Q1 2023 Bilibili Inc. Earnings Call
Good day and welcome to the Billy Billy that's what's that 'twenty two 'twenty three financial results and business update conference call. Today's conference is being recorded.
This time I would like to turn the conference over to Juliet Yang Executive Director of Investor Relations. Please go ahead.
Thank you operator.
During this call, we'll discuss our 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 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.
non-GAAP financial measures will provide are for comparison purpose only.
<unk> of this measures and a reconciliation table are available in the news release, we issued earlier today as a reminder, this conference call is being recorded in addition, and Investor presentation and a webcast replay of this conference call will be available on the visibility what IR website.
At IR adult that'll be the dotcom.
Joining us today from Billy Billy Senior management are Mr. <unk>, Chen Chairman of the Board and Chief Executive Officer, Nathan Cali, Lee Vice chairwoman of the board and Chief operating Officer and Mr. Sam Fan Chief Financial Officer.
And I'll now turn the call over to Mr Fan, who will read the prepared remarks on behalf of Mr. Chen.
Thank you Juliet and.
Thank you everyone for participating in our 2023 first quarter conference call.
I'm pleased to deliver today's opening remarks on behalf of Mr. Chen.
Our top priority for 2023 year to improve our commercialization efficiency is a narrow our losses.
Our first quarter results demonstrate that we are making solid progress on these goals.
First we delivered over 20% year on year revenue growth from our advertising business.
Our gross margin improved to 22% in the first quarter.
Up from 16% a year ago.
Driving gross profit to increase by 37% yield a year.
Second we continue to take measures to strengthen the execution our expense controls.
We reduced total operating expenses in the first quarter by 11% year over year.
Specifically, we've cut our sales and marketing expenses by 30% year over year, while continuing to expand our teus.
These actions are proving effective in strengthening our bottom line in.
In the first quarter, we narrowed our net loss by 72% year over year.
Progress we have made give us confidence that we are on the right track to achieve our breakeven target.
While we focus on improving our financial matrix, we continue to attract more users and enhance the engagement levels of our community.
In the first quarter.
Or do you use grow by 18% year over year to $93 7 million.
Y O Y meus reached $350 million draw.
Driving our DM ratio up to 29, 7% from 27% a year ago.
Our users continue to value our involving and diverse content with the average daily time spent on PD PD reached 96 minutes in the first quarter.
This brought the total time spend on our platform up 19% year over year.
As we move through the year, we will continue to accumulate our do you use in a cost effective manner.
Give me a lot of our organization and improve our overall commercialization efficiency.
In this way, we can better allocate our resources to areas that further solidify our community.
Emily we are working to expand our creator base and help our creators make more money.
We will also continue to invest in commercialization capabilities, including improving our AD infrastructure further integrating LIBOR cutting and the video operations.
<unk> high quality in house games, as well as exploring aig's opportunities.
Community.
All of which will help us build a tighter community.
Leash more commercial potential of our platform.
With that overview of our progress.
Now like to provide a brief update our stream co pillars content community and commercialization.
Starting with content, our content come to equate with an essential component of our ecosystem. We are dedicated to building a community that enables them to recognize and be rewarded.
As we provide more user friendly I didn't choose professional content operational support and improve their traffic distribution, making their size their favorite allowed to late <unk>. We can increase the volume of kind of equation and attract more creators to our platform.
In the first quarter the number of our daily active content creators increased by 42% with a 79% increase in monthly call their submissions, both our year over year basis.
By further integrating our commercial channels with our content ecosystem, we continue to empower lock on the equator to realize they have commercial value so diverse avenues.
Different content creators can monetize their talent from what they are good at such advertising LIBOR casting all I paid courses and workshops.
Leveraging our platform and support over one 5 million content creators and incomes through multiple channels in the first quarter.
An increase of 50% year over year.
Among them.
Oh of content creators, who earn income by channels, although that our cash incentive program increased by over 55% year over year.
Going forward, we will continue to develop more channels had a product to enable our content creators to achieve their commercial value.
Our motives and Neil rail products, such as Tory Mod also contributed to our truck broad attention for our users and they're satisfied they are diversified video watch and preferences for.
For the first quarter, our total daily video views increased by 37% to $4 1 billion.
Most daily video views grew by 82% and the <unk> views were up 26% in the first quarter.
Both on a year over year basis.
Consumption trends install remote a come and go in and continue to present more opportunities for Cubo lead how what do you use.
Enhancing community engagement levels as well as increasing our commercialization potential.
In addition, we are exploring the integration of AI applications into our content ecosystem.
Utilizing aig's. He can he has both content equation efficiency and our user experience.
We believe it holds great promise as a tremendous potential for the video industry.
Leveraging these involving technology, we can further enrich our content supply empowering our creators to bring their vision to life more easily and effectively.
We are also beta testing new features powered by AI GC to further enhance user experience.
As for our community our user base remains sticky and highly engaged.
And for our community.
Our user base remains sticky and highly engaged the user's average daily time spent on <unk> continue to show stability at 96 minutes.
Monthly interactions was also up 15% year over year to $14 2 billion.
Our coal use of Cole hall of efficient members reached $205 million in the first quarter, showing a 29% increase year over year.
The 12 months of a tender array for official members also remain around 80%.
Our royal and active community allow us to explore more diverse community based exclusive products and services.
Further opening up more commercial opportunities.
Now, let's review, our commercialization, where we are improving how we monetize our offerings to drive margin expansion and narrow our losses.
