us today. If you have further questions, please contact me, Julie Yang, Bilibili Executive IR Director or JBG Ambassador Relations. Our contact information for IR in both China and the U.S. can be found at today's press release. Have a great day. Bye bye.
Speaker 3: Thank you, this does conclude the conference for today. Thank you for participating and you may now disconnect.
Speaker 2: The conference will begin shortly. To raise your hand during Q&A, you can dial star 1-1.
Speaker 1: I I.
Speaker 1: you
Speaker 12: moderator.
Speaker 4: During this call, we'll discuss Business Outlook and make forward-looking statements.
Speaker 4: These comments are based on our predictions and expectations as of today. Actual events or results could differ materially from those mentioned in today's news release and in this discussion due to a number of risks and uncertainties, including those mentioned in our most recent filing with the SEC and Hong Kong stock exchange.
Speaker 4: The non-GAAP financial measures we provide are for comparison purpose only. Definition of these measures and a reconciliation table are available in the news release we issued earlier today.
Speaker 4: As a reminder, this conference is being recorded. In addition, an investor presentation and a webcast replay of this conference call will be available on the IR website at IR.billabilly.com.
Speaker 4: Joining us today from Billabilly Center Management are Mr. Ray Chen, Chairman of the Board and Chief Executive Officer, Ms. Kali Lee, Vice Chairwoman of the Board and Chief Operating Officer, and Mr. Tseng Fan, Chief Financial Officer.
Speaker 4: And I will now turn the call over to Mr. Fan, who will read the prepared remarks on behalf of Mr. Chen.
Speaker 5: Thank you, Juliette. And thank you everyone for participating in our third quarter 2022 results conference call.
Speaker 5: I'm pleased to deliver today's opening remarks on behalf of Mr. Chen, our community, which is the foundation of our business and key to our long-term success.
Speaker 5: continued to expand. In the third quarter, DAUs reached more than 90 million and they may use nearly 333 million, both up 25% year-over-year.
Speaker 5: Average daily time spent per user was 96 minutes in the third quarter.
Speaker 5: after 8 minutes from the same period last year.
Speaker 5: With that, the total time spent on Bilibili grew by 37% year over year. Having said that, we still face micro-headwinds and uncertainties that long over the industry.
Speaker 5: To cope with the challenging environment, we have reprioritized our goals and promoted to focus on two key tasks that will help us turn the corner. First, our users. As our MAUs have reached a sizable base of nearly 333 million, we think it is time to shift our primary focus to DAU growth. DAUs are the most important areas
Speaker 5: not only represent the quality and the sustainability of our community, but also directly linked to our inferential power as a platform.
Speaker 5: as well as various commercial prospects.
Speaker 5: Particularly in terms of revenue generation for our tiling and vastness. With our improving product offerings and refined algorithms, we can continue to grow our DAU base and improve our DAU to MAU ratio with reduced sales and marketing spend.
Speaker 5: Second, we are committed to improving our financials by expanding our growth margin and narrowing our losses. After a challenging first half of the year, revenues in the third quarter grow to RMB 5.8 billion, up 18% quarter over quarter and 11% year over year. In the third quarter, we continue to take various actions to tighten our spending.
Speaker 5: Growth margin improved to 18% up 3% points sequentially. Sales and marketing expenses as a percentage of total revenues were 21%. Down 3% points sequentially.
Speaker 5: Our non-gamut net loss ratio also narrowed by 10 percentage points compared with the prior quarter.
Speaker 5: Looking ahead, we will implement a number of additional cost control measures and further rationalize our marketing expenses at head-count planning.
Speaker 5: Specifically, we are still in line our investment in R&D and cutting down on projects with lower chance of success and being extra mindful when exploring new opportunities.
Speaker 5: At the same time, we are centralizing our resources in areas related to improving commercialization efficiency and user experience.
Speaker 5: These adjustments will be completed by the end of this year. Accordingly, we expect our sales, marketing and R&D expenses to peak this year and start to decline in 2023, with net loss narrowing further accordingly.
Speaker 5: With that, I'd like to provide a brief update on our co-pillars of content, community, and commercialisation.
