Q4 2023 Bilibili Inc Earnings Call

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Unknown Attendee: Hello Class of 2020, Hope all hours of the month are peaceful. Have a good day and enjoy yourselves. Sponsored ADR Class Z, Good day and welcome to Bilibili's 2023 fourth quarter and fiscal year financial results and business update conference call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Juliet Yang, Executive Director of Investor Relations. Please go ahead.

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Okay.

Speaker Change: Good day and welcome to the pellet police 2023 fourth quarter and fiscal year financial results and discuss update conference call.

This 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.

Juliet Yang: Thank you. During this call, we'll discuss business outlook and make forward-looking comments. These comments are based on our predictions and expectations as of today. However, 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. Non-definitional measures we provide are for comparison purposes only

Juliet Yang: Thank you operator.

Juliet Yang: During this call well 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.

Juliet Yang: And all certainties, including those mentioned in our most recent filing with the SEC at Hong Kong stock exchange.

Juliet Yang: non-GAAP financial measures. We provide are for comparison purposes only definitions of these measures and a reconciliation table are available in the news release, we issued earlier today.

Juliet Yang: The definition of dispatchers and a Reconciliation Table are available in the news release we issued earlier today. 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 Bilibili IR website at ir.bilibili.com. Joining us today from Bilibili Center Management are Mr. Rui Chen, Chairman of the Board and Chief Executive Officer. Ms. Kali Lee, Vice Chairwoman of the Board and Chief Operating Officer, and Mr. Sun Fan, Chief Financial Officer. I will now turn the call over to Mr.

Juliet Yang: As a reminder, this conference is being recorded.

Juliet Yang: In addition, an investor presentation and webcast replay of this conference call will be available on the IR website at IR docs.

Juliet Yang: Dot com.

Juliet Yang: Joining us today from <unk> management are Mr. Li Chen Chairman of the Board and Chief Executive Officer.

Juliet Yang: Carly Lee Vice chairwoman of the board and Chief operating Officer, and Mr. Sam Fan Chief Financial Officer.

Xin Fan: I will now turn the call over to Mr Fan, who will read the prepared remarks on behalf of Mr. Chen.

Xin Fan: Fan, who will read the prepared remarks on behalf of Mr. Thank you, Juliet, and thank you, everyone, for participating in our 2023 year-end conference call to discuss our financial and operating results. I'm pleased to deliver today's opening remarks on behalf of Mr. Chen. In 2023, we navigated a landscape of challenges and opportunities and achieved a number of important milestones in community growth. Commercialization, Efficiency Improvement, Margin Expansion, and Loft Category. Let's review these achievements in more detail. To begin with, we exist for a year with over 100 million DAUs, 336 million MAUs, and other healthy community metrics across the board. Daily user time spent remained robust at over 95 minutes on average in the fourth quarter.

Xin Fan: Thank you Juliet and thank you everyone for participating in our trials at industry conference call to discuss our financial and operating results.

Xin Fan: I am pleased to deliver today's opening remarks on behalf of Mr. Chen.

Fan: In 2023, we navigated a landscape of challenges and the opportunities and achieved a number of important milestones out of community growth commercialization. If it is the improvement margin expansion and loft Kathy.

Fan: Let's review these achievements in more detail.

To begin we've we give it the year with over 100 million to use 336 million and they use and other healthy commodity matrix across the board.

Daily user time spend remained robust at over $95 million on average in the fourth quarter.

Xin Fan: We continue to emphasize and dedicate resources to reinforce our content ecosystem, support our creators, and foster an inspiring community. In 2023, over 3 million content creators earned income on our platform, up 30% over a year. Further enabling talented content creators to expand their fan base and make money will be one of our most important tasks for 2024. Another highlight for the year was our progress in improving our commercialization efficiency. We stepped up our efforts to incorporate advertising and advanced business in a way that is native to our content ecosystem. Driven by strong performance-based ads, our ad revenue grew by 28% in the fourth quarter and 27% for the full year. Sponsored ADR Class Z, With this growth, our total revenues for the full year came in at RMB 22.5 billion, of which our revenue made a higher contribution, rising from 23% in 2022 to 28% in 2023. Increasing the revenue contribution from our high-margin advertising business and effective cost For the full year, our gross profit grew by 41%, and our gross profit margin increased to 24.2% from 17.6% in 2022. Consequently, we significantly narrowed our adjusted net loss by 58% year-over-year in the fourth quarter and by 49% for the full year.

Fan: We continue to emphasize and to dedicate resources to reinforce our content ecosystem.

Fan: Support our equator and foster an inspiring community.

Fan: 2023 over 3 million kind of equate to us and the income on our platform up 30% year over year.

Fan: Further elaborating talented colleague Cui tourists to expand their fan base and then make money will be one of our most important targets for 2024.

Fan: Another highlight for the year was our progress in improving our commercialization efficiency.

Fan: We stepped up our efforts to incorporate advertising and the vast bend is in a way that native to our content ecosystem.

Fan: Driven by strong performance based ads, our AD revenue grew by 28% in the fourth quarter and 27% for the full year.

Fan: Vas revenues grew by 22% in the fourth quarter and 14% for the full year on year over year basis.

Fan: With this growth our total revenues for the full year kept me at RMB 22, 5 billion, among which added revenue made a higher contribution rising from 23% in 2022% to 28% in 2023.

Fan: Increased revenue contribution from high margin advertising business and effective cost controls drove our gross profit up by 43% year over year and our gross profit margin reached 26, 1% in the fourth quarter, marking the sixth consecutive quarter of margin improvement.

Fan: For the full year, our gross profit grew by 41%.

Fan: Our gross profit margin increased to 24, 2% from 17, 6% in 2020 to.

Consequently, we significantly narrowed our adjusted net loss by 58% year over year in the fourth quarter and by 49% for the full year.

Xin Fan: Notably, we generated RMB640 million in positive operating cash flow in the fourth quarter, and our full year operating cash flow also turned positive in 2023. These gains place us on solid footing to reach our probability growth targets. 2023 has shown the effectiveness of our strategy and provided a solid foundation for our success in 2024. As we approach the possibility, we are keeping our fundamental goal in mind, to create value for our users. We do this by expanding our content offering, supporting our creators, and fostering a vibrant and growing community that people love. Our industry is still benefiting from the wave of visualization with the fast-evolving generative AI as its tailwind.

Fan: Notably, we generated RMB $640 million in positive operating cash flow in the fourth quarter and our full year operating cash flow also turned positive in 2023. These gas place as a solid footing to reach our profitability grow.

Fan: 2023 as shown the effectiveness of our strategy as it provided a solid foundation for our success in 2024.

Fan: As we approach profitability, we are keeping our fundamental goal in mind to create value for our users. We do this by extending our content offerings supporting our equator, and fostering evaporate and growing community that people love.

Fan: Our industry is still benefiting from the wave of visualization with <unk> involving generator of AI and <unk>.

Xin Fan: This leaves us with a long runway for growth. We remain confident that our virtuous growth cycle of user expansion and commercial capabilities will create increasing value for our users, creators, and shareholders. With that overview, I'd like to discuss our core pillars of content, community, and commercialization in more detail. Beginning with content and community, an ever-growing content ecosystem is vital for our community's health and vibrancy. Daily active content creators grew by 16%, and the monthly new content submission rose by 31% both year over year. And we continue to facilitate connections between high quality content and creators with fans. Conquered with over 10,000 followers while up 30% year-over-year in the fourth quarter. In January 2024, we honored the top 100 content creators at our 6th annual Bilibili Power Up 2023 awards ceremony to recognize their creations and contributions to our community. Among them, 39 content creators received the award for the first time.

Fan: This leaves us with a long runway for growth.

Fan: We remain confident that our virtuous growth cycle of yield expansion in the commercial capabilities will create increased value for our users creators and a shareholder.

Fan: With that overview I'd like to discuss our core pillars of content community and commercialization in more detail.

Fan: Beginning with content and community.

Fan: And ever growing content ecosystem is vital for our communities health and the <unk>.

For the fourth quarter daily active content creators grow by 16% and mostly new content submission rose by 31% both year over year.

Fan: As we continue to facilitate connections between high quality content and equated with FES colliquative with over 10000 followers, while up 30% year over year in the fourth quarter.

Fan: In January 2024, we on top of 100, calling equate with our six and your PT PD power arbitrarily 23, our wassa and money to recognize their equation and the contributions to our community.

Fan: Among which 39 Colliquative received the award for the first time.

Xin Fan: These top 100 content creators excelled on our platform, successfully accumulating a total of over 400 million followers, with a thriving content ecosystem. Bilibili has become a favorite platform across different age groups and genders. In the fourth quarter, the average age of our active user base was 24.

Fan: These top 100 content creators and failed on our platform.

Fan: Hopefully accumulating a total of over 400 million followers.

Fan: With a thriving content ecosystem BD, Billy has become a favored platform across different age groups and the tenders.

Fan: In the fourth quarter, the average age of our active user base was 24.

Xin Fan: As our existing users gradually mature, their interest in and consumption increases; in 2023, Baby and Maternity, Automotive, Traveling, Fashion, and Clothing categories demonstrated the highest growth in video. Each of these categories carry significant commercial value. The boundary between interest-based and commercial content has also been broken.

Fan: As our existing users glad you actually mature the interest involved and consumption increases.

Fan: In 2023, baby and maternity automotive traveling fashion and clothing categories demonstrated the highest growth in the video views.

Each of these categories carries significant commercial value.

Fan: The boundary between interest paid and commercial content has also Bert.

Xin Fan: In 2023, the number of commercially related content with over 1 million video views more than doubled year over year. Meanwhile, over 3 million content creators made money through our various channels in 2023, among which the number of content creators who earned income via video and live commerce was up 133% year over year. With more content creators and a better content ecosystem, our users remain highly engaged, and the community continues to thrive. For the full year 2023, our average daily video views increased by 25% over a year to 4.3 billion. Our users spent 97 minutes daily on the platform during the same period. Monthly average injections will also grow by 14% year-over-year to over 15 billion in 2023. By the end of 2023, we had 230 million official members, 18% more than in the prior year, and their 12-month retention rate remains strong at around 80%. Additionally, we closed the year with our 5th New Year's Eve Gala, the most beautiful night of 2023, emerging as a youth must-watch online New Year's celebration.

Fan: In 2023, the number of commercial related content with over 1 million video views more than doubled year over year.

Fan: Meanwhile, over 3 million content creators made Monday through our various channels in 2023, among which the number of content creators, who and income of our video commerce was up 133% year over year.

Fan: With more content creators and a better content ecosystem. Our users remained a highly engaged and the community continue to thrive.

Fan: For the full year 2023, our average daily video views increased by 25% year over year to $4 3 billion.

Fan: Our users spent 97 minutes daily on our platform during the same period.

Fan: The average index shows also grow by 14% year over year to over $15 billion in 2023.

Fan: By the end of 2023, we had 230 million official members, 18% more than in the prior year and the 12 month retention rate remains strong at around 80%.

Fan: Additionally, we closed the year with our fifth New year's Eve Gala. The most beautiful night after 2023 emerging at the used must watch online new year celebration.