For the first quarter, our total revenues reached RMB five 1 billion passive.
<unk> revenue from our title business increased by 22% year over year, we continue to take proactive steps to improve our commercialization efficiency to support our top line and increase our gross margin at the company level.
At <unk> in more detail.
First revenue from our Vas business increased by 5% year over year to RMB, two 2 billion for the first quarter.
Mainly driven by the growth of our LIBOR cutting business, we continue to integrate our LIBOR cutting capabilities within our video ecosystem at one of the primary ways for creators monetize their talent more creators are making the transaction to LIBOR cutting holes in the first quarter. The number of monthly active LIBOR cutting.
<unk> increased by 34% year over year, and the number of LIBOR casting paying users increased by 15% year over year. We have also improved the gross margin of LIBOR kaka goodness on both sequential and year on year basis.
And then we expect that trend will continue.
By the end of March we had 22 million premier members over 80% of these while annual auto renewal packages subscribers.
Which represents strong trust in our brand and the content offerings.
Turning to our advertising business, our AD revenues increased by 22% year over year to RMB, one 3 billion in the first quarter.
Largely resulting from our AD infrastructure improvements.
Over the past year, we have expanded and optimized our AD product offerings at the same time, we have been continuously building, our commercial database and improving our AD algorithm to drive by that to ally will add clients.
The results are encouraging.
Performance based AD revenue record nearly 50% year on year growth in the first quarter why brand as a native AD also recorded positive year on year growth.
Our top performing verticals for the first quarter will again digital products and home appliances.
E Commerce, skincare and cosmetics and automotive.
Users are showing increased spending power and diversified consumption needs as they grow through new life stages.
This dynamic is attracting more advertisers from border vehicles to our platform such as automotive and home appliances.
Looking now at our can business.
Revenue for the first quarter, while on the one 1 billion at the rate of Gamma pool, both begin to normalize we will come to more titles in our pipeline.
We plan to release, a new titles in the domestic market in coming quarters. These include <unk> highly anticipated game pretty Debbie shon yellow you'll deal with Xiaomi.
<unk>, our first shelf government Cam in the female romance, Jarrod and our self development ACG card game.
Yeah.
In addition, we successfully co published the Hawkeye Star Rail life's interest you at all in April and reverse 1999 talking about whaler ijo, Georgia in may demonstrating our strong distribution capabilities.
Turning to our IP iterative and others previously known as E Commerce and others revenues for the first quarter was RMB $510 million.
A decrease of 15% year over year.
The decrease in revenue was mainly due to our proactive strategy shift to focus on increasing profitability.
In the first quarter module for IP narratives and others include a meaningfully by this approach and we expect <unk> will continue to improve going forward.
Lastly, we recently published our data led to annual yet to report, which highlights the value, we create and bring to young generations in China.
We are committed to furthering our social responsibility fostering a welcoming community for users creators and are working towards a sustainable future for all.
In summary, the actions, we have taken effectively improving our financial performance and operating capabilities. While we continue to grow our dynamic community throughout this year, we will further execute our strategy and continuing to expand our gross margin and narrow our loss. It just can't commit the 10th remarks.
Our now provide a brief overview of our financial results for the first quarter after returning three and our outlook for the year.
Total net revenues for the first quarter was RMB five 1 billion flat compared with the same period last year.
Our total net revenue breakdown by revenue stream was approximately 43% that 25% of tithing, 22% in mobile games, and 10% of our IP iterative and others.
Our cost of revenues decreased by 7% year over year, driving our gross profit to RMB, one 1 billion up 37% year over year, while our gross margin was 22% or 16% from the same period last year.
With our tightly controlled cost structure, we expect to show continued margin improvement throughout 2023.
Our total operating expenses were down 11% year over year fell two 1% quarter over quarter.
We are maintaining tight control of our expenses, while we work to increase our commercial postbac, we cut sales and marketing expenses by 30% year over year, while our da use grow by 18% year over year.
Percentage of total revenue sales and marketing was 17% compared with 25% in the same period last year.
G&A expenses was RMB $572 million up 7% year over year.
The expenses was RMB 1 billion, representing a 2% increase year over year.
We expect to continued strict control of our operating expenses going forward.
Our net loss and adjusted net loss was RMB $630 million and RMB 1 billion.
<unk> by 72% and 38% year over year.
<unk> activity, our net loss ratio in the first quarter was 12% narrow for a 45% of our same period a year ago.
Turning to our capital allocation and the liability management.
We currently have three outstanding see beef that totaled $1 6 billion U S dollar.
Among these are total principal amount of 746 million U S. Dollar of 127 CBS has the upcoming pool rise, which are exercisable through June of this year.
As of March 31, 2023, we had a cash and cash equivalents time deposits and short term investments of $19 4 billion RMB, two 8 billion U S dollar would.
We believe this amount is sufficient to cover all of our remaining color Paul see beef and fund our future operations, including the put rights on our 2027 and CBS .
With that in mind.
With that in mind, we reiterate our expectation for net revenue for the full year of 2023 to <unk> 24 billion RMB 26 billion RMB.
Thank you for your attention we would now like to open the call to your questions. Operator. Please go ahead.
Thank you Dear participants as a reminder, if you wish to ask a question. Please press star one one on the telephone keypad and wait for your name to be announced to withdraw your question. Please press star one again.
Benefit of all participants on today's call. If you wish to ask a question to management in Chinese. Please immediately repeat your question in English.
Third party interpret cat will provide consecutive interpretation for management's statements during the Q&A session.