Speaker 5: Starting with content. Over the years, as young generations on Bilibili grow up and enter into new stages of life, their interest is involved, driving Quater's passions as well as the expansion of our content categories.
Speaker 5: So on top of our traditional strong content verticals, we have seen emerging categories such as automobile, home decoration, an internal design, and a baby M maternity.
Speaker 5: In the third quarter, 3.8 million monthly active content creators on Bilibili readily accommodated these various needs, creating near 60 million new videos on monthly basis.
Speaker 5: 40% and 54% year-over-year, respectively. The expanding content library drives the overall traffic growth on our platform.
Speaker 5: Total video views grow by 64% year over year, driven by both PUGV and story mode content, which grow by 34% and over 470% year over year, respectively.
Speaker 5: Particularly, with improving content distribution capabilities of Story Mode, content creators can build their fan base more easily.
Speaker 5: sharing their content with other contract spreads on Bilibili. The virus monetization process we have cultivated for accounting creators continues to offer more creators more opportunities to make money while doing things they love. In the third quarter, over 1.2 million content creators earn their income through multiple channels on Bilibili.
Speaker 5: of 74% year-over-year. Looking at our community, we consistently deepen our user engagement in our community with our featured and diverse content. As I mentioned earlier, the average daily user time spent reaches a recall high of 96 minutes, about 8 minutes from the same period last year.
Speaker 5: Our monthly interactions also increased 41% year-over-year to 14.4 billion.
Speaker 5: Furthermore, the number of official members on our site was up by 37% year-over-year to 183 million.
Speaker 5: maintaining a stable 12-month retention rate above 80%.
Speaker 5: Now let's look at our commercialization and prospects for near and long-term monetization.
Speaker 5: First, our vast business.
Speaker 5: Our vast revenues were the RMB 2.2 billion.
Speaker 5: up 16% year-over-year in the third quarter. By further integrating live broadcasting with our PUGV ecosystem, we maintain our unique platform advantage.
Speaker 5: We had 67% more live broadcasting hosts in the third quarter this year than for the same period last year.
Speaker 5: The number of live broadcasting paying users increased by 79% year-over-year in the third quarter.
Speaker 5: The number of premium memberships for the third quarter grow 12% year-over-year to 20.4 million.
Speaker 5: In December , we plan to launch our self-produced Chinese anime title, The Three-Body Problem.
Speaker 5: This highly anticipated title is expected to attract a wide range of sci-fi lovers to visitors from around the world to a people-to-people Rapid-
Speaker 5: Looking at our advertising, despite softness in microenvironment, net revenues were RMB1.4 billion, an increase of 16% year-over-year.
Speaker 5: We further strengthen our integrated marketing campaign offerings by combining diverse ad products and conversion modules across different video viewing scenarios.
Speaker 5: Story Mode ads, as part of ad offerings, continue to capture more performance-based ad dollars in the third quarter.
Speaker 5: Our top advertising verticals in the third quarter were games, digital products and home option lines, skin care and cosmetics.
Speaker 5: On top of the Tiding Verticals in the third quarter, Work Games, Digital Products and Home Apparel line, Skincare and Cosmetics, Automotive,
Speaker 5: and food and privilege. And for games, our game RAM use grows 6% year-over-year to RMB 1.5 billion, largely driven by the new titles we launched in the domestic and overseas market in the third quarter.
Speaker 5: Developing house, distribute globally remains our co-game strategy.
Speaker 5: which has started to bear fruit. Revenue generated from self-driven games contribute 9% of our total game revenue in the third quarter.
Speaker 5: Looking at our publics, we have two games approved for domestic relief this year and earlier next year.
Speaker 5: including one self-development title. Five titles are slated to launch in the overseas markets early next year. Facing the market's micro-concentrates, our primary goal is clear improving our gross profit margin and narrowing our net loss.
Speaker 5: By expediting our commercialization, we believe our top line can catch up with our community scare.
Speaker 5: While we remain committed to our goal of reaching non-GAAP operating breakeven by 2024, we will also actively manage our cash position and liabilities.
Speaker 5: We believe we can wither through the micro-acities and emerge as a stronger, more efficient and more resilient company. This concludes Mr. Chen's remarks. I will now provide a brief overview of our financial results for the third quarter of 2022 and the outlook for the fourth quarter of 2022. Thank you for watching.
