Bilibili Inc.

Good day and welcome to the Bilibili Second Quarter 2025 Financial Results and Business Updates Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Juliette Yang, Executive Director of Investor Relations. Please go ahead.

Thank you, Operator. During this call, we'll discuss our business outlooks and make forward-looking statements. These comments are based on our predictions and expectations as of today. Actual events or results could differ materially from those mentioned in today's news release and in this discussion due to a number of risks and uncertainties, including those mentioned in our most recent filing with SEC and Hong Kong Stock Exchange. The non-GAAP financial measures we provide are for comparison purposes only. The definition of this measure and the 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 Senior Management are Mr. Ray Chen, Chairman of the Board and Chief Executive Officer, Ms. Kali Lee, Vice Chairwoman of the Board, and Chief Operating Officer, and Mr. Sam Phan, Chief Financial Officer. I will now turn the call to Mr. Chen.

Thank you, Juliette, and thank you to everyone for joining us today to discuss our 2025 second quarter results. We maintain strong momentum in the second quarter, delivering solid revenue growth alongside our thriving community of high-value, loyal young users. Total net revenues for the second quarter grew by 20% year-over-year to RMB 7.3 billion, driven by the continued strength of our core games and advertising businesses. Games revenues rose 60% year-over-year to RMB 1.6 billion, propelled by new seasons of our popular SLG title, San Guo Mou Ding Tian Xia, San Mou. Advertising revenues increased 20% year-over-year to RMB 2.4 billion, supported by greater AI integration that made our ads more efficient and effective. Underpinned by operating efficiency, our growth in games and advertising drove a 46% year-over-year increase in gross profit, with gross margin expanding to 36.5% from 29.9% in the same period last year. As a result, we achieved gap net profit of RMB $218 million and adjusted net profit of RMB $561 million. Our performance reflects our growing influence among China's Gen Z plus audience. By providing users with high quality content they love, we foster deeper engagement that fuels our commercial ecosystem. In the second quarter, DAUs reached a new high of 109 million, up 7% year over year. And MAUs grew by 8% to 363 million. MPUs also grew by 9% to 31 million. The average daily time spent rose to 105 minutes. up six minutes compared to the same period last year, reflecting our continued focus on high-quality videos that capture and hold our community's interest in meaningful and fulfilling content. Our growing influence among our core users is showing up both online and offline. This year's Bilibili World and Bilibili MacroLink grew in record crowds. Over 400,000 participants attended the three-day event, 60% more than last year. making it one of the largest offline animation expos in China. The strong turnout reflects the vitality of our brand and the power of our community, showing the tremendous potential of our young users. Their tastes are already shaping mainstream trends, and countless more interests within our community are waiting to be unleashed. Looking ahead, we will sharpen our focus on delivering the best PUGV community experience, attracting more users and growing alongside them. At the same time, we will continue to proactively invest in monetization initiatives to drive sustainable profitability. Through these efforts, we are confident in our ability to create long-term value for all of our stakeholders. With that overview, let's take a closer look at our core pillars of content, community, and commercialization. Beginning with content and community, We remain firm believers that high-quality content and an engaging community are essential to the lives of today's young generation. Gen Z Plus comes to Bilibili not for quick hits, but for meaningful content they care about. And we're seeing that translate into stronger influence, longer watch time, and greater commercial potential across every corner of our platforms. Driven by high-quality PUGB content, the average daily time spent reached 105 minutes in the second quarter, up six minutes year over year. Notably, the watch time for videos longer than five minutes increased nearly 20% year over year in Q2, proving Bilibili's undeniable user mindshare to consume mid-to-long form meaningful content. Not only are people spending more time, but more people are paying for premium content. Monthly paying users increased by 9% year over year to 31 million, driven by membership, fan charging, and live broadcasting. In the meantime, our community remains engaged and loyal. The number of official members was up by 11% year over year to 270 million, with a 12-month retention rate remaining around 80%. We maintained