Please note that English interpretation is for convenience purposes, only in the case of any discrepancy managements statements in the original language will prevail.
Please limit your questions to one at the time, if you wish to have a follow up question. Please rejoin the queue. Please Jim Barber will compile the Q&A rules. This will take a few moments.
Now we're going to take the first question.
Okay.
And the question comes from the line of Daniel Chen from Jpmorgan. Your line is open. Please ask your question.
Nick.
Great I'll go with your warranty nickel, where you're going to you're surprised that they own or they are quite a bit.
Julia you Wonder woman.
Chocolate on G O.
Diego London assets this year.
Does it come out and they use their quiet she said some years you're somewhat sensitive.
EMEA ratios so teachers on Sunday.
So I wanted to ask why don't you found them at the same time charters they want them.
Call. It turns out she said that you got that one just yet I would translate myself. So I have a question related to the user growth. So we saw that.
We actually we have under the.
The situations that also our lowest sales and marketing expense in the first quarter, we actually have for.
Sustainable growth I'll state the active user in the first quarter.
Higher <unk> ratio in the first quarter, so could management, maybe share a little bit R&D future user growth.
Outlook and also strategy. Thank you.
Okay.
Yes.
So it does.
Hopefully that will then tie it all goes through.
It seems that they will go down.
So some kind of answer that so that should answer that youre sure Diego.
Pakistan on previous earnings calls, we have adopted a more quality oriented approach to user growth and by quality I'm, particularly referring to <unk> growth.
Similar to the theater.
He is also something of ourselves and you can also cause some thinking on how that goes over to you.
Diego to Jim Thompson.
Please don't tell me if I told you the total.
Our tissue.
At this current stage one of our top priorities is to improve the efficiency of commercial aviation high quality <unk> growth and user engagement are the cornerstone of strengthening commercialization.
So you don't want machines that can kind of go down the road.
These aliquippa Orlando prefer going towards R&D.
Sure.
Jonathan.
Diego.
Okay.
With that well now of course geology, but he do that woman.
Yes.
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Her people about woman doesn't need the sales and marketing vertical topic, let me I'll jump back in his answer.
But diego to Colombia.
This is about.
Sure.
Hmm.
This quality oriented user growth strategy means that we have to pivot away from <unk> towards you and a little bit at the last several quarters, we have achieved sales and marketing expense reductions, while our <unk> number continues to climb up and Q1 sales and marketing expense was down by 30%, but our <unk> increased by.
18% to $93 7 million.
So I'll kind of echo some PPA at Hyundai.
Yeah.
What are you going to go.
Yeah.
Please don't go down so that either you go saia hardly you could tell me about what is the tea.
Hello woman, that's sort of a zone.
Yeah, you're the CFO question Diego, Marquis that Mou, Paul <unk>, who is a key word Hugo you don't put undue hope will do so this year that he has all of them.
Okay.
So compared to <unk> <unk> is a better indicator of user engagement and <unk>.
Commercialization potential and our strategy will continue to focus more on <unk> going forward and where would you use this indicator to monitor our performance and drive up average user time spend NPA ratio.
Phil you woman does either.
And so you look at all of that.
Our resilient sheet.
I'll answer the hydro sale.
You mentioned that the quarter's Eva weird.
She said, yes, sure, especially those that he got his own woman.
Yes.
Sure. So it's really a bundle or do you.
So should we allow a more convenient way for doctors, who want monthly.
So youll be I may order to the BD also toward the C&I that every year.
I see.
Building on a stable we now want to further improve retention and engagement in Q1 <unk> ratio grew to 29, 7% and average daily time spent reached 96 minutes going forward, we expect to see further increase in the <unk> ratio.
Yes.
Well I don't think it's that long life.
It's a real wage piece on the click on Wassa, possibly yugo.
That's always going to find even more so that just really well now.
Well done on the cheap.
Oh on the pink I'm going to answer that.
You also then it always seemed like them, who are <unk> for the Eagle Ford here do.
Rajeev would've thought Gee these homes OTA she won't go portfolio consolidate down on ERO I'll tell there you go.
<unk> young woman.
He knows all about Selina to support it.
Well I. This is the Diego senior convenes doughnuts free boat show season.
Sure.
Going forward I think building. This business model is one of a virtuous cycle because the content creators the content supply and the quality of content here. It means that we're able to attract high quality users and the community here means that those users will stay and they will remain engaged and then that creates the moment.
For the content creators to generate even better content. So this is like a virtuous cycle. That's why we're looking at our user growth trend I think we will be able to continue to grow our ta you in the future.
Yes.
Yeah.
Oh.
Okay.
Thank you.
Now we're going to take over next question.
Okay.
Please standby.
And the next question comes from the line of young.
<unk> from China Renaissance. Your line is open please ask your question.
Hey, Glenn.
Sure.
You are calling on them on tier two accounts online towards Hong Kong unambiguous. Thanks, Alexandra <unk> wish I could tell you on yet.
Touching upon such as always tell Mercury rule, but she centrica.
Our timeshare celebrate already it's just I'm not sure.
All of a sudden you call. It just have a couple of you can go to a longer time to.
And the parties are in Colorado.
You won't come out of it.
So we are talking about just hung in there now and they went to 29. So we are trying to cut all had taught each year.
Talk about your heart failure.
China, Southern China May Alex just yet.
So my question here, Rick on heightened alert.
Did they look like they could set a Y O Y growth as revenue, which was sort of the right way.
Can you share more color on how we improve our products and our efficiency.