Speaker 5: 13% year-over-year to RMB 4.7 billion. Our gross profit in the third quarter was RMB 1.1 billion, and our gross margin was 18.2%.
Speaker 5: Growth margins recovered by 3.2% points sequentially attributable to the top-line growth. We expect to show continued sequential quarterly improvements in the first quarter and the coming year.
Speaker 5: Total operating expenses was RMB 2.9 billion. Practice compared with the same period of 2021. We cut sales and marketing expenses by 25% over year to RMB 1.2 billion.
Speaker 5: Sales market expenses as a percentage of total revenues was also down to 21%, compared with the 31% in the same period last year.
Speaker 5: GNA expenses was RMB 543.4 million, 14% year-over-year.
Speaker 5: The increase was mainly primarily due to increased headcount in GNA personnel and higher rental expenses. R&D expenses was R&B 1.1 billion, representing a 43% increase year-over-year. The increase was primarily due to increased headcount in R&D and increased share-based compilation expenses.
Speaker 5: Net loss and adjusted net loss was RMB 1.7 billion and RMB 1.8 billion for the third quarter of 2022, respectively.
Speaker 5: We successfully narrowed our adjusted net loss ratio by 10% points sequentially in Q3, and we expect the narrowing trend will continue in the fourth quarter and coming years.
Speaker 5: Turning to our capital allocation and liability management.
Speaker 5: We currently have three outstanding convertible bonds totaling 2.5 billion USD, among which the put-rise of 746 million USD is acceptable in June 2023.
Speaker 5: 429 million US dollar is accessible in April 2024.
Speaker 5: and 1.3 billion US dollar is accessible in December 2024.
Speaker 5: As of September 13, 2022, we had cash and cash equivalents, time deposits, and short-term investments of RMB 23.9 billion or US$3.4 billion.
Speaker 5: and we believe this level of liquidity is sufficient to repay the aggregate balance of all outstanding convertible bonds by their respective maturity.
Speaker 5: without considering any external funding resources available to us. Meanwhile, we are taking further actions to narrow our losses and the reaching breakeven.
Speaker 5: We'll be prudent with our KPEX and we'll closely monitor our cash outflow.
Speaker 5: At the same time, these convertible bonds are currently traded at discounted price, and we will continue to evaluate the option to repurchase and retail them at reasonable price. As of October 31, 2022, we had repurchased and retailed a total principal amount of 329 million USD of these notes.
Speaker 5: for a total cash consideration of $247 million generating $82 million net cash position.
Speaker 5: We will stay opportunistic when continuously evaluating options for the best use of our capital.
Speaker 5: Finally, our conversion from secondary to a primary listing on the Hong Kong Stock Exchange become effective on October 3, 2022.
Speaker 5: Bilibili is now a dual primary listed company in Hong Kong and the United States.
Speaker 5: This conversation will further expand our investor base and provide more liquidity for our securities in the capital markets.
Speaker 5: With that in mind, we are currently projecting net revenues for the fourth quarter of 2022 So we between RMB 6.0 billion and RMB 6.2 billion.
Speaker 5: Thank you for your attention. We would now like to open the call to your questions. Operator, please go ahead.
Speaker 5: Thank you for your attention. We would now like to open the call to your questions. Operator, please go ahead. Thank you.
Speaker 3: As a reminder, if you would like to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. That's star 1 1 if you would like to ask a question. For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. Please limit your questions to 1 at a time. If you wish to have follow up questions, please.
Speaker 7: I will translate myself. So in the previous prepared remarks, management mentioned that the use of growth focus will...
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Speaker 4: And we raised the MA centered around strategy back in 2019 and in the past we have successfully expanded our from 110Million to nowadays 330Million. And this is quite successful and showed our. Excellent execution in the past few years.
Speaker 5: I think that the Chinese government and the MOU have a very strong relationship with China. I think that China has a very strong relationship with China. Thank you.
Speaker 4: Well, if we're able to grow three times in the past years, which supported the thesis that the Bilibili's business model, which is the community plus the content ecosystem works and is quite successful and shows our ability to maintain a high quality, highly sophisticated communities...