Xin Fan: The event garnered a hundred million playbacks within 24 hours and received the most industry-sponsored participation ever in its history. Lastly, I'd like to talk about commercialization and the dive into each of our business lines. Our surviving interactive community is the cornerstone of our commercialization model. In the fourth quarter, our best revenue was up 22% year-over-year to RMB 2.9 billion and up 14% to RMB 9.9 billion for the full

Fan: The event gone the other 100 million playback within 24 hours and they received the most industrial sponsor participation ever in <unk> history.

Fan: Lastly, I'd like to talk about commercialization and dive into each of our business lives.

Fan: Our surviving interactive community.

Fan: The cornerstone of our commercialization model in the fourth quarter, our vast revenue were up 22% year over year to RMB, two 9 billion and up 14% to RMB nine 9 billion for the full year.

Xin Fan: These increases were primarily driven by robust growth in our live broadcasting revenue. Our live broadcasting universe continues to be more diverse as we attract more host talent from our video content creator pool. In 2024, we will continue to integrate live broadcasting into our video ecosystem by introducing more high-quality hosts and enhancing various tools and the recommendation algorithm. We aim to attract more paying users on our platform. At the same time, our featured live broadcasting content and products, like VTubers and their celebrations, will continue to elevate payment activities and offer more monetization opportunities for us in terms of membership. By the end of 2023, we will have 21.9 million primary members.

Fan: These increases were primarily driven by robust growth in our LIBOR casting revenues.

Fan: Our LIBOR cutting universe continue to be more diverse as we convert more host talent for our video content creator pool.

Fan: 124, where well continue to integrate <unk> into our video ecosystem.

Fan: By introducing more high quality host and enhancing <unk> twos, and then recommendation algorithms, we attitude Calvert more paying users our platform.

Fan: At the same time, our featured a LIBOR cutting content and products like V to birth and celebration system, well continue to elevate the payment activities and offer more monetization opportunity for us.

Fan: In terms of membership.

Fan: By the end of 2023, we had 21 9 million premium members.

Xin Fan: Our members continue to demonstrate high granularity and trust, with over 80% subscribing to annual or auto-renewal packages. Additionally, users continue to exert increasing spending power on other featured products and experiences. Turning to our advertising business, we made some exciting progress. In 2023, our total advertising revenues increased by 28% to RMB 1.9 billion for the fourth quarter and were up by 27% to RMB 6.4 billion for the full year, both on a year-over-year basis.

Fan: Our members continue to demonstrate high brand royalty and trust.

Fan: With over 80%.

Fan: <unk> annual auto renew packages.

Fan: Additionally, users continue to exert increasing spending power or other feature of the products and experiences.

Fan: Turning to our while the title business, we made some exciting progress.

Fan: In 2023, our total advertising revenues increased by 28% to RMB, one 9 billion for the fourth quarter and were up by 27% to RMB six 4 billion for the full year, both on year over year basis.

Xin Fan: Robust revenue growth in our performance-based ads was the most significant contributor, including over 60% year-over-year for the quarter and over 50% for the full year. We also achieved positive young year growth in brand and native ad revenues throughout the year. We credit our solid revenue growth to our unique position as the most densely populated community of the young generation and our ability to connect with them in their own language. In the meantime, we continue to enhance our ad infrastructure, including product optimization and algorithm improvement. And this enables advertisers not only to improve their brand equity and influence user purchasing decisions but also to directly convert sales on Bilibili. In the fourth quarter, our top five advertising verticals were games, e-commerce, digital products, home appliances, automotive, and skincare and cosmetics.

Fan: Robust revenue growth in our performance based AD was the most significant contributor increasing over 60% year over year for the quarter and over 50% for the full year.

Fan: We also achieved positive year on year growth in brand and a native AD revenues throughout the year.

Fan: We credit our solid at a revenue growth to our unique position at the multi densely populated community of the young generation.

Fan: And our ability to connect with them in their own language.

Fan: In the meantime, we continue to enhance our AD infrastructure, including product optimization and <unk> improvement.

Fan: This enables advertisers not only to improve their brand equity and influence user projects into the issues, but also direct converse sales on beauty beauty in the fourth quarter, our top five of tightly verticals will again.

Fan: Commerce digital products and home appliance automotive and skincare and cosmetics.

Xin Fan: Among these verticals, the e-commerce and game sectors stood out with impressive results. Over the course of 2023, we will deepen our collaboration with e-commerce advertisers. We further integrated direct sales conversion tools into our video and live commerce ad products. This enabled our users to seamlessly transition from viewing content to making relevant purchases, enhancing our ad conversion efficiency and the user experience. Meanwhile, our deeper data collaboration with key e-commerce platforms further improves the accuracy and efficiency of our ad recommendation algorithm.

Fan: Among these verticals the e-commerce and <unk> sectors stood out with impressive results.

Fan: Over the course of 2023, we deepen our collaboration with E Commerce advertisers.

Fan: We further integrated direct sales conversion twos in 12, we do a live commerce ad products.

Fan: This enabled our users to seamlessly transition from Julian content to make it relevant protest.

Fan: Hansen, our AD conversion efficiency and the user experience.

Fan: Meanwhile, our deeper data collaboration with key e-commerce platforms further improved accuracy and efficiency of our AD recommendation algorithms.

Xin Fan: In 2023, the number of users engaging in consumption-related behaviors increased by over 200% over a year. Meanwhile, we successfully gained more marketing budget from key game developers during the fourth quarter, as they launched new games and promoted existing game updates. We maintained our position as an effective channel to convert gamers and a must-invest in community to build game IP, thanks to our integrated advertising strategy and the extensive resources within our gaming ecosystem. But we are encouraged by the progress we made in our uptight business in 2023.

Fan: In 2023, the number of users engaging in consumption related behaviors increased by over 200% year over year. Meanwhile, we successfully again more marketing budgets from <unk> during the fourth quarter.

Fan: The launch new games and the promoter the existing game updates.

Fan: We maintained our position as an effective channel to covered camber and the Mustang are asking community to build game IP.

Fan: Two our integrated advertising strategy.

Fan: Extensive resources within our gaming ecosystem.

Fan: While we are encouraged by the progress we made in our advertising business. In 2023, we believe they are still great potential and ample room for growth.

Xin Fan: We believe there is still great potential and ample room for growth. In 2024, we will further integrate ads with our content ecosystem in a more native, natural, and seamless way; we will prioritize our resources to improve ad infrastructure, including upgrading and refining our ad products for the purpose of optimizing the accuracy and efficiency of ad aggregation. We will also actively explore generative AI for ad material creation, supporting productivity for advertisers. Industry-wise, we'll continue to expand our shares in our leading GAMs and e-commerce sectors and gain more presence in digital products and home appliances. Skin Care and Cosmetics, and Automotive.

Fan: Therefore, we will further integrate ads with our content ecosystem in a more native natural in a seamless way.

Fan: El Pilar at highest our resources to improve at <unk>.

Fan: Cost structure, including upgrading and refining our AD products further optimizing the accuracy and efficiency of our decorators.

Fan: We will also actively explore and a ratio of AI for add material real quite <unk>, So program productivity for advertisers.

Fan: Industry wise.

Fan: We'll continue to expand our shares are leading games and e-commerce sectors.

Fan: And Tim more presence in digital products and home appliance skincare and cosmetics and the automotive verticals.

Xin Fan: Turning to our campaign. Total game revenues increased 2% quarter over quarter to RMB 1 billion in the fourth quarter, coming in at RMB4 billion for the full year. Currently, three titles in our pipeline have been approved for release in the domestic market in the coming quarter. When the Japanese come again, have them bring their raps.

Fan: Turning to our camp and its Todd.

Fan: It'll game revenues increased 2% quarter over quarter to RMB 1 billion in the fourth quarter coming in at RMB 4 billion for the full year.

Fan: Currently three titles in our pipeline.

Fan: Approved for relief in the domestic market in the coming quarters.

Fan: When companies Kotkin Havent burned rack.

Xin Fan: Zhiyan Tianqiong, One domestic SLG game, San Guo, Mou Jing Tian Xia, and other domestic card games, Artifactors, Wu Hua Ni Xin. In addition, we are able to create value for our broader game partners by increasing integrating our advertising products with our game distribution capability. As for self-development games, we stimulate our resources and adopt a more selective game development strategy in 2023. The refined strategy will enable us to reduce our R&D expenses in 2024, while keeping us lean and focused on top quality projects. Looking forward, our priorities in 2024 are consistent with those in 2023.

Fan: The essential.

Fan: One domestic S. L. G can suncor molecule change out and the other domestic card game audio factor.

Fan: <unk> Yeah edition, we are able to create value for our broader cam partners by increasing integrating our advertising products with our cash distribution capability.

Fan: I'll fall of self development game with stimuli, our resources and adapt our more selective given development strategy in 2023.

Fan: The refined the strategy will enable us to reduce our R&D expenses in 2020 for like keeping us D and the forecast on top quality projects.

Fan: Looking forward our priorities in 2024 are consistent with 2023.

Xin Fan: We will further improve our commercialization capabilities by strengthening our technology infrastructure and improving our product offerings, particularly for our advertising and live broadcasting bands. Company-wide, we aim to further improve our operational efficiency with a tight and targeted expense structure. Overall, we are dedicated to developing a content ecosystem to enable our content creators to earn more money and further expanding our user base. We believe these endeavors will lead us to reach our goal of possibility and set the stage for sustainable growth for many years ahead. This concludes Mr. Chen's remarks.

Fan: We will further improve our commercialization capabilities by stressing our technology infrastructure and improving our product offerings, particularly for our advertising and LIBOR cutting business.

Fan: Companywide, we aim to further improve our operation efficiency with a tight and the targeted expense structure.

Fan: All we are dedicated to developing content ecosystem.

Fan: Liberating our content creators to earn more money and further expanding our user base. We believe these endeavors will lead us to reach our goal of profitability and set the stage for sustainable growth for many years ahead.

Fan: This concludes Mr. Chen's remarks, our now provide a brief overview of our financial results for the fourth quarter of 2023.

Xin Fan: I will now provide a brief overview of our financial results for the fourth quarter of 2023. In the interest of time, on today's call, I will be reviewing our fourth quarter highlights as Mr. Chen's remarks have touched on our full year results at a high level. We encourage you to refer to our press release issued earlier today for a closer look at our full-year results. Throughout 2023, our financial profile improved significantly alongside our community growth and ecosystem expansion. Of particular importance are the gains we made in our revenues, gross profit, and the reduction in adjusted net loss, which we narrowed for the fifth consecutive quarter. Total net revenues for the fourth quarter were RMB 6.3 billion, up 3% over year.

Speaker Change: In the interest of time on today's call I will be reviewing our fourth quarter highlights as Mr. Chen's remarks has touched on our full year results at a high level.

Speaker Change: We encourage you to refer to our press release issued earlier today for a closer look at our full year results.

Speaker Change: Throughout 2033, our financial profile improved significantly alongside our committed growth and ecosystem expansion.

Speaker Change: Of particular importance and again, we made in our revenues gross profit and the reduction in adjusted net loss, which we narrowed for the fifth consecutive quarter.

Speaker Change: Total net revenues for the fourth quarter was RMB, six 3 billion up 3% year over year.

