What Investors Should Know About Bilibili's Q2 Report

Bilibili Inc - ADR BILI, a Chinese company that engages Gen Z fans in media content, reported second-quarter earnings on Wednesday.

What Investors Should Know: Bilbili reported a 70% increase in total revenue. Monthly average users grew 55% to 172 million. Mobile monthly active users grew 59% to 153 million. Daily active users grew 52% to 51 million. Monthly paying users grew 105% to 12.9 million.

Bilbili said its users spent an average of 79 minutes daily exploring its content. Daily video views of 1.2 billion grew by 97%.

Why It’s Important: The company continues to diversify away from a reliance on gaming revenue thanks to higher growth in other areas.

Gaming revenue grew 36% in the quarter. Strong results from the Japanese RPG “Princess Connect Re:Dive,” which topped the China iOS charts, helped the quarter.

Eleven games are slated for release in the coming months. The company also recently announced a deal to bring “Fall Guys” to mobile in China.

Value Added Service revenue increased 153% to 825 million RMB ($120.1 million) in the quarter.

The company highlighted its three-year partnership with Tencent Holding TCEHY-owned Riot Games for “League of Legends” content as a huge driver.

Advertising revenue grew 108% to 349 million RMB in the quarter. Despite market uncertainties, Bilibili continued to see the strength of its Gen Z user base result in increased advertising demand. 

The company was pleased with its non-game offerings growth, as gaming represented around 50% of overall revenue. Growth remains present in the gaming market, but VAS and advertising are growing much faster.

What’s Next: Bilibili is guiding for third-quarter revenue to come in a range of $3.05 to $3.10 billion RMB. This would represent growth of 64% from the prior year.

BILI Price Action: Bilibili shares are up 142% in 2020. The stock was trading 4.84% higher to $47.32 at the time of publication Friday. 

The company remains in a limited group as a live streamer, mobile gaming company and esports team owner.