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Speaker 4: Based on our 2022's work progress, we still see a lot of room for our MAU growth. Even in 3EQ, we deliver 25% in-year growth. If we carry on the current strategy, we believe we can still achieve the 400 million MAU target by next year.
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Speaker 4: We also put a lot of work in terms of the DAU growth, because we do believe that DAU compared to MMU can present the quality of the user growth, as well as the sustainability of the user growth. In addition, it also directly links to the commercial perspective of our community.
Speaker 5: The second big problem is from the feelings of future generations. We have then a form of robotization that can makeBoyatari And the hatched idea could due to the Wond token being a strong Thank you.
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Speaker 4: Like I said, the growth is not the purpose. It's just a way to achieve our goal of increase the quality of our user. And in the end of the day, the growth over MAU will directly link to the growth of DAU. And that's why starting from this year, we are putting more emphasize and resources to increase our DAU.
Speaker 4: And if you look at our BAU to MAU ratio, it has already improved from 26% in 2021 to 27% in 2022.
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Speaker 5: Thank you for your attention.
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Speaker 4: Putting profitability at first is one of the most important tasks for the management. The reason why we're putting more emphasis to DAU instead of MEU, we believe from one aspect it can help us to increase the monetization efficiency, and help us to grow our revenue at the same time to reduce our self-marketing expenses.
Speaker 5: and to achieve breaking the event as soon as possible.
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Speaker 4: We are very confident to the DAU growth next year, and this will be more sustainable for the whole company, as well as be very beneficial to our commercialization efforts. And as for the outlooks for next year, we hope to increase our DAU to MAU ratio to 30%.
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Speaker 4: Starting from 2022, we have already taken actions to control our salsa marketing expense. In Q3 this year, our salsa marketing expense already declined 25% year over year. As we're shifting our focus from MAU to DAU, we expect we can further reduce our salsa marketing expense and the magnitude of our salsa marketing expense.
Speaker 4: the decline will be even bigger in 2023 compared to 2022. Thank you.
Speaker 3: Please stand by. This is from the line of Lei Zhang from Bank of America. Please go ahead.
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Speaker 5: and ingenious though And that concludes today's discussion. Please shareholders of Wuhan University College of Business and Machine Learning Thank you for watching.
Speaker 4: We raised the target of Reach, Break, Even, by the end of 2024, and we'll stick to that mission and goal. And as we move through 2022, obviously there's been multiple challenges across the macro environment.
to reduce loss and putting profitability at first is the priority for the company. And this is something I personally look after in taking charge. Whenes sufficiently to Maslow but difficult
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We have already taken actions to reduce our cost and expense. And so far, the unit cost for our sovereign bandwidth continue to decline. And as I mentioned earlier, sales and marketing continue to decline year on year for three consecutive quarters. And so far, the unit cost for our sovereign bandwidth
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move forward will take more effort to reduce our SELTA marketing expense as well as G&A and R&D expenses.
In terms of the efficiency improvement, I intend to reduce investment on the non-core business and allocating and centralize our resources.
in areas such as improving our commercialization efficiencies.
At the same time, we'll also take actions to optimize our organizational structure to reduce the fat and increase the lean. And we expect this adjustment will be completed by end of this year. And we'll start it to show on P&L starting from first quarter next year.
I will take the question with regard to the growth margin and expense trend. The company takes on more actions to reduce cost and the prioritized probability. We expect our growth margin will gradually increase going forward. Sales marketing expense in 2022 has already declined year over year, as mentioned by our Chairman and will continue to decline next year.
And we expect R&D expenses which will peak in Q4 this year and start to decline next year. In 2023 and the future period, we expect overall operating expenses in absolute dollar terms will decline year over year and net loss will further narrow down until we reach our breakeven target. At the same time, we will pay very close attention to our cash flow.
and tightly control KPEX and investment as we narrow our losses. We aim to keep our cash balance at a healthy level.
Thank you operator we can take the next question. Thank you.
Please stand by.
Next question is from a line of Xeking Zhang from CICC please go ahead.
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In addition, during the W11, we noticed that Bilibili has advertising products related to content e-commerce. Could management share more details about it? And also want to know, is Bilibili considering launching pre-roll ads at the present? Thank you.