Xin Fan: Our total net revenues breakdown by the revenue team for the fourth quarter was approximately 45% VAT, 30% of tithing, 16% mobile games, and 9% for IP directives and others. Our cost of revenues decreased by 4% year-over-year to RMB4.7 billion in the fourth quarter, driving our gross profit to RMB 1.7 billion, a 33% year-over-year increase. Our gross profit margin exceeded 26% in the fourth quarter, up from We expect our gross profit margin to continue to improve in 2024. Our total operating expenses were down 17% year-over-year to RMB 3 billion in the fourth quarter. We cut our sales and marketing expenses by 11% year over year to RMB 1.1 billion. Sales and marketing expenses accounted for 18% of total revenue, compared with 21% in the same period last year. G&A expenses were RMB 512 million, down 37% year-over-year.

Our total net revenues breakdown by the revenues team for the fourth quarter was a push of Italy, 45% that 30% of tiding, 16% mobile games, and 9% of our IP Terra chips and other businesses.

Speaker Change: Our cost of revenues decreased by 4% year over year to RMB, four 7 billion in the fourth quarter.

Speaker Change: Driving our gross profit to RMB, one 7 billion up 33% year over year, our gross profit margin exceeds 26% in the fourth quarter up from 30% in the same period last year.

Speaker Change: We expect our gross profit margin to continue to improve in 2024.

Speaker Change: Our total operating expenses were down 17% year over year to RMB 3 billion in the fourth quarter.

Speaker Change: We cut our sales and marketing expenses by 11% year over year to RMB, one 1 billion sales.

Speaker Change: Sales and marketing expenses was 18% of total revenues compared with 21% in the same period last year.

Speaker Change: G&A expenses was RMB 500, and the $12 million.

Speaker Change: 37% year over year.

Xin Fan: R&D expenses were RMB 1.3 billion, down 11% year-over-year. As a result, we narrowed our adjusted operating loss and adjusted net loss by 53% and 58% year-over-year in the fourth quarter. Our adjusted net loss ratio for the first quarter was 9%, improving from 21% for the same period a year ago. Notably, for the fourth quarter, we also generated RMB 640 million positive operating cash flow. This demonstrates that our business is entering a healthy path for sustainable development. We expect to reach positive net gap operating profit in Q3 2024 through our sustained top-line growth and growth margin improvement. As of December 31, 2023, we had cash and cash equivalents, time deposits, and short-term investments of RMB 15 billion, or 2.1 billion U.S. dollars. Additionally, as of December 31, 2023, the aggregate outstanding principal amount of our convertible bonds was US$862 million.

Speaker Change: <unk> expenses were RMB, one 3 billion down 11% year over year.

Speaker Change: As a result, we narrowed our adjusted operating loss and adjusted net loss by 53% and 58% year over year in the first quarter respectively.

Speaker Change: Our adjusted net loss ratio for the fourth quarter was 9% improving from 21% for the same period a year ago.

Speaker Change: Notably for the fourth quarter, we also generated RMB 640 million positive operating cash flow demonstrating.

Speaker Change: Demonstrating that our business is entering a healthy path for success. Both development, we expect to reach positive non-GAAP operating profit in Q3 2024 through our SUS tend to topline growth and the gross margin improvement.

Speaker Change: As of December 31, 2023, we had cash and cash equivalents.

Speaker Change: Posits and short term investments of RMB 15 bidding.

Speaker Change: Our two plus 1 billion U S dollar.

Speaker Change: As of December 31, 2023, the aggregate outstanding principal amount of our comfortable bonds was $852 million.

Speaker Change: We believe our cash position is sufficient to cover off our remaining cover the power.

Unknown Attendee: We believe our cash position is sufficient to cover all of our remaining capital bonds. Thank you for your attention. We would now like to open the call to your questions. Operator, please go ahead. Thank you. We will now begin the question and answer session. To ask a question on the phone, please press star 11 and wait for a name to be announced. If you'd like to cancel your request, you can press star 11 again.

Speaker Change: Thank you for your attention we would now like to open the call to your questions.

Peter: Peter Please go ahead.

Peter: Thank you we will now begin the question and answer session.

To ask a question on the phone. Please press star one one and wait for a name to be announced.

Speaker Change: If you'd like to cancel your request you can press star one again.

Peter: For the benefit of all participants on today's call. If you wish to ask your questions to management in Chinese. Please immediately repeat your question in English the company will provide consecutive interpretation for management statements during the Q&A session.

Unknown Attendee: For the benefit of all participants on today's call, if you wish to ask your questions to management in Chinese, please immediately repeat your question in English. The company will provide consecutive interpretations for management statements during the Q&A session. Please note that English interpretation is for convenience purposes only. In the case of any discrepancy, management's statements in their original language will prevail.

Peter: Let me start that English interpretation is for convenience.

Peter: So suddenly.

Peter: And in the case of any discrepancy management's statements, India all original language will prevail.

Peter: Please limit your questions to one at a time if you wish to have a follow up question briefly joined the queue.

Peter: One moment for the first question.

Peter: Our first question comes from Thomas Chong of Jefferies. Please ask your question.

Unknown Attendee: Please submit your questions one at a time. If you wish to have a follow-up question, please rejoin the queue. One moment for the first question.

Thomas Chong: But anytime you guys how would you rank.

Thomas Chong: What is hopefully it builds on this album.

Thomas Chong: Our first question comes from Thomas Chong of Jefferies. Please ask your question. Good evening.

At that time.

Thomas Chong: Some of the functionality.

Thomas Chong: Hi, Good evening, Thanks management bucket King My question. My question is about our Chinese tennis ball outlook can management share about your thoughts and strategies on our product offerings and commercialization. Thank you.

Thomas Chong: Thank you, Management, for accepting my question. Can you share with us your thoughts and strategies on product offerings, user growth, and commercialization in 2024? Hi, good evening.

Speaker Change: Uh huh.

Speaker Change: Well just talk without the the one he just said Knowhow Cynthia <unk>, who is on the R&R R&R Sanya woman that suits your lasagna, Bob I'm going to touch it all up with what the teams.

Xin Fan: Thanks, Management, for taking my question. My question is about our 2024 outlook. Can Management share your thoughts and strategies on our product offerings, user growth, and commercialization? Thank you.

Speaker Change: Before I answer the question for 2020 core I would like to take a moment to review our work done in 2023, which we have made some progress in both community development and commercialization.

Speaker Change: Again also on the T Ao two Carla neither at Agua since you have a solid future.

Xin Fan: Before answering this question, I would like to briefly review our work in 2023. In 2023, we made good progress in terms of community and commercialization. Before I answer the question for 2024, I would like to take a moment to review our work done in 2023, which we have made decent progress on both community development and commercialization. DAU, First of all, our DAU has broken the 100 million mark and achieved continuous health growth in the community.

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Speaker Change: So first of all our MTA you surpassed 100 million demonstrating our continued healthy development of our economy. Secondly is our advertising started to accelerate.

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Speaker Change: 27% year over year growth.

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Speaker Change: Tonya Chin, yes, that's inclusive.

Speaker Change: So that the partners so to Joe RJ, Susanna Gilenya until I'm, telling the teens and email.

Speaker Change: Gross profit margin continued to increase over the past six quarters, reaching 26% in the fourth quarter up six percentage points year over year, and our adjusted net loss narrowed by almost half 49% year over year for the full year of 2023.

Xin Fan: Sponsored ADR Class Z: So first of all, our DAU surpassed 100 million, demonstrating our continuous healthy development of our community. Secondly, as our advertising started to accelerate, achieved a 27% year-over-year growth, and this March, even among our peers should be one of the highest advertising revenue growth. Our gross profit has been steadily increasing over the past six quarters. In Q4, our profit rate hit 26%, and it rose 6 points year-to-year. Our total losses in 2023 fat were reduced by 49%, and we achieved a steady trend of net net profit. Our gross profit margin continued to increase over the past six quarters, reaching 26% in the fourth quarter, up six percentage points year-over-year. And our adjusted net loss narrowed by almost half, 49% year-over-year, for the full year of 2023.

Speaker Change: Notably we've also achieved positive operating cash flow for the full year, well known to the Sarnia, though you go put them out to all of them in the summertime in Mexico.

Speaker Change: That's okay.

Speaker Change: Although the total EBA Saturday as well Mr Wei <unk>.

Speaker Change: Some of the optical your whole conchology bassanio, so E cigarettes yesterday, so called Google and then there was another one.

Speaker Change: Actually we are very delighted to see that our company.

Speaker Change: I mean, maybe ecosystem has become more aligned with our commercial value.

Speaker Change: The commercial effort does not hurt our community development in contrary how.

Speaker Change: Our company content tends to be even stronger in 2023 over $3 million of content creator earned income.

Speaker Change: This is reinforcing.

Speaker Change: The development of our content creator.

Speaker Change: We are devoting mantle aboard bulk orders totaled up to.

Speaker Change: She answered how worried are you about Boston lager.

Speaker Change: Golf quarter solar with Apple that fear that some strategic partners about.

Xin Fan: And notably, we've also achieved positive operating cash flow for the full year. The growth of our business not only did not affect our ecology but also brought more motivation to our ecology. In 2023, we created a business profit of more than 3 million upvotes, which actually strengthened our ecological stability. We're very delighted to see that our community, our community ecosystem, has become more aligned with our commercial value. The commercial efforts do not hurt our community development, but on the contrary, it's helping our community content ecosystem to be even stronger. In 2033, over 3 million content creators earned income on Bilibili. This is reinforcing the development of our content. Sponsored ADR Class Z, and also over 1.8 million creators earn income on Bilibili through our live broadcasting services. And the number of creators earn income via advertising, almost double your income. In 2024, the direction of our work will be the same as in 2023. The most important thing for us is two things.

Speaker Change: And.

Speaker Change: Also over one 8 million creators earn income and be able to believe through our live broadcasting services and a number of creator earn income.

Speaker Change: Sure.

Advertising services almost doubled.

Speaker Change: Here.

Speaker Change: So on our senior notes.

Speaker Change: Going forward, our funds held for art, Danielle Cushy insurer.

Speaker Change: And pleasingly all the gondola.

Speaker Change: Dave and I, just assume you can leave the mobile one which just means that houses at Sarnia Honolulu.

Speaker Change: He is one of the genes.

Speaker Change: Jim do you all have already.

Speaker Change: Well.

Speaker Change: Well Neal singing already are.

Speaker Change: So with that Leland.

Speaker Change: Accordingly.

Speaker Change: Looking ahead into 2024, our focus remains consistent with 2023 with two main task.

Speaker Change: First of all as focus on our profitability will continue to strengthen our commercial capabilities.

Speaker Change: And improve our commercialization efficiency.

Speaker Change: At the same time to improve our gross margin and manage our cost.

Speaker Change: Back.

Speaker Change: To achieve non-GAAP operating profit.

Speaker Change: Note that operating profit will turn positive in Q3 'twenty from Macquarie.

Speaker Change: Dr. Vanessa woman quit that ultimately can lead to tissue.

Speaker Change: And then also on how the Kim how project sure about what my thoughts from you on the corporate relationship.

Speaker Change: While.

Speaker Change: Keeping our financial goal intact, we'll continue to strengthen our content ecosystem.

Xin Fan: The first is to achieve the goal of profit. We will continue to strengthen our commercialization ability and then continue to improve our operating efficiency. Sponsored ADR Class Z. Looking ahead into 2024, our focus remains consistent with 2023 with two main tasks. First of all, let's focus on our profitability.

Speaker Change: Expanding our content right Smith, and fostering very specific content categories.