And what she has our view on that.
As market correspondingly it what kind of trajectory of <unk> adoption in this market and adopt clear recently so many.
Exploration in the retail format our lifestyle format.
I wanted to just progress there. Thank you.
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I know that you're all keyed up quangos.
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Josh I told me the job for a chunk of that patent the Jones Act.
Do you think he bought that that don't quote me on my watch.
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Okay.
So in Q1, we saw that advertising marketing, China started to warm up and is expected to achieve double digit growth, but at BD PD. Our growth in Q1 was 22%, which I believe is greater than the industry average and of course, we managed to capture more market share. If you look at performance ads, specifically, but year on year growth for us was higher than <unk>.
60% is five zero.
Yeah.
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It won't play towards the adult Guangzhou Gee, how long you talk you said Chardonnay, Joe yourself as final hold that line as soon as you want.
So just Mr. Chen just like Mr. Chen mentioned in the context of healthy <unk> growth. We're very confident that this will feed back into our advertising revenue growth and specifically I think our business is driven by both horizontal and vertical improvements as well as by new opportunities that come with vibrant transaction.
And our community.
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Keystone, Social Shan Shan Shan will knowledge tissue, Guangzhou, Shanghai jumped quite a full gut Jodi Youll CFO .
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By horizontally improvement I'm, referring to strengthening technical and data capabilities on the middle platform for greater efficiency first algorithm optimization can help increase the ratio of so called deep conversion, which commands higher CPM than shallow conversion gaming industry. For example, the ratio has now.
Increased to 35%.
Sure Bob Jones at Cheyenne.
Hi, John Scheurer, Joan Josh.
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Second we want to increase the supply of commercial traffic users commercial behavior is now one of the indicators, we monitor for traffic management, we want to ensure that sound user experience, while leveraging the user LTV model to make dynamic adjustments in the ad load.
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Just don't know so aig's seats on me I won't call. You you don't want to tell you the T showing up which tissue Guangzhou. It sounds just real quick ones only homes that don't heightened Elyse Allan can you quantify with shoulder to shoulder found yet.
Thirdly dealing structure. It's also essential we've established a science backed mark to your methodology in 2022, we put forward the make model, which helps clients refine their advertising plans prior to purchase and then help them measure the outcome. Afterwards. This model was further validated.
In the auto and FMC G sector in Q1, and lastly, AIG C will also contribute to add operation and the conversion efficiency. So that's what I'm talking about when I sat horizontal improvement to by the middle platform.
Each of US Oh Quay, C&D, well means that Shanghai Geneva, Little Dow Jones.
Yes, no change on people don't have yes, that'd be one o'clock on washing that's all in place already.
Actual vertical improvement starting last year, we've been building and creating tailored models for six key industries. So that their ads can target the right users at BBB here are some here are two examples.
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Great question.
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For instance, gaming, particularly it's known for our concentration of highly active high value gamers in Q1 more than 40% of our mobile users watched game videos or live broadcasting on a daily basis, and our teams responsible for game content game distribution and game advertise.
<unk> now worked closely together towards shared goals, which paves the way for better than expected Inc.
User conversion and branding outcomes.
Video views for our latest game Hong High Star rail in the initial two weeks, it's three seven times that of change and impact for the same timeframe and as a result, the game distribution and AD revenue.
Are also higher than changing impact over that same timeframe in the first week.
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So Jamie <unk>, Eylea and don't pin pad, that's going to show what downtown one shall I think people that you can sell routine well My high school you Chino Scythians only standout survey that's old Joseph.
That's what e-commerce, thanks to our data partnerships with Alibaba PDT in J D. At efficiency has improved meaningfully with Q1 revenue growing by more than 110% year on year. During the June 18th shopping festival with a well rounded marketing matrix, including sparkle branding.
E Commerce performance ads, we project that our revenue could potentially triple or even quadruple.
Tricia you why though.
Sure.
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They like the way allowed us to really nail the Hiseq Obl's teaching notes issued in Cala Jonestown.
And for our verticals electronics FMC Gn auto sector, we're confident that we'll be able to continue with the trend up healthy Roes going forward.
Just hold all our niche she's dealerships, England.
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The social dialogue seemed a little thing that you're quite right Shin young.
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Someone had an aldi.
With regard to video and live broadcasting E Commerce, I think of it as incremental growth opportunities with both AD revenue and content creators in comps. This is the result of vibrant transactions in our community.
Last year as all the other content platforms. We're building close loop E. Commerce systems. We have remained committed to building an open ecosystem that is connected with all the other e-commerce sites out there. It is about shaping the user's mindset to view <unk> as the place for shopping and to Foster theater capacity for <unk>.
Transactions here.
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Okay.
The performance in Q1 exceeded our expectations in Q1, there were over 10 million users, placing ecommerce orders on BTB everyday and we also launched a dual performance product that facilitates both wished lifting and transactions, which accounted for about 30% of our performance ads in Q1.
Thomas.
Our tcs absolute showing or whether you're just seeing a little genes by the Tianjin.
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One the op towards houses that these unchartered CFO , Joe yourself talk all the time, so I <unk> sure well me a truthful portola make John Simpson restroom absolutely.
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Great. Thank you.
How are you going to solve it as Sundar. So you sound just kind of touch a whole need all the <unk> 60 anchor and see what that haul them, it's about patterns of lunch.
Actions, we will get even stronger at bvd. So that's my take on how video and lifestyle.
Life's broadcasting E Commerce will evolve on the platform.
Yeah.