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so why are we marines? Thank you.
Despite we can macro environment, the ad revenue in third quarter reached $1.35 billion and increased 16% year over year. We consider this is a job well done. And especially the ad revenue from performance-related format increased by over 20% year over year. We are continue to take.
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So, in our past and now, the environment is bigger and higher, that is why we set up into a chat. Thank you.
In 2023, we plan to continue to enhance our integrated marketing capability and to build a friendly and welcoming environment for advertisers.
And we will continue to help advertisers to effectively reach our young generation through Billi Billi's multiple products and multiples using scenarios and help them to build their brand equity.
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And we intend to further combine our content ecosystem with our ad business, particularly in our leading verticals, increase our ad inventory and accelerate ad momentum in the consumption and transaction scenarios. Thank you.
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For example, we are already among the top five market players in verticals like game and 3C and digital products. Another example would be for FMCG apps, which are part of young generation necessity continue to grow, such as food and beverage, skincare and cosmetics.
And as we move forward, we expect verticals like automotive, baby and maternity, and home decor and appliances will have great potentials, especially as the young generation continue to grow with Bilibili as they enter different life stages. And in Q3, actually, the automotive sector grew over 80% young year within Bilibili.
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You mentioned about the content e-commerce. You mentioned about the content e-commerce.
I would rather define the content e-commerce and billy billy ecosystem as a consumption and transaction scenario. First of all, it's an infrastructure for us and it is also one of the very important scenarios for commercialization. In 2023, we plan to further connect the transaction scenario with the billy billy community andPay
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For example, in the past two quarters, together with Taobao, Zimou, Jingdong, Pinduoduo and other brand advertisers, we are already starting to explore the seeding, consumption and transaction model including video and live broadcasting based e-commerce as well as traffic acquisition within the Bilibili community.
With that, we hope to explore the different commercial values of billy-billy unique consumption and transaction scenario. Thank you for your attention.
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more of the brand advertisers to join us to further explore the commercial value within our unique ecosystem.
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the pre-roll potential within Bilibili. And most of the Bilibili content are about two to five minutes long. If we add pre-roll to all of them, it will only generate very limited income, but be extremely disruptive to user experience. We believe it will bring more harm than the good, which we will be very conscious to try out.
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I'll give you some examples of how are we exploring the app formats that's more adaptive to Billy Billy's ecosystem. For example, we can explore within the video player frame such as native apps, bullet chat apps and other innovative formats within the player frame or we can explore the player
the model that combines performance-based ads with both app download conversion modules and CPS. We call it a game partner model. And another example would be the story mode ads, which we believe is a very good format to carry on the performance-based ads. And as the story mode topic continue to grow.
will open more ad inventory to us. Lastly, it would be the content e-commerce plus user acquisition within the billability model will continue to refine and optimize our outgo to improve those performance-based ad efficiency. All of above mentioned formats of advertising.
we believe will generate higher income as well as it's more sustainable to our overall community. We're still very, very confident that you're going to be able to generate higher income
Please stand by. This is from the line of Lincoln Kong from Goldman Sachs. Please go ahead.
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So my question is about the gaming business. Given that, Mr. Cheng, you have personally taken control of the game business, what's our strategy and target and change poster on your tech mover and
After the resumption of the game bank house, the company are looking for our overall gaming business growth outlook, especially our self-delapsed games, as well as the overseas gaming service program. Thank you.
the resumption of the game bank house the company are looking for for our overall gaming business growth outlook, especially our self-delapsed games as well as the overseas gaming strategy and progress. Thank you.
I think that the international community is very much committed to the development of the digital world. We are very much committed to the development of the digital world. We are very much committed to the development of the digital world. Thank you.
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I raised the strategy of putting video and game as Buildability's core business back in 2019.
As a matter of fact, Bilibili is starting to explore game business from very early days. Actually, Bilibili is the platform that has the most condensed and concentrated gamer in China. At the same time, we have lots of content offerings in terms of live broadcasting and video on our platform. At the same time, the areas that we invested in the original animation and
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In the past two years, the game business just didn't perform as well as we planned, which I believe is many due to the slower than expected self-developed game progress. The reason is that we were exploring in multiple directions by multiple teams at once, but end up spreading too thin and only just...