Speaker Change: Sure the mindset of dividend being the go to place for highest quality content.

Speaker Change: Danielle will more quickly.

Speaker Change: <unk>, obviously with the five year weighted to the T cell in China, where it goes.

Xin Fan: We'll continue to strengthen our commercial capabilities and improve our commercialization efficiency, at the same time as improving our growth margin and managing our costs. We expect to achieve non-GAAP operating profit will turn positive in Q3 2020. Sponsored ADR Class Z, while keeping our financial goal intact, we will continue to strengthen our content ecosystem by expanding our content richness and fostering very specific content categories to ensure the mindset of Bilibili being the go-to place for the highest quality content. This year, we will pay more attention to the development and activity improvement of high-quality app owners and provide more smooth transformation channels for high-quality app owners. And in 2024, we'll focus on discovering top content creators in development and supporting them to make more money. We will continue to consolidate the advantages of ACG, digital, and knowledge. At the same time, we will add value to more newly developed categories, such as mother-child, parent-child, emotional, travel, car, home, and decoration.

Speaker Change: Your job Little Qi Lu with Honda.

Speaker Change: <unk>.

Speaker Change: And in 2024, well focus on discovering top content creator development and supporting them to make more money.

Speaker Change: And then they've always done which is you can call them that ACG.

Speaker Change: <unk> tissue to Richard Kim Yo Yo Yo should accumulate Thunder.

Speaker Change: Close enough.

Speaker Change: Oh wait.

Speaker Change: Second daughter symptoms out that's in there.

Speaker Change: I'll tell you what should it be room, where you can.

Speaker Change: Shouldn't that choosing Cisco jazzy tranche order here.

Speaker Change: In terms of content categories will continue to solid by our existing advantages.

Speaker Change: ACG game on tack knowledge and other categories, while providing more support and assistance to new category that has brought in response to changed users change as consumption demand such as baby and maternity travel automotive and.

Speaker Change: That correction.

Speaker Change: Michelle.

Speaker Change: These ascertainment mizuho, well necessarily see Shanghai lasagna questions, how long ago, some of them you've got a failure.

Xin Fan: In terms of content, categories will continue to solidify our existing advantages in ACG, gaming, tech, knowledge, and other categories while providing more support and assistance to new categories that have grown in response to users' changing consumption demands, such as baby and maternity, travel, automotive, and home decoration. We believe with this effort, and after achieving profitability, we will further enhance the virtuous cycle of our community ecosystem to ensure sustainable growth in both our community and our profitability. Transcribed by https://otter.ai. Thank you. Thank you for the questions. Our next question comes from Yiwen Zhang from China Renaissance. Please ask your question. Thank you for listening to my questions.

Speaker Change: You'll leave your whaler 400 out there.

Speaker Change: I believe with this effort and after achieving profitability.

Speaker Change: Further achievement.

Speaker Change: Enhance the virtuous cycle of our community ecosystem.

Speaker Change: To ensure sustainable growth.

Speaker Change: Are both community and our profitability.

Okay.

Speaker Change: Thank you for the questions.

Speaker Change: Our next question is coming from Ivan Cheung from China Renaissance. Please ask your question.

Speaker Change: Sure.

Ivan Cheung: And you don't want a pure what I want to just go ahead, so I'm Gonna go last year.

Ivan Cheung: Conversely to what Michel and Austin Nervosity. It we're trying to you Scott.

Ivan Cheung: So do you.

Ivan Cheung: Hello, Paul Cornell Hollywood ship, all pushed out to support our Io.

Ivan Cheung: I know, it's hard to say hey, what is it.

Ivan Cheung: Well you got that one sure. So thanks for taking my question My question here Rick.

Yiwen Zhang: My question is about our VAS business. Can you tell us about your overall strategy for the development of our VAS business over the next 20 years and all the related services, including live streaming, meeting rooms, and other activities? Thank you.

Scott: So can you give us update on white milk development strategy for this business segment in 2004.

Scott: And if not I am quoting that part of <unk> premium membership.

Scott: Better service.

Scott: Sure.

Yiwen Zhang: So that's my question. My question is regarding our value-added service. So can you give us an update on our development strategy for this business segment in 2024, and including this business model, including live broadcasting, premium membership, and other value-added services? Thank you.

Scott: Okay.

Scott: These guys how many open do you answer the later on Johan do we go to the Congress.

Scott: Uh huh.

Scott: Vanilla Yehuda <unk> comes through the hottest either your coolio Tonioli forgot that you can still achieve so he put in Doha, Qatar.

Scott: You'll recall part.

Uhm issue.

Scott: And then you wait to issue an arbitrage play.

Scott: On visibility, we have gathered a massive amount of high quality content creator almost also welcoming Hong for diverse access our users feel a strong sense of belonging to rebuild all of this combined results.

Xin Fan: Bilibili has a lot of high-quality content, a lot of high-quality creators, and it embraces a lot of users' interests. At the same time, it is also a community where users have a strong sense of belonging. These features make users willing to pay for their favorite content, and willing to pay for their favorite apps. On Bilibili, we have gathered a massive amount of high quality content creators, and it's also a welcoming home for diverse interests. Our users feel a strong sense of belonging on Bilibili. All of this combined results, and users are very much willing to spend for content that they like, and spend for content creators that they adore. Sponsored ADR Class Z, and users are very much willing to spend for content that they like, spend for content that they adore. At the same time, after the user gets the content or the personal reward, he will be recognized by the fans.

Scott: N user very much willing to spend for content satellite spend for a content creator.

Scott: Sure.

Scott: Hi.

Scott: We often say higher wages.

Speaker Change: Sure sure, though is here to say that he.

Speaker Change: Yes.

Speaker Change: Buena.

Speaker Change: But it shouldn't be that you'll see it'll keep forgetting the yugo Shire Moshe.

Speaker Change: So you'll go with Hudson City Who'll cover TMT.

Speaker Change: You might help with pricing.

Speaker Change: So the hot.

Speaker Change: A bottle with hot not all of US here, who wait had another order for example weight Topcoder CAGR to the desert challenge I'm going to touch users.

Speaker Change: You pay for it so it doesn't it's.

Speaker Change: The chapter that Akshay, the hydro solar Albert I thought you said sure Toyota Yoga thought leader.

Speaker Change: It was all of them and then you got out of the top that Peter her mother either Cook.

Xin Fan: And this kind of income is more rewarding and motivating for the user. For example, our user bought a course on Bilibili; the income from the course is much higher than the income from the Bilibili advertisement. So this kind of promotion is a very positive and healthy proposition for the Bilibili community. On Bilibili, users pay for content and services that they love. It's a most natural business model for us. As people pay for the content and services they love, they are actually happy for that experience, and they feel good about that. As for content creators, when they earn income through this kind of service, they will have an even stronger sense of value and appreciation.

Speaker Change: You'll have a quote not all the solar panels on this a little bit harder.

Speaker Change: Got it that's going to do that quick often talk to her suites.

Speaker Change: Thank you.

Speaker Change: I'll answer that it may go forward.

Speaker Change: Pizza hut.

Speaker Change: You see the consumer the consumer economy with here.

Speaker Change: Bill the daily users pay for content and services that they love that's a more natural business model for us as people pay for the content and services they love they actually.

Speaker Change: They are happy to report that experience and they feel good about that experience as for our clients and create or when they are in the income through this kind of services they will habits, even stronger sense of value and appreciation for our content creators they have even more there will be.

Xin Fan: And for our content creators, they will be even more motivated to continue to create content on Bilibili. For example, if a content creator is earning more income on Bilibili through selling his proprietary premium classes, this money will represent a much greater sense of value over what he could have made in advertising. Based on the above reasons, we have developed a series of products and service projects that increase value. For example, live streaming, large memberships, comics, live dramas, paid classes, charging, etc. This series of services and product functions forms our WAAS income. Our WAAS income growth rate is quite healthy.

Speaker Change: But more motivated to continue to create content.

Speaker Change: Example, if our content creator.

Speaker Change: Yes.

Speaker Change: Earning more income on visibility to selling his proprietary.

Speaker Change: Classes.

Speaker Change: This money will represent a much more sense of that.

Speaker Change: Oliver.

Speaker Change: He had made in Albuquerque.

Speaker Change: So you sound very young children with Chi follow you see there.

Speaker Change: So there you go.

Speaker Change: When you go hunting gun, they don't sell mobile.

Speaker Change: Two more.

Speaker Change: Yeah.

What people thought so too.

Speaker Change: Hydro could harmful debt drawn down the Yahoo.

Speaker Change: So you see there the league table.

Speaker Change: I think the for Tommy Vornado towards all of them, there's a lot to show when we walk through solar whether it turns out I sure.

Xin Fan: In Q4, the growth rate was 22%. Based on that service model or the connection within our community, we have developed our value-added services combining live broadcasting, premium membership, comic audio drama, premium courses, fan charging, etc. And all of that is closely related to the current community and our content. In the fourth quarter, our overall fast revenue grew by 22% year over year. Among these services, I think the fastest-growing service is live streaming. Why?

Speaker Change:

Speaker Change: How's that for carbonate.

Speaker Change: As Don talked about Russia.

Based on that service model or the connection within our community. We have developed our value added services combining live broadcasting premium membership Comet audio drama premium course.

Speaker Change: <unk> charging.

Speaker Change: Et cetera, and all of that.

Speaker Change: Closely related to the client community and.

Speaker Change: Our content in the fourth quarter, our overall fast rapid yields grew by 22% year over year.

Speaker Change: So you see lots of those Eagle Ford and Yeah. Let me go your own way, we light Philadelphia, Shirley Philadelphia Inquirer.

Xin Fan: Because live streaming is a more common service that all uploaders can do. Last year, we had 1.8 million uploaders gain income through live streaming. Now, there are all kinds of uploaders. No matter what you do, you can have your own way of live streaming. Among all those services, we believe within that, live broadcasting probably has the biggest potential and could grow the fastest because we believe live broadcasting is more universal. Anyone could be a live broadcasting host.

Speaker Change: Clifford.

Speaker Change: Uh huh.

Speaker Change: What how can you go.

Speaker Change: Yeah, Linda Yugo Arbitron uncle Chipotle, you go towards the woman that Q&A, where you buy a parcel under article convertible holders are so.

Speaker Change: The opportunity we're not so sure.

Speaker Change: They're on the doorknob Youll consider truvada.

Speaker Change: Amman or that services my belief within the alkali brockhaus, St probably has the biggest potential and Ted grow the fastest because we believe by brockhaus is more universal anyone can be a live broadcasting huts last year $1 8 million.

Xin Fan: Last year, 1.8 million content creators earned income on Bilibili through live broadcasting, and this is a universal and very low entry barrier monetization model for all content creators. Although there is a live broadcast on all platforms, Bilibili's live broadcast is very unique. Why?

Speaker Change: Content creators earn income.

To live broadcasting and this is Tom.

Speaker Change: It's a universal and very low entry barrier monetization model for all content creators to search on the <unk>.

Speaker Change: Don't worry or border there you got to assemble that herpes damage of war hazard.

Xin Fan: Because it is closely related to our content ecology and our community atmosphere. Even though there are many platforms who do live broadcasting business, Bilibili's live broadcasting is still very, very unique. That is because, in terms of the content creators, slash hosts, as well as the content categories of our live broadcast, have very much similar offerings or murals to what we have in the PUGB community. Let me give you an example. When we think of live streaming, we often think of it as impulsive consumption, for example, like hormones, impulses, and so on.