Thank you.
Now we're going to take over next question.
Go ahead.
Just give us some amendments.
And the next question comes from the line of linkage coal.
Goldman Sachs. Your line is open please ask your question.
Hey, How's it here by the time now to go win T claim both home yet.
It took a triple to quad.
So it sounds like quite a.
Okay seem quite precise answer for you without a fatality hotel.
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Mr. Without you have to put them on <unk>.
We cannot make it.
Thank you management for taking my question.
It's about our luxury business, we've been seeing a recipe.
A quickly growing our business for live streaming how should we think about that.
The future strategy and outlook.
Especially in terms of the integration of her lifestyle.
And as far as the.
Overall gross margin.
Trends for the live streaming business. Thank you.
Well of course easier both for visa shipping something either forgotten.
So a little harder for a woman easily youre liable monthly that Shibuya would have hydro civil ease about shipbuilding shipping so kind of a chunky Latvia.
We've always said that live streaming is a natural extension of our video ecosystem. So operationally we have always considered not.
Not live broadcasting asking an integral whole off our total operation.
The woman that Jabil homeless sitting tight you just sell them when they're going to Cushing.
Okay.
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Josh Hi.
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Well for now.
Yeah.
So large broadcasting and videos on PDD, sometimes often target the same demographics and there was a lot of overlap and category as well and a lot of times. The lives broadcasters are video creators and law.
Last year since last year, we have been focusing on the fusion and integration between live broadcasting and the videos so as to empower the life broadcasting business with momentum from the video ecosystem.
Yeah.
Or does it seem that you bore you with that <expletive> ton.
That's.
That's one little lifestyle, you'll woman.
Bock, who are shipping yet.
It doesn't mean, you're going to change that but we're looking at $10 <unk>.
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So the comp is under 500.
Thank you Bob.
Well look back because it's your shoulder syndrome Virtualized leave your woman switching the arbitral Coleman.
I think the success, we're having able to achieve with live broadcasting is precisely due to the efforts we have put in to integrate video and live streaming ecosystem in Q1 and the number of video creators will also to live streams increased by 38% and 90% of news live streamers.
We're either average users or video creators.
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With that I thought the only.
Okay.
The video ecosystem as a source of vitality and content fall, where live streaming business and in Q1, the number of active by streamers increased by 34% and the number of emptied use grew by 15%. That's how we are empowering life's creamings through our video ecosystem.
Well not really but somehow gauge of Vodafone on the highway you got his answer was a pill that even without those set up is actually shrinking.
Further you got peanuts, so it seems like you're young woman border, Chile fade, how harmful up your resources are a woman and they'll take the shipyard.
<unk> I think we can never be done with cortisol well.
Well machine the English.
She arbuckle acute you don't think alter ego themed patches are likely to go surfing. The anticorruption, let you go.
You bet.
Bill metallic somebody you can talk to you about general woman, that's either negotiate I would tell you.
However government support.
<unk> Assortments bastone, whether you go somewhere else.
Yeah.
So PDD boasts a very diversified categories of video content and this has also contributed to the diversity of our live streaming content. One hallmark of that is our V cheaper, which is PPD is now home to the largest group out vitro births in China and this is a.
Natural extension of our ACG content from the video side and today be troopers or important source of income for live streaming.
The only thing that I think.
She neutral what are they Oh go ahead.
Okay helpful. Either Oh, there's no real way. So you don't think the yes, you say, though you're going to see the Eagle Ford with you Joseph.
There are some known under the finishings out food cans.
Okay, the hydro sale.
You always have a feel for what how can we help itself with Aviva CFO .
Ian and local gatherings I wasn't saying oncology you got me either.
The issuers are very active group Hawks on bikes creamers on bvd and with the help of AIG C. I think they will be able to generate even more vivid and lively images and content for the users and the whole experience can be more interactive for the users as well so I'm personally very optimistic about <unk>.
<unk>.
The highlight here trades.
Javier <unk>.
They found out they really assume that these are how many years ago.
So there's a whole meal.
Oh man.
She had a yahoo.
Does the new rule.
Good morning, David Santee is definitely back because people have whether he's here.
When he thought leaders that percentage of war element this year.
Okay.
Yeah, There you go.
Uh huh.
Yes.
And the Bvd also aims to be diversified and cover as many vehicles as possible and that you wouldn't believe that but lawyers.
Legal matters its a very popular category on BD PD. Some lawyers. They also double as live streamers, our platform answering legal questions to the viewers, sometimes they have to answer very insignificant inconsequential tiny questions whatever the viewers want to Aspen and it's also something that <unk> offers.
Yes.
Okay.
Let's see here.
So it's somewhat yeah, the way to yourself.
You can go about at all.
So you don't know how you can do other things.
Here the rates you talked to that do you guys have been unfortunate border to wait just a thought there.
The country, that's how can those things up and Tradeshow consultants leave I'll touch a little hot.
So you'd see a way to I apologize I'm not allowed to see that'd be done centrally.
Somewhat highlight some of the on the other day the secret to this years I'll tell you we'll talk to you guys on Mueller co Guangyao hurdle.
And another example would be go Wow, we have roughly thousands of gold players in China.
The vast majority of whom have already joined the PDP. The community has live streamers and even though it's a very niche hobby somehow ended up together on our platform, where you didn't have a lot of go players from the province of Taiwan interacting with our users on the platform.
So with that said Judy Zohydro herself shlomi.
And I think that's what has really you go phase hung thoughtful query than they are.