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and the game industry. I'm curious, how do you see the relationship between the two, and how do you see the relationship between the two? As I personally take on the game business, it doesn't mean we're making any change to our original strategy. As a matter of fact, we will carry on more diligently to that strategy, which is develop high quality game in-house.
and distribute globally and putting game business at our core.
Please see the complete disclaimer at the end of the video.
I intend to focus on only one or two directions, focusing our best resource and our energy on doing the least but the best towards the highest industry standard. An exercise in growing beacons is the one we tune for.
At the same time, I will strengthen the lifecycle management of our self-development projects to increase the investment in projects that meet expectations and quickly iterate out projects that do not meet the expectations.
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Moving forward, my requirement for the game business will be to be very, very down to earth and do our best to produce the best product and try our best to increase, to increase, to enhance the business.
Because we have the perfect environment in game content, I'm still very confident, whether it's self-devolved games or licensing games, we can deliver sustainable growth in the sector. Operator, next question please. Thank you.
Thank you. We'll now take our next question.
We'll now take our next question. Please stand by.
This is from the line up Yuan Zhang from China Renaissance. Please go ahead.
So, my question regarding live broadcasting, so the integration between the live broadcasting and the media streaming has been on for a while. Have you seen more of the strategy and discussed our expectations about live streaming?
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We think the live broadcasting business has met our expectations this year. The first three quarters this year are live broadcasting revenue grow by 30% young year and our growth live broadcasting growth margin also starting to recover this year. managed mobile
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As I mentioned in the past we have always believed live broadcasting is a capability for the platform. It's a natural extension of the video format of content and our strategy has always been combine the live broadcasting ecosystem with our video ecosystem to generate
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Thank you very much in Chinese. We hope today, and in other countries where the government order will continue to cooperate with the people of the U.S. and for their Navi- stripes and with their remote and private w that would replace the
We are also exploring from the demand side to find, to discover the users that they might be both interested in the same vertical content whether it's in a format of video or it's in the format of live broadcasting. And in the third quarter we've seen the DAU penetration of live broadcasting continue to increase and the NPU for live broadcasting also recorded a 79% year growth. This is also very very impressive growth.
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Last quarter, we have combined the operation of live broadcasting with the PUGV. And from an organizational perspective, it's the same team that's looking over the content creators operation as well as the live broadcasting host operation. And it's also the same team that's paying attention to which user is watching certain content category and what kind of...
And we're combining of the operation of the same vertical in terms of light broadcasting.
live broadcasting hosts frequency of opening up their live broadcasting program and increased our overall content supply.
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and actually we have we have seen one live broadcasting host to gain their gain her 1 million follower milestone just through the live broadcasting services so this is will be another example after a decision of the two operations we can explore new opportunities
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As such, I'm very confident as the integration further penetrate within the live broadcast NPGV, the live broadcasting revenue as well as its growth margin will continue to increase in 2023.
Back to you operator, I think that's about time for the Q&A session today. Thank you. That does conclude the question and answer session. So I would like to turn the conference back over to Juliet Yang for any additional or closing remarks.
Well, thank you once again for joining us today. If you have further questions, please contact me, Julie Yang, the Executive IR Director or JBG Ambassador Relations. Our contact information for IR in both China and the US can be found at today's press release. Have a great day. Bye-bye. Thank you. This does conclude the conference for today. Thank you for participating and you may now disconnect.
in the live broadcast and TGV, the live broadcasting revenue as well as its growth margin will continue to increase in 2023. Back to you operator, I think that's about time for the Q&A session today. Thank you. That does conclude the question and answer session. So I would like to turn the conference back over to Juliet Yang for any additional or closing remarks. Well, thank you once again for joining us today. If you have further questions, please contact me, Juliet Yang, the Executive IR Director or TGV Ambassador Relations. Our contact information for IR in both China and the US can be found out today's press release. Have a great day. Bye bye. Thank you. This does conclude the conference for today. Thank you for participating and you may now disconnect. Thank you. Bye bye. Bye bye. Bye bye.