Speaker Change: Could it with someone that you would have hoped that somehow <unk> then so if you're somewhere Carthaginian Angie.

Speaker Change: Even though there are many platform is doing live broadcasting business, but they've been billing fibrotic pattern.

Very very unique that is because in terms of the content creators are health as well as the content categories on our live broadcasting has very much similar.

Offerings are nevertheless, what we have in Puget be community.

Speaker Change: But he is about to hit a woman is starting to go in and talk with you. That's the board how almost the total was outside.

So it's a horrible.

Speaker Change: So they'll have Pisa eligible that you guys are we on that.

Speaker Change: Well then that's a fabulous untouched uses of funds.

Xin Fan: But Bilibili's live streaming is different. Most of our live streaming is actually the fans' long-term attention to the emotion of the uploader. Let me give you an example.

Speaker Change: Touch Hangzhou Guangzhou are the optimal they yugo Qingdao.

What do you believe that there's that R&R is done yet.

Women because the Baja all good things.

Xin Fan: In 2023, we will have more than 100,000 subscribers. Sponsored ADR Class Z, And a lot of our users continue to subscribe. So this is one of the important differences between us and other live broadcasters. I'll make an example here.

Speaker Change: So.

Speaker Change: I'm not sure I've got some rush order with us right now.

Because if someone public does this suggest that you're going to get.

Speaker Change: The whole team.

Speaker Change: Well I think we can work with Hutchison measure.

Speaker Change: If you think of it.

Speaker Change: Hydro, particularly those or what specifically is that there was a woman who are eager to get should holiday that you bought it either because it's one of the other two battery box.

Xin Fan: Um, well, many others might think why broadcasting is an impulse for whole hormone-driven payment. However, if you're looking at Bilibili's live broadcasting revenue component, close to one-third of our revenue is actually generated from a multi-subscription model called The Great Viagra. And for this particular payment, it's a reflection or representation of a fan's devotion and appreciation for a content creator over at least a month.

Speaker Change: I will make my example, here, while many others might think Oh.

Speaker Change: My broadcasting is the ankle or how hormone driven payment. However, if youre looking at is a belief my broadcasting Ralph any component.

Speaker Change: Close to one third of our revenue actually generate it from a monthly subscription model.

Speaker Change: Called the green, but yacht and.

Speaker Change: For this particular payment is a reflection a representation of our fans devotion and.

Speaker Change: And the appreciation for our content creator over at least a month.

Xin Fan: And many of our paid users are actually subscribing for several months ahead; their renewal rate is very high. This example distincts us from the traditional live broadcasting platform because the connection with our content creators, the host, and the user is quite unique in the lab. Our live streaming business is based on Bilibili's PUDC ecosystem. There were nearly 1 million streamers on Bilibili in Q4. Only a portion of these streams are from third-party companies.

Speaker Change: Many of our paid users are actually.

Speaker Change: Scribing for several months ahead there.

Speaker Change: The renewal rate is very high. This example distinct us from the.

Speaker Change: The traditional that broth housing platform, because the connection with our content creators.

Speaker Change: And we use there is quite unique.

Speaker Change: And last one.

Speaker Change: Well, Mr. Borja with the Chiefs, who high sure that <unk> got <unk> got somehow.

Speaker Change: Q3, you didn't get bad weather to board that Peter had met Highball Rheology, Andrew Butcher. Your both answered I believe it does have on a go.

Xin Fan: Most of them are actually from our own ecosystem, which is the uptrend of making videos on Bilibili. This is also a feature of Bilibili live streaming. Our live streaming content mostly comes from our community itself. Whether it's sustainability or cost, it's all advantageous. As for the content supplier, which is the host, if we look at the fourth quarter, nearly a million hosts were active on Bilibili, but only a small portion of them were from professional guilds.

Speaker Change: Coming to a bunch of high fertilizer and all that.

Speaker Change: There are some hydro for pizza hammertoe shipping this year.

Speaker Change: Oh, sorry, you, though hydro sensitivity should be tangible that you can put it to the woman that's for vornado.

Speaker Change: And I believe you opened the surgery, but just.

Speaker Change: Just how lunch refusing hydro talladega, but totally unusual.

As for the content supplier wishes the hubs that's the way I'm looking at the fourth quarter, we are a million habits, where active I'm deliberately only a small portion of them were from professional guilt. Most of them are actually native content creator farm RPE TV ecosystem and this.

Xin Fan: Most of them are actually native content creators from our PUGV ecosystem. And this also sets us apart from other traditional web broadcasting platforms because we are cultivating our own supply and demand within our PUGV ecosystem. In fact, it's the same in terms of category.

Speaker Change: Also sets us apart from other traditional broadcasting.

Speaker Change: Broadcasting platform is because now we're cultivating our own supply and demand within our <unk> ecosystem.

Speaker Change: So, yes, it's a real woman Bossier corridor.

Xin Fan: Our live broadcast has a lot of categories that have the characteristics and advantages of Bilibili. It has the same competitive advantage as our video platform. For example, we are in the virtual live broadcast area. We should be the strongest in China. Then, for example, we are in some directions of knowledge, such as legal live broadcast, and legal information live broadcast. This is not likely to be on other platforms.

Speaker Change: You'll be done political Yorkshire.

Speaker Change: Oh I'm sure the team new users.

Speaker Change: Two beautiful woman.

Speaker Change: Neutral body quite well because theyre going to English.

And that's also the Treehouse Arlington Hope your assortment that you see initially is really the triple polysilicon visible so that that should happen with azure, but economically.

Xin Fan: But it is very popular on Bilibili. Similarly, in terms of content categories, the content category in our PUGB ecosystem can also be our live broadcasting category. Especially the categories where Bilibili has our own unique advantage, such as virtual content creators, we are considered to be, if not the most leading platform in China, and also knowledge-based content, such as legal-related live broadcasting.

Speaker Change: Peter.

Speaker Change: Hello Timna.

Speaker Change: Similarly in terms of content categories, the content category in our <unk>.

Speaker Change: Assistant can also be our live broadcasting categories, especially the categories that we have.

Speaker Change: As our own unique advantage such as the virtual virtual content creators.

Speaker Change: We are considered to be if not the most leading platform in.

Speaker Change: China and also our knowledge based content such as legal related Black rock housing.

Xin Fan: It's hard to imagine this category to be a top vertical on other platforms, but it is very popular on Bilibili. Sponsored ADR Class Z: As for our priorities for the live broadcasting business in 2024, we'll be putting a lot of priorities in terms of the quality of our rapid, as known as the gross profit and gross profit margin of this business. We hope to achieve sustainable and high quality revenue growth in my broadcasting in 2020. Thank you.

Speaker Change: It's hard to imagine this category top vertical on other platforms, but it is very popular.

Speaker Change: Does he and nonwovens that both of them are women the condo joint deal with former Chartwell, neither political year with genius, but you got to that.

Speaker Change: Oh, Mcquilkin Gwen to malia commodity with the T cell.

Speaker Change: So for search engine of empowerment of Zika, yeah, with even thought through that and sort of the call.

As for our priorities for Libra casting business in 2024, well be putting a lot of priorities in terms of the quality of our revenues.

That's telling us the gross profit and gross profit margin of this business, we hope to achieve sustainable and high quality revenue growth.

Speaker Change: My broadcasting in 2024.

Sure.

Unknown Attendee: One moment for the next question. Our next question comes from Felix Liu from UPS. Please go ahead.

Speaker Change: Thank you one moment for the next questions.

Speaker Change: Our next question comes from Felix Liu from UBS. Please go ahead.

Felix Liu: ,,, momentum, driver, Sponsored ADR Class Z, Let me translate myself. Thank you, management, for taking my question. My question is about the advertisement. I noticed that your first quarter advertisement delivered a strong growth momentum. So may I check the reason behind this good performance?

Felix Liu: Hi, good morning.

Felix Liu: Okay.

Felix Liu: Uh huh.

Felix Liu:

Felix Liu: Oh.

Sure.

Felix Liu: Calculation.

Felix Liu: Maybe that sounds sort of momentum how you see something like that.

Felix Liu: Uh Huh figured all women's psychology goes I'll deal with them soon.

Speaker Change: Sure sure.

Speaker Change: Yeah.

Speaker Change: Sure.

Speaker Change: I forget.

Speaker Change: <unk> got long ago.

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Speaker Change: Let me translate myself.

Speaker Change: Management for taking my question. My question is on the advertisement business.

Speaker Change: Notice that your first quarter advertisement delivered strong growth momentum.

Speaker Change: Check the reason behind this performance and what is your outlook for the advertisement business for 2024.

Felix Liu: And what is your outlook for the advertising business for 2024? What will be the key growth drivers from here? In 2023, the annual advertising revenue exceeded 6.4 billion yuan, and the share price growth exceeded 27%. In Q4, the share price growth of our advertising revenue was 28%.

Speaker Change: B the key west drivers from here. Thank you.

Speaker Change: Oh, your son Nguyen Shannon I won't go so how one thing Tony Jones out, yes, how about that.

Shannon: You kill sit up at one o'clock, Although Tony Jones Act ship docks shebang. So it won't go that chunky shows on DHL chewing and thus you watch them and teach you sound all that assertion.

Xin Fan: So the overall revenue ratio of advertising also increased from 25% last year to 30% overall, which directly led to an increase in the overall revenue profit rate of the company. Our advertising revenue in 2023 totaled about over $6.4 billion, marking a 27% young year growth. And in the fourth quarter, advertising revenue grew by 28% year-over-year, contributing 30% of our total revenue, up from 25% during the same period last year.

Speaker Change: Yeah, but I don't know closer to one keep the showroom all either T cell.

Speaker Change: Yes.

Speaker Change: Our advertising revenue in 2023 totaled about six.

Speaker Change: Six.

Speaker Change: Deleon, marking a 27% on aircrafts and fourth quarter advertising revenue grew by 28% year over year contributing 30% of our total revenue up from 25%.

Speaker Change: The same period last year, the increasing as rapidly and its proportion is directly a result of improving our gross margin and gross profit.

Xin Fan: The increasing ad revenue and its proportion has directly resulted in improving our gross margin and gross cost. Next, I'd like to summarize the growth drive of Q4 for the past three years. First, let's look back at Q1 of 2023.

Speaker Change: This is Charlie about kill say Ali Al Husseini engine, yet, but if it turns out you don't meet that don't yet I'm sure he'll wake with Allianz signing QE She's a woman.

Xin Fan: We proposed a strategy for the whole year, which is to focus on the opportunities brought by social transactions at the same time. The first line refers to the ability of commercial platforms, including the traffic strategy, algorithmic ability, and data construction we mentioned. The second line refers to the vertical industry strategy. We turned the original brand-based advertising, effective advertising, and integrated marketing models into ten vertical industries.

Speaker Change: On Keytruda chernenko toilet, so he hung door, Tokyo, Guangzhou centric tell you Fang bad at Seaport.

Speaker Change: Yeah.

Speaker Change: So you don't have to not me, but I'll call it mid teens.

Speaker Change: So all that sounds like no absolutely yeah. So now you're telling us there's a choice of high it's owned.

Speaker Change: One by you and why the pin pads and Guangdong So long ago had shown that you can sell them more things.