How do you women I was hoping to see you go.
So we're happy with the things like <unk>.
Hudson.
Uh huh.
Oh I'm sorry.
So at the moment.
So you're going to target.
Obviously, you guys have well manageable equally stages towards office hotel.
These examples goes to show that live streaming itself is very dynamic and diversified on <unk>. It's not just another revenue stream for us. It actually has a lot of content to offer and holds tremendous potential and as our video business grow stronger and bigger.
I believe our live streaming live broadcasting business will also be able to expand and improve.
Sure.
So of course, you might have.
So these underneath.
Ohio, you pay the somewhat hung out with talking how working around Covid. So it was really designed to support us in that.
It sounds like you got some about Colombia.
What's your though neither or less shipping to the border.
What does that how do you guys. I mean, you got something they don't quite have the only medicine.
It was the opposite with auto Ingersoll amongst the border to border.
What else would you can you tell us what either so nothing really with all the optical publishable quarter or so that easy to do.
Well maintain what's his surrender stripping obviously cohorts.
No.
Okay.
During previous earnings calls that's that that's nice premium business could potentially at least double and I could say that again at this call I believe live streaming has at least the potential to double that to be PPV and diffusion between video and live streaming will continue to in house theoretically ever.
User can be a video viewer ethanol has the livestream viewers and arabiyeh broadcaster can generate video content as well as live streaming content and this is now also with imports into the income stream for creators in Q1 700000 creators, we're able to make the income from live streaming.
Our two suburban subpoena.
And I don't have any eagle with Trulia.
You got woman support a multi county or does it come back.
We like their daughter.
The arbitral.
Florida Towell no that's helpful.
Zeal, one and two great brands.
Your heart or Celgene will Linda so bottom already equipped with LTE song.
And fusion between video and live streaming could also drive out our gross margin and reduce cost as more ordinary users are doing live streams on their own and the cost of bandwidth being spread out even if we.
We believe the gross margin for live streaming business, we will continue to improve.
Yes.
How is it.
Thank you.
Yeah.
Now I will go and take our next question.
Just give us some damage.
And the next question comes from the line of Lee Siang from Bank of America Securities. Your line is open piece of your question.
Oh, Hi, good morning, gentlemen, how are you thinking what you wanted to see what were the one to two hours sure what do you think.
Yeah, well Conor.
I'll walk us through that vehicle.
No one here.
At constant rates aren't Goldman Sachs.
Yeah.
That's our model.
This arbitrage not crazy.
Hum.
Derbyshire Jan Hommen.
Gotcha.
Oh yeah.
Thank you management for taking my question why.
Why don't you ask me about Oh monetization of the compound quite HR, which we noticed that the pure slate.
They have some wildly discussion.
H that so can you hear us.
Color on how we can improve either the total income all the commercial value of compound quite HR. So I'm gonna BD. Thank you.
So those are the CFO .
Yeah.
The Windsor, so hopefully the pizza, obviously that he knows how where it all goes into the two hours with Hamlin.
So what was the CFO ones on top.
The team of hundreds of Rudolph.
Holly massage or neighborhood humans hot in Hollywood, and you'll have to get all the way up.
Neither Joe Hill these aren't sure G by Alonso I think I'll just go for it.
All the time, we get there are another substitute other semi Oswald CFO .
I feel our calls with you.
So if you're going to see.
He thought the Sandler sold out very high diagnosing facilities.
Well just how does the political window. The plc is on schedule and singularity Aegean policy at Ha May Tee it up take a particular thought that sure.
Part of it.
Uh huh.
Okay.
Well I think you're referring to in the article released in April about Manny.
Article claims that many creators on PDD stopped uploading new content to the platform I read it myself and I think this article is nothing but misleading.
And he this article mentioned three content creators who passed their update past their video content updates.
Millions of Concentrators, we have on PDP D. The Arco mentioned only three and two of those three you actually have released a new content since then.
So I think even though the article has a quite clickbait title on the <unk>.
And the reasoning in this article was misleading.
Oh darn pool.
California.
The fact that yes, or no complaints enthusiasts.
Possibly.
Following the holiday.
Hello, Jaco, what they're calling a nickel anti RK Hello made here about take a.
Particularly I think Owen diet and I apologize.
Yeah, Chris I'll note that the label really thought about.
Well the neighborhood Ayatollah neither.
Sure.
So those are supersonic.
Pizza under arbitral with I think I saw your father's either to the contour so core to the Union Tushar film the neighborhood.
The charts on the artist or should Italian uncle integrated.
I think this article was able to start a heated debate is proof that people aren't paying happy that you pay attention to BTT very closely and there's some media even went down to write derivative reports on this article and that's why we and that that discussion it ended up on the heart.
Hot topic list off label and internally, we have been made are making a lot of efforts to improve commercialization for content creators SPD BD and we have numbers to back that up.
Okay.
So convenience users.
Hi for the order goes all.
My phone call and in the Congo Congo.
<unk> yeah.
And I think it was higher.
And that easily.
So a lot of opportunity.
So tangle with visa.
Of course, you saw.
Yeah, Oh, Gee configure it won't be some gotcha.
Sure.
Akshay.
Have a quarter or two.
Just the opposite with her.
<unk> got more.
So the quarter solar senior.
The door.
Yeah.
We haven't done a lot of work to help our content creators monetize in Q1 alone $1 5 million content creators earned net income on BD PD up by 60% year on year and the amount they were making from advertising lifestyle me and also user payment has also increased many meaningfully.
