Why Chinese Video Sharing Company Bilibili's Stock Is Sliding Today

Bilibili Inc BILI reported third-quarter FY23 revenue of $795.7 million (RMB5.8 billion), flat year-on-year, missing the consensus of $817.3 million. 

The Chinese video-sharing platform's adjusted EPS loss of $(0.29) missed the consensus loss of $(0.26).

Drivers: Average daily active users (DAUs) climbed 14% Y/Y to 102.8 million.

Revenues from mobile games were $135.9 million, down 33% Y/Y, mainly due to the high base from the release of Space Hunter 3 in June 2022 and lower-than-expected revenues from certain new games. Value-added services (VAS) revenues grew 17% Y/Y to $355.7 million, led by increased revenues from live broadcasting and other value-added services. 

Advertising increased by 21% Y/Y to $224.5 million. Revenue from IP derivatives and others (formerly known as e-commerce) decreased 23% Y/Y to $79.5 million, primarily due to reduced revenues from IP derivative sales.

Bilibili held $2.0 billion in cash and equivalents.

Chair and CEO Mr. Rui Chen said, "Our DAUs surpassed an exciting milestone of 100 million, marking a 14% year-over-year increase to 103 million. Additionally, users' average daily time spent on our platform reached a historical high of 100 minutes, boosting total user time spent by 19% year-over-year."

Outlook: Bilibili expects FY23 revenues at the low end of RMB22.5 billion - RMB23.5 billion due to lower-than-expected mobile game revenues.

The stock has lost 50.6% YTD.

Price Action: BILI shares traded lower by 4.12% at $12.79 in the premarket session on the last check Wednesday.