Speaker Change: That's really just yet so I don't usually cooled holes on that does that go.

Xin Fan: The ultimate goal is to provide customers with a better experience and ROI. In the community, we also pay special attention to the revenue growth brought by transactions. We are different from the market, and we will continue to open up and integrate Bilibili's overall ecosystem into various e-commerce platforms and brands. And please, allow me to recap what we did in 2023 and in the fourth quarter and the growth driver. Actually, at the beginning of 2023, we have put forward a Yiheng Yizong strategy while paying close attention to the opportunities brought by the active commerce activities within our community. Yiheng refers to the middle platform capabilities for commercialization. Including our traffic strategy, algorithm capabilities, and our data power development. And Yizong refers to our vertical industry strategy.

Speaker Change: All of that is that T N E C O N E.

Speaker Change: They said shooting yet she doesn't want me to tell me the Guangzhou OLED fab that like a Guangdong show General Oh, unless you're going to see beyond. It tells you about jounce neither in the chunky sometimes cheat.

Speaker Change: You go with the assumption that Hey, you can pack.

Speaker Change: Yeah.

Speaker Change: And the FERC, let me please allow me to recap what we have done in <unk>.

Speaker Change: <unk> thousand 23 and in the fourth quarter.

Speaker Change: The growth driver actually are in the beginning of 2023 warehouse put forward.

Speaker Change: All strategy, while paying close attention to the opportunity brought by the active commerce activities within our community.

Speaker Change: First to the middle platform capabilities for a commercialization.

Speaker Change: Including our traffic strategy algorithm, you put them there really is and our data power development and Ito refers to our vertical industry strategies. Our ultimate goal is to provide customers with a better AD placement in experience and higher rois.

Xin Fan: Our ultimate goal is to provide customers with a better ad placement experience and higher ROI. We have formed 10 vertical strategies for different industry verticals. We also believe in the revenue potential that comes from active commerce-related activities within our community. As we stick to the open loop strategy, we plan to connect Bilibili to a more broader ecosystem with our e-commerce partners. For more details, we have shared them in previous episodes, so I won't go into details here.

Speaker Change: And then we have formed.

Speaker Change: <unk> vertical Scott strategies for a different industry.

Speaker Change: In the industry verticals, we believe.

Speaker Change: We also believe in the problem of potential drop off from after commerce related activities within our community.

Speaker Change: As we sticking to the open loop strategy, we plan to connect they literally until more broader ecosystem with our E Commerce partners.

Speaker Change: Oh gosh I can see the movement as I can see that seem to tissue to make a few little things out. So it's only coupons. Okay. Yeah, you should oh, well it sounds like you pulled up on those so those shipyard like how would you see that jumped up but that's only because I, usually say that kills the sangre to that one.

Xin Fan: And because of that, our ADR for the first three episodes exceeded our expectations. But here, I can talk about the three points worth paying attention to in Q4. As we have already shared a lot of information and cases about the Eco-Ethos strategy in previous calls, I will not dive into more detail here.

Speaker Change: Oh.

Speaker Change: As we have already shared a lot of information on cases about E com.

Speaker Change: Strategy in previous calls I will now dive into more detail here. However, because of that strategy. Our advertising revenue has also exceeded expectations for the first three quarters of 2024.

Xin Fan: However, because of that strategy, our advertising revenue has also exceeded expectations for the first three quarters of 2024. And now, I will share some additional highlights for the fourth quarter. One of them is that we still stick to the advantages of grasping and enlarging the vertical industry's big nodes, as well as the market capabilities of customers when they release new products. For example, in the game industry, in Q4, multiple games still broke through the consumer trend of industry history at the public test stage, including our familiar Dream of the Original, including The Legend of Xiao Nu Qian Xian Er. First, we are able to leverage the advantage of big events in specific verticals and to catch the momentum of the new product launch stage. I'll give two examples here.

Speaker Change: And now I will share some additional highlights and fourth quarter.

Speaker Change: Oh, you're going to just show them then I suggest you to hustle you found out about the idea that Youll ship I E E Commerce I start thinking should hold your cool that's our thinking so the Shandong Qunar believes that these oh, yeah that you said it all kind of see that goalpost I should pool Uh huh.

Speaker Change: So I think that's I'll say soldier Buffalo Michelle's, either given what you're seeing both sound good yeah.

Speaker Change: Yeah.

Speaker Change: First we are able to leverage that advantage in the big events in specific verticals and to catch the momentum of the new product launch stage at all.

Xin Fan: First of all, in the gaming industry, we have seen record high growth during the new games' open beta testing stage, such as Dream Star as well as Girls Frontline 2. The second example is the advertising revenue that we are familiar with. In the past, we have held many e-commerce events at Double 11, Double 12, and our annual sales festival. Double 11's GNV revenue has increased by more than 250%. The live streaming revenue has also increased by more than 100%. There is some interesting data, including on the mother-child care industry. In our opinion, the situation for Bilibili's users is a bit early.

Speaker Change: Make two examples here first of all in the gaming industry, we have made record high grossing during new games.

Speaker Change: New games open beta testing in states, such as the train star as well as the girls frontline too.

Speaker Change: Now the other leads and not just show me that'd be they'll shocks either that's what I love about golf some rational now.

Speaker Change: And that still holds that sushi by which I'm sure I don't want to watch.

Speaker Change: What's your thoughts on that because it sounds that truth teach also shea quartz, yet and it won't be Jones Act how about that.

Speaker Change: I see you bought back what a time see it told me turns out how about me back tissue.

Speaker Change: She says no you shouldn't be Dol, you'll use the soldiers.

Speaker Change: In 'twenty, yet does that that call out that you'd be done there.

Speaker Change: So that's a good thing Paul Hi, Cynthia Gaylor, the Pier 17, K you do open the Pea pack, who simply kidding.

Xin Fan: But it still brings the new customer rate of our e-commerce platform and our brand to nearly 90%. Another example is what we've seen in the e-commerce sector. So we actually hosted several e-commerce promotion events during W11, W12, and our New Year Shopping Festival, leveraging our video and live e-commerce capabilities. Here are some interesting numbers to share.

Speaker Change: Sure.

Speaker Change: Yeah.

Speaker Change: Another example, as what we've seen and the e-commerce sector. So we actually hosted several e-commerce promotion events during double 11 double 12 and argue here shopping festival, leveraging our retail and e-commerce capabilities.

Speaker Change: Tariffs are some interesting numbers to share during double 11, the total GMB generated from our life and video E Commerce increased over 250% year over year. The number of life E Commerce session that happened on visibility.

Xin Fan: During double 11, the total GMV generated from our live and video e-commerce increased over 250% year over year. The number of live e-commerce sessions that happened on Bilibili also increased over 100%. Additionally, there are some interesting verticals, like baby and maternities. It might sound a little bit too mature for our users.

Speaker Change: Also increase.

Speaker Change: Increased over 100%.

Speaker Change: And Additionally, here are some interesting vertical baby and maternity in my sounds a little too mature for our users. However, we're still able to bring over 90% of new users to the baby and maternity clients through our video AD like economists.

Xin Fan: However, we're still able to bring over 90% of new users to the baby and maternity client through our video and live e-commerce campaign. The second point is that our ability to invest in Q4 has been further strengthened. In the 24-hour ROI, our order transaction has become significantly better in terms of the ability to turn the effect around. This has improved the efficiency of customer costs, so we have earned more budget. Now, in Q4, we see that the turnover budget has exceeded 30% for overall advertising.

Speaker Change: <unk> campaign.

Speaker Change: But the idea is that you still got hold on let me I can even of downtown Seattle.

Speaker Change: That said all I wouldn't think that yeah.

Speaker Change: So sure since I didn't realize.

Speaker Change: Sure sure.

Speaker Change: You got me he said yeah.

Speaker Change: So it keeps our cocoa tone, but Joe T. Some cool for China.

Speaker Change: I've actually sold so well then I'm going to go to Asia.

Speaker Change: They'll put that uses a kind of a syndrome that you're shying things that geography, so I won't go into why that assertion.

Xin Fan: Secondly, we have strengthened our advertisement placement capability. In the fourth quarter, our deep conversion capabilities, including providing ROI and order information within 24 hours, gradually improved and matured. As a result, we're able to achieve the budget target for our customers more accurately, and therefore, gain more budget from them. Advertising with deep conversion. Port Pocket contributed over 30% of our total performance as revenue in the fourth quarter.

Speaker Change: Okay.

Speaker Change: Secondly is that we have strengthened our advertisement placement.

Speaker Change: Pick up already in the fourth quarter, our deep conversion capabilities, including provide ROI and order information within 24 hours has gradually improved and matured as a result.

Speaker Change: Able to achieve the budget target for our customers more accurately and therefore getting more budget from advertising.

Speaker Change: Advertising with deep conversion.

Speaker Change: Pop pocket contribute at over 30%.

Speaker Change: Of our total performance as revenue in the fourth quarter.

Xin Fan: Thirdly, in Q4, we first tried to integrate multiple product lines, including organization and business strategy. The joint Fireworks business platform further expanded the sharing of native content and its value, which has improved the lifetime consumption of advertising where customers put B-stamps. Thirdly, in addition to the big change in the strategy we mentioned just now, there are several points worth paying attention to.

Speaker Change: So they sound in a pod that you so I'm not sure if that's how Sheila thoughts honey Santa chunks.

Oh My God. This oh, what's that yeah, we'll tourism.

Speaker Change: Yeah, one thing I think people have called out suddenly.

Speaker Change: Yeah, I'll tell you Tyler.

Tyler: Yeah, So T sola khumbu telephone be done.

Tyler: Among all the change I mean talk to yourself, but the sand. It just is that Chaucer has shown true logotype tolerable Neal.

Tyler: So as I went through that.

Xin Fan: And thirdly, we have integrated our multiple product lines, in terms of organizational structure as well as the Prana also. And for example, by integrating our Sparkle ads platform with our other ad products, we have further expanded the quantity and the quality of our native content, therefore enhancing and expanding our customers' lifespan and investment cycles on our platform. Those three reasons, combined with what we have said about the Yiheng Yuzhong strategy, are the key drivers for our fourth-quarter advertising revenue. At the end of Q4, I would like to talk about the business that everyone is most concerned about, which is our transaction business. You may call it a delivery service, but at our company, we call it a transaction business.

Tyler: And thirdly is that we have integrated our multiple product lines.

Tyler: In terms of organizational structure as well as the product offerings and for example by integrating our sparkle apt platform with our other AD products. We have further expanded the quantity and the quality of our native content. Therefore it has.

Tyler: Yes.

Tyler: Bad debt or cut customers lifespan.

Tyler: And investment cycles on our platform.

Tyler: Those three reasons combined with what we have said about the 800 and its own strategy is the key drivers for our fourth quarter advertising revenue growth.

Tyler: Central hold El Pas that kill citizens.

Tyler: So again I actually thought that that would be the one thing, though I mean, that's all yeah, so that kind of jumped out.

Tyler: Maybe we'll wait till that Oh, yeah.

Speaker Change: Oh, yes, Danielle I'm about to tell you the tone.

Xin Fan: In 2023, we will integrate the transaction scene into the content ecology and realize the transformation of Bilibili from heavy to long-term transactions. We now have more than 26 million users a year who will watch the relevant content of the delivery service. After watching the Bilibili delivery ad, they will go to the comment section or the play page and click the jump to compare users. The growth rate is more than 200%.