Well, maybe when you're only Manhattan.
But all of them in that regard.
Although it's easy to use.
Hotel.
He is a proven my daughter hole, putting far obviously, that's something somebody else. She said she even without just a woman can legal.
Total.
Total <unk> Congo Jeanie.
So you might get and he said Lee how do they own that means you're at someone's hand, the opposite.
So which is a European package, how do you go and you can't really have some pocket having people care about.
Oh single event for me and do it.
Do you want to think shop opportunity are you I think you saw the opposite with Hudson Buda well, Mr. Volatile with have you talked to potential in Canada.
So I, just didnt eagle or does it typically is.
Johnny you go even without that it would hold those units you said that you will not sure that I would think either to go solo.
Partial Mayo somebody Utah.
I mean, its hard Covid has also said that <unk> cutting incentives for content creation, which could have some ramifications. This is again bearing in Sweden, because the incentive programs. We have is only for our content creators with fewer than 10000 followers basically we provide them the subsidy.
Help them tight over the initial pure readout content creation when they did not have the ability to generate any income for themselves and for content creators that have more than 10000 followers. We help them find the tools to make money on their own. So this incentive program doesn't really matter for the vast majority of.
The creators on our platform.
So.
Not just any of it which is the opposite of that I think if someone's hand convinced for women go sequentially. If you look on all of that just puts you well know.
We'll answer that policyholders are bound to the appetite is on the local NEVA well then that does that hit all of that.
When they're young daughter.
And the arbitrage.
<unk> launched your board a little bit on what that actual so does that change it will go from there.
So Sheila gotcha even.
Even with Easter you owe it to Sergio well end up half the opposite.
Of course open the door to solar without having them go your daughter Tingly funds at Transalta.
Okay.
Helping our creators monetize that's always been a priority in our work we have established the sparkle system to help content creators get commercial deals. We have also been empowering video creators to switch to light screening. So they have to meet they can make the income there. So this effort we will never stop we will step our effort.
To help them make the income that's why that's because we believe only when those content creators don't have to worry about money they will be able to invest more energy into generating high quality content.
So all in all the latter South Florida.
Uh huh.
What are you seeing that makes you and generally either tolerances.
They don't call it doesn't necessarily say year, one the arbitrage, let's see if all of the opposite.
Oh tier tabulate, how long do you suddenly go once in La <unk>.
Will it be done.
Lee would you look at the ICR it sounds in visa Europe is of course you.
So the only element just saw your Dongo Qt somewhat daughter, you'll show the arbitrage touches endorsing a woman each tien.
Sure.
You'll answer <expletive> women ages challenging Congress or the leader.
Particularly sort of woman Eli.
Well, maybe younger without fungi, yes uhm.
Three of the hydrothermal go the opposite and I'm glad to hear that one until the launch.
You were a woman arbitral Taco the hall, you may well mean.
Geography.
Women's hand on the go.
G sounder you'd go to eliminate all the English somehow a woman can deem quit.
So it's true the chute, just because the average WOMAC with GSA to Hammer hard home show them real quick.
She will work with the leader.
Hum in southern cone.
What might you do with your protocol.
Okay.
So this article was able to trigger such a discussion and showed that users actually clear a lot of the creators and the <unk> platform and the reason why we're able to have such a high concentration of high caliber creator is because we believe in the value of high quality content and powered off traders.
This has always been and will always be a guiding principle in all of our accretion we have always treated creators nicely because we understand their needs and we are going to spare no effort in supporting those creators and helping them earn an income that agents are this is a work will carry out continuously.
Akshay.
Jonathan Thank you.
Thank you.
Okay.
Now we will go and take our next question.
Just give US amendment next question please.
And the next question comes from the line of shouting Shang from TICC. Your line is open. Please ask your question.
Okay.
Uh huh.
You bet.
Hey, Josh.
Just to come back in 2000.
Yes.
Uh Huh, Mike Johnson <unk> Johnson.
I think Jonathan.
Jan Madsen.
Washington, yet.
Good evening management. Thanks for taking my question My question is about lithium.
Yeah Moshe prepared remarks, that's not really has some wont be approved.
So can management share with a second pipeline and that what's CFO .
Thank you.
Okay.
Because this is where youll see the Tanya.
I'm wondering about how my read of that Bob.
Oh single about heart function following a failure.
Hi, This is Nick <unk>.
So it's about holiday events when Italy.
<unk> put in Lee Holman.
Ideally how long does it take a cough cough, what's your volume.
This year, it's going to be a big year for the gaming industry licenses for domestic games are now issued regularly every mouse for imported games two batches of licenses have been handed out since last year, which is great not just for our game distribution business, but also for advertising and live broadcasting as well.
So no woman, so youll find that at all.
You will see it.
Oh, it's about that you'll see hopefully without passing on the higher what you'll see with that party.
I realize that you could see the warm temps, so sometimes youll see it critical to one of your other ones out there.
Okay.
In the next several quarters, we have 13 games to be launched at home and abroad eight of which have acquired a domestic game licenses and we will be publishing China five of them will be published overseas.
So it's one thing to well myalgia, neither father, you'll see that kind of off to her well 19 vessels.
They want the name.
And that review with each of her Shanghai, Sanya, particularly you'll see a pattern here, but the harvest endorses that say hold even if you're talking about.
Element that you haven't got it that's all.
When Ohio down Pat.
With us food for thought.
Young yet you guys are.
Components, insomnia, which is like a bundle.
How are you gonna silver and three in the ASEAN hop Iot as a little girl.