Speaker Change: You may wish him well.

Speaker Change: Please Angela Jones holiday, which hung out Oh, Wow switch any other general merchandise how loyal.

Speaker Change: She can do by Atlanta Young pool could you quantify that.

Speaker Change: One Neil so total fees and therefore, the one golf cannot be done at that whole Guangdong to adoption. When she was like Oh, yeah, Yeah, Yeah yeah.

Speaker Change: You'll recall the BB pony it turns out how about that.

As for the video and live E Commerce business that many of US sure we're very our interest step out.

Xin Fan: As for the video and live e-commerce business that many investors were very interested in, I will share more detail on that. In 2023, we further integrated commercial scenarios into our content ecosystem, influencing our users from product feeding to transaction conversion. In 2023, on a daily average, over 26 million users have viewed our commercial. Video e-commerce related content, and the number of users who click on the comments related videos and redirect to external platforms increased over 200%. Secondly, advertisements like delivery also bring new income channels for app owners. In Q4, more than 60,000 app owners participated in the delivery business every day. Among them, Lideng, which represents the family home decoration type of app owners, delivered more than 1.6 billion GMVs during the live delivery transaction during the Double 11 period. At this point, it is still very surprising to find the unique advantage of Bilibili. What is it?

Speaker Change: I will share more detail on that in 2023, we further integrated the commercial scenarios into our content ecosystem influencing our users from product to product seating to transaction conversion.

Speaker Change: In 2023.

Speaker Change: Daily on daily average over 26 million users has butte are calmer come.

Speaker Change: Video e-commerce related content and the number of user click on the commerce related videos and they direct to external platforms increased over 200%.

Speaker Change: Yeah.

Speaker Change: Oh, Dear Oh, Dear Oh partnership.

Speaker Change: Call. It a guangzhou yeah, we're onto that I think that shows the total that you sit up on pynchon make tangible near Orlando the object.

Speaker Change: With that well.

Speaker Change: Yeah.

Speaker Change: Oh that'd be all shall we see the sounds you judge only the object you don't that's Shanxi is Higgins went back which I'll either Joey that you have each how golar sui, especially.

Speaker Change: Yeah.

Speaker Change: Do you see it in a fashion they'll be then the total youll shouldn't necessarily now.

Yeah, and some of those sounds judge issue, there's a guy that nice.

Speaker Change: Nice shops at like yes will it be than the ships now you won't beat out call. He said I've got a final ship a powerful symbol choking them more ship assortment, we want it and you go back on the Ocean.

Xin Fan: Sponsored ADR Class Z. So, actually, on the other side, the video and live e-commerce product also introduced new monetization and commercialization avenues for our content creators. In the fourth quarter, over 60,000 content creators participated in video and live e-commerce-related activities on a daily basis. During double 11, our home and decoration content creator, Mr. Meaden, has generated over 1.6 billion RMB GMB through Bilibili. This demonstrates Bilibili's unique advantage in comprehensive and in-depth long-form content, especially in durable consumer and retail sectors, such as home and decoration and technology and digital products. The second app is a female-only clothing app called Yingwu.

So actually on the other side the video and live E. Commerce product also introduce new monetization and commercialization avenues for our content creators and the fourth quarter over 60000 content creators.

Speaker Change: As anticipated and video and live e-commerce related activities.

Speaker Change: On a daily basis.

During double 11, our home decorate her home and and decoration content create or Mr. Eaton has generated over one 6 billion RMB G M b to deliberately.

Speaker Change: This demonstrates <unk> ability unique advantage in that.

Speaker Change: In comprehensive and in depth long long form content.

Speaker Change: Especially in durable consumer and retail sectors, such as home decoration.

Speaker Change: <unk> technology and digital product.

Speaker Change: Oh, yeah, absolutely that's the one that you think foods only the onshore U.

Xin Fan: In December, it sold over 50 million units of GNV on its first day of sales. This further proves that Bilibili's female users have a huge potential. I think these two cases are based on the fact that all the content platforms on the Internet should have exceeded expectations. This also proves Bilibili's advantage in future business transactions. And another example would be our female content creator, Ying Li.

Speaker Change: That's all you have a sense of what I call the downtown.

Speaker Change: So that's all each N V to Hollywood Kevlar.

Speaker Change: Tim will join me and lobbies under new Shin young who their salvage ship Gee that was it so long I lead song to used oil do you tell them they own pinkeye, even though those are calling in here. So you got Andy Yeah. She told me Besides I wont hold that's all year with Xiaomi and Yorkshire.

Speaker Change: Uh huh.

Speaker Change: Another example would be our one of our female content creator Lee.

Xin Fan: In December, the total GME of her single live e-commerce session was over 50 million RMB, and this also represents the significant consumption potential of Bilibili's female user base. And with Mr. Midan and Ms. Yingwu, these two cases, we believe this is considered to be the leading showcase across our industry peers and also shows the great commercialization potential of Bilibili's community. In 2023, Bilibili's gross gross profit will exceed RMB10 billion.

Speaker Change: December the total Jan me a per single life E. Commerce option has hereby at her where over 50 million RMB and this also represents the significant consumption potential of daily believes female user user base.

Speaker Change: And with Mr meter and is leased.

These two cases, we believe this is considered to be the leading us showcase.

Speaker Change: Across our industry peers, and also showed the great potential commercialization potential of disability community.

So he thought he was sunny I know puppies under that cool Zhejiang Shanghai, the javelin tower like ebay.

Xin Fan: I believe that the potential of Bilibili's users has just been released. In the future, as long as we finish setting up the scene, there will be huge growth. In 2023, the total GMV on Bilibili's video and live e-comments will be over 10 billion RMB.

Speaker Change: So it sounds like these are doing of course I had sent me, yes I can.

Speaker Change: They shut off just as they lay it all on metallic body along B how would you at all that you just called it.

Speaker Change: Yeah.

Speaker Change: In 2023, the total G M b on visibility.

Speaker Change: B deal in life E Commerce were over 10 billion RMB, we believe that the commercial value of visibility user base has just started to be realized and they are enormous rooms for our future growth.

Xin Fan: We believe that the commercial value of Bilibili's user base has just started to be realized, and there are enormous rooms for our future growth. For 2024, we have a very positive expectation of the advertising business, and we are extremely confident that we can maintain a high number of sales in 2023. Let's review why we are so confident and what is the core competitiveness of Bilibili.

Speaker Change: Do you already see in the Hong Kong, Oh, Yeah, well the U T well Michelle.

Speaker Change: Hi, OTC sinking creep out shell walnuts Danielle.

Speaker Change: Oh sure.

Speaker Change: No quite voice out in relationship with we always seem to know quite well he is agile teams.

Xin Fan: ???B??????????????? ?????????????????????????????? ?????????????????,???????, ?????????????????,???????, ?????????????????????????????????? ??B????????????????????B?????????????????? ?????????,??????????,??????B?? We maintain a very positive outlook for our advertising business in 2024 and we are quite confident to achieve a high growth, in terms of advertising property. So first of all, I'll let, Review Bilibili's core advantage in advertising, which will be our user base. Bilibili has the highest density of young populations in China, and the value of our advertising platform lies within its own user base, with the average age of our user being 24 years old.

Speaker Change: The only issue or something.

Speaker Change: He says B.

Speaker Change: These are sold wall, yes, you need to take all of the Ping.

Speaker Change: Partnership wont go Peanuts, Joshua young who judge Jinyan Shanxi eating so dollar took leak hellish yourself opinions yes.

Speaker Change: In dollar sulfate. There's also pulled out of Columbia that will truly be the citizens I paint patch in these shows they seem to have the bishops impact Russian threat. She delicia how'd you Charles he can he felt they seem to have under which ends up being done.

Speaker Change: We maintained a very positive outlook for our advertising business in 2024, and we are quite confident to cheat achieve a high growth rate in terms of advertising property.

Speaker Change: So first of all.

Speaker Change: <unk>.

Speaker Change: Re review there is a core advantage and advertising, which it will be our user base.

Speaker Change: It really has the highest density of young populations in China, and the value of our advertising platform with lives within its own user base with average age of our user being 24 years out.

Speaker Change: We believe our users consuming power buying power has just gradually.

Speaker Change: Gradually.

Speaker Change: And deliberately has now become the go to platform for advertisers to whether it's improved their brand equity.

Speaker Change: In the longer term or influence users' purchasing decision.

Speaker Change: And comp ourselves in the short term visibility has become a must invest advertising platform.

Speaker Change: No I was senior they'll watch them I would guess a lot of young children.

Speaker Change: Yeah, So Julian because you'll popcorn, let's hold on let me go and it's obviously shown a chunk or my way possible, sometimes you don't.

Speaker Change: Chaco assistance.

Speaker Change: And I'm quite a cool phone he thought the thought behind the tolls on zinc languishes young called whole life.

Speaker Change: So just hold on a huge even though you're quite young cuckoo cashing in Canada, and then kind of is on the so the soldier she J D can hold onto the sidewalk.

Xin Fan: We believe our users' consuming power, and buying power, just gradually is growing, and Bilibili has now become the go-to platform for advertisers, whether it's to improve their brand equity in the longer term or influence users' purchasing decisions and convert sales in the short term. Bilibili has become a must-invest advertising platform. In 2024, we will still stick to the original one-stop-one-goal strategy and make some upgrades.

Speaker Change: Well, that's all I can see why we told you a quango aig's either you won't go sell either T cell I'll just doesn't vehicles and so forth are the ones who told on the league I saw your T cells, yes that sounds good.

Speaker Change: I guess the other pools.

Speaker Change: Sure, especially challenging to send home.

Speaker Change: Sure.

Speaker Change: So they'll quit people with a lot, though just so they won't go that low seasonal holiday on a sunny and allow them to do all of that back story P. C. O T T. The bulge hunting toward that goal not only how soon you know well Matt has just joined in with you.

Xin Fan: For example, we will integrate all the investment systems, realize smart investment, multi-stage investment, and soon realize remote service. Investment data will also allow customers to see Bilibili's data at any time to determine the effect of an investment. In addition, we will pay special attention to the improvement of advertising efficiency of AIGC. This is the first part. We will pay special attention to the improvement of the ability to upload and efficiency. This is also part of the upgrade.

Speaker Change: He's on the Italian young the challenging alcohol that don't put them in a social.

Speaker Change: So I'm sure. She said Anthony Tse Senior bank almost ship he has its issues I don't know what she does.

Speaker Change: When Pat the Shanghai toilet alcohol woman Oh, yeah someone got quite the woman that live along the P&C I can get quite deep with a T cell.

Speaker Change: And so kind of what's your phone called border wont go through each one.

Speaker Change: Okay.

Xin Fan: The second part is the penetration of community scenes and the upgrade of traffic strategy. This will further drive the effective advertising ad load. In 2023, we will focus on the development of Story, PC, OTT, etc. In 2024, we will focus on the integration of Bilibili's large traffic scenes, including our dynamic, search, hot search, and other community scenes to form a new advertising model. In terms of technology, we have also realized a mixed algorithm.

Speaker Change: Additionally for 'twenty 'twenty four we plan to further upgrade our E. Commerce strategy first of all we will enhance our AD placement capabilities and improve its efficiency. This includes integrating our AD placement system achieving Intel.