We are now preparing for the launch of the high profile again with distribute caught pretty Derby and we are now working around the clock to finish the last bits of localization work for this game before lunch and we also have to self developed titles outlined records, which is the female romance.
Gain and also a russo and ACG card game, which will be published later this summer.
So let's see here.
You may now Youll see the.
The woman Sonya, the Ohio, her or me a call to her fashion.
Passing hardly anything in front of me in the Yorkshire, England team.
<unk> without the DOCSIS yerba. So here he is at his yellow what Matt for ongoing engineering work with Atg her arguably Randall that's out there to take care of today, you're looking back to people. It's only the fifth in the mid <unk>.
I think you won't get all the pieces and the beat here in the South that Joe said about Oslo Barcelona.
Yes.
That's a piece of it.
At least it sounds like you got charter zero Okay.
I just got.
Yeah, how are you kind of thoughtful amount to her family.
I, usually yoyo, yes sure Nathan.
Hospitality.
Yeah.
PPD is home to the largest group of ACG gamers and fans and also both the very young user base, which makes us the core channels for distributing ACG games.
Beginning of the year, we've successfully distributed many ACG titles proving our worst once again, Hong K Star real tiny how you and it's a great example of that which achieved a whopping $2 8 million first day download on bvd setting a new record for our game distribution business and just yesterday our distribution.
The game reversed 1919 Knight was published with Great initial feedback.
You'll put out Ohio is that pricing and those are the three and you'll see that it seems that contact is always hit other than at home I'm not sure Alexandre <unk>.
Oh down class, maybe whatever you want to walk through the agenda.
While monthly anti nausea.
Another one that Covid, that's whole day, sorry, if he literally angles here.
You'll see a pattern, that's what I think that you'll see.
Considering all of the sales or thinking Korea.
You guys are thinking.
Maybe if I say annual city of Hydro <unk>.
Uh huh.
The team has seen the highest retail you can see.
Frankly I forget.
Maybe sorry, if she doesn't even the annulus gotcha, just holiday Conium golf without that Danielle I'll definitely Iot, if I'm gonna Nico will not quit tense.
We intend to use for the Lion King tangible passing doesn't mean, you've Italia, let's see if I may one more quick.
All youre shifting with it.
One more quick thoughts our CFO until they either figure it hurts create late either either tell me if that's okay tensors hogging them. So you know.
C Corp, where my highest nighthawk.
Many people are interested in our self developed games two examples I mentioned just now our.
Our cable and records and at Ruth's, though and we have more pipeline games under development, but senior salespeople up the games, we only want to be delivering high quality games. So the cycle will be relatively long and each game will take about three years with development and the next to sell a particular uptick.
<unk> will probably be published around the year after next.
We will stick to the strategy.
Self developed a quality games and global distribution insurance of game genres, we will focus more on our forte such has ACG card games. Our goal is to develop top ranking games in niche segments and manage them well over a long life cycle, and we're putting the hard effort needed to.
<unk> achieved success on this front.
Okay.
No.
Thank you.
Now I will go and take our last question.
Please standby.
And the question comes from the line of Felix Liu from UBS. Your line is open. Please ask your question.
Okay. Thank you.
Nicole.
Uh huh.
Okay.
Okay.
That concludes a you won't come in as if they pay outlet hang on let say on the question unless you own.
Oh, one hotel.
Yeah that was I think even the book value.
So you guys have any country.
Michelle quite a site in Shanghai, that's you got to go out.
Sure Tony.
Uh huh.
I think you mentioned looks like taking my question and congratulations on the improvement.
You can buy online.
Can management elaborate a little bit more measures you have taken and <unk> to try and keep the margin loss narrowed.
Exactly.
Thank you.
Or does this EM.
Our take your question.
Fox of this theory is very clear to the improved gross margin.
In time, we will reduce our net loss in the first quarter, our gross profit area year over year growth.
Grow about 47% and net loss narrowed considerably about 72% year over year and 58% quarter over quarter.
From the revenue side.
We continue to improve the quality of the revenues.
As we mentioned no grow by 22% year over year. So it's a high margin business and as our cost there and we do can be improved.
El Abra operation.
Operational efficiency and achieve a year on year decrease of 7% of total costs.
Uh huh.
So that does without the GP.
<unk> bye.
37% and the GP margin improved to 22% comparable.
50% last year.
So.
Use the technology upgrading and the <unk>.
Now to operation no measurement.
The bandwidth cost for example.
<unk> continued to decline down about 16% year on year, and 12% quarter over quarter and other fixed costs going up a label and other operational costs also for about.
A 7% year on year at a month quarter over quarter, so from the expense side.
We are therefore, the overall operating expenses decreased significantly.
About 11% year over year.
<unk> increased by 18%.
So we will keep actively control our operating expenses, especially the marketing expenses, which already down about 30% year on year in Q1, I think that well beat that trend will continue.
In the foreign cultures. So we are quite confident that we've controlled our cost and expense our gross profit module well on improved quarter over quarter, if any of this year and the.
Operating expenses were also show a meaningful year on year decline.
To achieve a further narrowing net loss.
Thank you.
Thank you.
Thank you.
And that concludes the question and answer session. Thank you once again for joining the <unk> first quarter trying to 'twenty three financial results and business update conference call. Today. If you have any further questions. Please contact Juliet Yang daily business Executive director.
Santa financial Communications contact information for IR in both China and the U S can be found in today's press release have a great day.
Okay.
[music].
Okay.
[music].