Speaker Change: And in multi terminal at placement at experience and we plan to achieve automatic placement for our advertisers at.

Speaker Change: At some point this year and will further develop our data visuals itemization tools, allowing clients to validate the results of their AD placement to multi dimensional data.

Xin Fan: In addition, our native advertising will further improve our traffic chains. To sum up, this may release more advertising storage. Sponsored ADR Class Z, Additionally, for 2024, we plan to further upgrade our Yiheng strategy. First of all, we will enhance our app placement capabilities and improve its efficiency. This includes integrating our app placement system, achieving an intelligent and multi-terminal app placement experience.

Speaker Change: Placement and will also be very paying close attention and looking to what aig's. He can bring to help us to improve ad efficiency.

Secondly is that we will penetrate more community scenarios and upgrading our topics strategies to improve our outlook they fish effectively.

Speaker Change: For example building on our last years expansion into mouth has scenarios like story mode P. C and OTT, we will focus on integrating those scenarios as well as the moment page the search function and other community sitting there.

Xin Fan: And we plan to achieve automatic Placement for our advertisers at some point this year. And we'll further develop our data visualization tools, allowing clients to validate the results of their ad placement through multidimensional data placement. And we'll also be paying close attention and looking to what AIGC can bring to help us to improve ad efficiency. Secondly, we will penetrate more community scenarios and upgrade our traffic strategies to improve our outload efficiency. For example, building on our last year's expansion into multi-scenarios like story mode, PCA, and OTT, we will focus on integrating those scenarios as well as the moment page, the search function, and other community Meanwhile, we are also looking to enhance our monetization efficiency by arranging ads videos in a hybrid mode on the recommendation page and further promoting native ads. To summarize, we'll be effectively leveraging and increasing our ad inventory and ad load in 2020. Thirdly, this is also a positive attempt. We want our customers to become app owners. This is the original way to make customers log in to Bilibili and become an app owner with a Lanvi account.

Speaker Change: Yes.

Meanwhile, we are also looking to enhance our monetization efficiency by arranging add videos in a hybrid mode. In the recommendation page further promote native apps to summarize we'll be effectively leveraging and increase our attitude.

Speaker Change: Inventory and outlawed in <unk> and 'twenty four.

Speaker Change: He signed yet so there you see the exalt D. The posture, we uncooked Fortunately option. So yeah as soon as long as it's usually young who used to be that tell me you're onto something we're gonna have either John Paul Yeah, I'll do the shows on tying it up behind us such as Shanghai.

Speaker Change: These are the things you put on the Youll shook adult cohort by year Shanxi handful each have whole volunteer short you agree that'd be buying season. So that's easy because I don't know call changeover puppy body patches Hot pizza.

Speaker Change: Yeah.

Speaker Change: Lastly, we'll be actively explore the client app content creator model to encourage our advertising clients to create at night, if native native content and open their own brand accounts ambulant belly.

Xin Fan: As an app owner, you participate in the ecosystem of the Bilibili community. We will release Bilibili's unique poetry and interactive advantages to our customers. The budget will be realized at the end of one launch. In fact, it can be operated in Bilibili.

Speaker Change: On the other hand, we'll also be releasing the private domains for those advertisers and launch more interactive functions for them to interact with our users through those efforts.

Speaker Change: We aim to convert a single AD placement into a long term operation and increase our clients brand equity.

Xin Fan: In the end, the brand's assets can be stored in Bilibili. Lastly, we'll be actively exploring the client-as-content-creator model to encourage our advertising clients to create native content and open their own brand accounts on Bilibili. On the other hand, we will also be releasing private domains for those advertisers and launching more interactive functions for them to interact with our users. Through this effort, we aim to convert a single ad placement into a long-term operation and increase our client brand equity. The upgrade of the mobile strategy is relatively simple.

Speaker Change: Oh, you don't have somebody at the outset that you saw in my Sunny a womans I treasure Hunt.

Speaker Change: For the sugar cane sugar and you'll.

Speaker Change: How easy the jungle sounds a little taller.

Speaker Change: Hello, Mr Palmer.

Palmer: Yes, so when we have a quite sort of called out with a cool the wave one which were three well you saw that in bulk what that she trusts format.

Palmer: She shopped at 114 year old Joe you, Don how bullish and saying look also the jonestown.

Palmer: Diesel gets such a hope of Joey Peachy dialing us and you.

Xin Fan: In fact, in 2023, in the vertical industry, we are more prominent than ever in the e-commerce and game industry. Such a successful vertical industry strategy can be replicated. At the same time, we can also quickly expand the scale of our customers and flow. So I predict that this year, including car, digital, home, home appliances, online services, finance, education, and other industries can achieve rapid growth. Fourth, the trading system will definitely become more prosperous in 2024. It will also bring us more surprises in terms of advertising revenue. Thank you. Thirdly, we have our e-zone strategy.

Palmer: We'll find Yana, yeah, John Dugan woman and pick up on those so you can do other things.

Palmer: Yeah.

Palmer: Thirdly, as an artist he jumped strategy. We believe we can replicate the successful experience we had e-commerce apps and games lost share and replicate that model into other fast growing sectors such as.

Palmer: Automotives Tac homeland decoration, Allied services, finance and education et cetera, and we do believe we can achieve high speed growth rate in those verticals as well.

Palmer: Lastly to summarize we believe the further flourishing of e-commerce ecosystem will bring us more pleasant surprises and advertising revenue in 2024. Thank you operator next question. Please.

Speaker Change: Thank you for the questions.

Speaker Change: Yeah.

Speaker Change: Our next question comes from <unk> Chung from Bank of America Securities. Please go ahead.

Chung: Oh, Hi, running time wise on hospice, if they thought well, let's see.

Xin Fan: We believe we can replicate the successful experience we had in e-commerce and games last year and replicate that model in other fast-growing sectors, such as automotive, tech, home, and decoration, online services, finance, and education, etc. And we do believe we can achieve high-speed growth rates in those verticals as well. But lastly, to summarize, we believe the further flourishing of our e-commerce ecosystem will bring us more pleasant surprises in advertising revenue in 2024. Thank you. Operator, next question.

Chung: Well the once you go out there with how we'll probably end up pushing some don't go my thank God.

Chung: Can you just how we're supposed to do that that Wow, So really nice agenda driver, Ohio, Tien tsin going I'm wondering if that was unconscious bias.

Speaker Change: Thanks management for taking my question can you give us more color on your financial outlook for time to time, they fall, including Robin you are breakeven path and our cash flow channel. Thank you.

Speaker Change: Thank you I will take this question as Mr. Chen mentioned earlier, one of our most important task for 2020 for you to improve our financials and achieve the profitability the way.

Lei Zhang: Thank you for the questions. Our next question comes from Lei Zhang from Bank of America Securities. Please go ahead.

Speaker Change: We plan to achieve the target will be similar to what we have done in 2023 largely through the growth of the gross profit as well as expense management.

Lei Zhang: Hi, good evening. Thank you for accepting my question. My question is mainly about finance.

Speaker Change: Let me go.

Speaker Change: Go through these in more detail.

In 2023, our top line grew by 3% year over year, our gross profit increased by over 40% year over year in 'twenty to 'twenty four we expect our top line growth.

Lei Zhang: Can you share with us the outlook on financial data in 2024, income, profit, time, driver, cash, and our current debt situation? Thank you. I will read it myself.

Speaker Change: Accelerate and achieved double digit growth rate with AD revenue grow at even faster rate.

Xin Fan: Thank you for taking my question. Can you give us more color on your financial outlook for 2024, including revenue, breakeven path, and our cash flow trend? Thank you.

Speaker Change: We expect our gross profit will also maintain high growth in 2024 as we further improve our gross profit margin.

Speaker Change: Attributed by higher contribution from high margin business.

Speaker Change: Expense wise, we will keep improving our operational efficiency, we expect to reach non-GAAP operating breakeven in Q3 this year.

Xin Fan: As Mr. Chen mentioned earlier, one of our most important tasks for 2024 is to improve our financials and achieve profitability. The way we plan to achieve this target will be similar to what we did in 2023, largely through the growth of gross profit as well as expense management. Let me go through this in more detail.

Speaker Change: And let me share more color on our cash flow and the balance sheet side.

Speaker Change: Have achieved positive operating cash flow in Q3, and Q4 2023, especially in Q3, we have generated over 600 million and be operating cash flow that means our company has entered into a positive cycle for development.

Xin Fan: In 2023, our top line grew by 3% year-over-year, and our gross profit increased by over 40% year-over-year. In 2024, we expect our top line growth will accelerate and achieve double-digit growth rates, with ad revenue growing at an even faster rate.

Speaker Change: We expect to keep doing that and maintain positive operating cash flow throughout 2024.

Speaker Change: On the liability side, we have repurchased of repaid $1 2 billion U S. Dollar CB last year now on December 31, 2023, we had approximate $2 1 billion U S dollar cash reserves our balance sheet.

Xin Fan: We expect our gross profit will also maintain high growth in 2024 as we further improve our gross profit margin, attributed to higher contribution from high-margin as business. Expense-wise, we will keep improving our operational efficiency. We expect to reach non-gap operating breakeven in Q3 this year. And let me share more about our cash flow and balance sheet size. We have achieved positive operating cash flow in Q3 and Q4 of 2023. Especially in Q3, we generated over 600 million RMB operating cash flow. That means our company has entered into a positive cycle for development. We expect to keep doing that and maintain positive operating cash flow throughout 2024. From the liability side, we repurchased or repaid $1.2 billion of CB last year. Now, on December 31, 2023, we had an approximate $2.1 billion of CB cash reserve on our balance sheet, compared with an outstanding CB of 860 million. Our cash, U.S. dollars, and our cash reserve are sufficient to cover all of our company debts.

Speaker Change: Compared with outstanding CB.

Speaker Change: $850 million.

Speaker Change: Our cash U S dollar our cash reserves are sufficient to cover all of our company that thank you.

Speaker Change: Yeah.

Speaker Change: Thank you for the questions and that concludes the question and answer session.

Speaker Change: Thank you once again for joining split released fourth quarter and fiscal year 2023 financial results and business update conference call. Today. If you have any further questions. Please contact Juliet Yang Billy beliefs, Executive's IR director.

Speaker Change: <unk> financial communications.

Speaker Change: Contact information for IR in golf, China, and the U S can be found on today's press release have a great day.

Speaker Change: That does conclude today's conference call you may now disconnect your lines.

Speaker Change: [music].

Unknown Attendee: Thank you. Thank you for the questions, and that concludes the question and answer session. Thank you once again for joining Bilibili's Fourth Quarter and Fiscal Year 2023 Financial Results and Business Updates conference call today. If you have any further questions, please contact Juliet Yang, Bilibili's Executive IR Director at Biasente Financial Communications. Contact information for IR in both China and the US can be found in today's press release. Have a great day! That does conclude today's conference call. You may now disconnect your line.

Speaker Change: Yes.

Speaker Change: Yes.

Speaker Change: [music].

Speaker Change: Okay.

Speaker Change: [music].

Unknown Attendee: Bilibili, Inc. Sponsored ADR Class Z Bilibili, Inc. Sponsored ADR Class Z Bilibili, Inc. Sponsored ADR Class Z Bilibili, Inc. Sponsored ADR Class Z. Thank you very much for attending today's meeting!