our dominant leadership in ACG content. Chinese anime content performed strongly during the second quarter, with watch time up 34% year-over-year, driven by popular titles such as A Record of Mortals' Journey to Immortality , The Tales of Hurting Gods , and Linkage Season 2 . Game content remained one of our top categories, with watch time increasing by 21% year-over-year, making Bilibili an essential platform for game developers to engage deeply with the gamer community and strengthen their IP. It is also no surprise that AI-related content continues to be a breakout category. Watch time grew 61% year over year, cementing Bilibili's role as the go-to platform for Gen Z Plus to learn, explore, and create with AI. Likewise, AI advertiser demand increased by about 150%, highlighting the great synergy between content value and commercial potential. Meanwhile, consumption-related content categories continue to grow, driven by evolving user behavior. As our Gen Z Plus users become more financially independent, they increasingly rely on peer creators for trusted reviews and tutorials when making purchase decisions. This has boosted engagement across verticals. Watch time for home appliance content rose 14% year over year, Parenting and early education rose more than 50%, and travel and lodging saw an 11% increase, reflecting growing interest in experience-driven consumption. We continue to enhance our products and services to help creators make more money. In the first half of the year, about 2 million creators earned income on Bilibili through various channels. Creators' total income from our fan charging program more than doubled in the first half of the year. once again showing users increasing willingness to pay for quality content. The number of creators monetizing through Sparkle ads and video and live stream e-commerce also grew 19% and 49% year over year, respectively, in the first half of the year. Now, let's talk about our commercial businesses and their progress. Our commercial growth. demonstrates how our growing influence among younger users is directly translating into commercial value. Advertising is one of the most direct business lines that shows this. In the second quarter, our ad business grew 20% year over year, reaching RMB 2.4 billion and continuing to outpace the industry's average growth rate. During the second quarter, we continued to advance our ad infrastructure improving ad conversion efficiency through recommendation algorithms, creative generation, and smart ad placement. Through deeper LLM integration with multimodal content understanding, we are capturing user intent more precisely and delivering smarter, more personalized ad recommendations. The upgrades we've made to the AIGC tools are also helping advertisers generate high-performing creative ads at scale. In the second quarter, Roughly 10% of new ad titles and over 30% of ad covers were created using these tools, helping advertisers reach users more effectively with content that resonates with their target audiences. We also offer smart ad placement tools to allocate, sequence, and monitor ad performance in real time, significantly reducing manual operations at the same ad spend. These enhancements are boosting both efficiency and scalability. improving eCPM by more than 10% year-over-year, and fueling around 30% year-over-year growth in performance-based advertising revenue in the second quarter. Revenues for brand and native advertising also maintained healthy momentum. Industry-wide, games, digital products, and home appliances, e-commerce, internet services, and automotive were our top five advertising verticals in the second quarter. The number of advertisers increased by over 20% year over year, reflecting our growing appeal to brands. Leveraging our dominant user mindshare, game developers are allocating larger ad budgets to Bilibili to engage more deeply with young gamers. Demand for 3C and digital products remained robust, supported by our leadership in these categories and national subsidy tailwinds. In e-commerce, Bilibili delivered an average new customer acquisition rate of about 60% for advertisers across industries under the SINCO plan during this year's 618 season. GMV from products priced above RMB 1,000 increased nearly 50% year over year, further demonstrating our users' strong purchasing power and our ability to convert user engagement into high-intent transactions. Turning to our games business, In the second quarter, revenues increased by 60% year-over-year to RMB $1.6 billion, owing to Sanmo's enduring strength in its first year and Evergreen titles FGO and Azur Lane, which recently celebrated their 9th and 8th anniversaries, respectively. To mark Sanmo's first year anniversary, we rolled out and upgraded Season 8 on May 31st, featuring new gameplay, characters, and in-game events, backed by a targeted marketing push. Both engagement and retention have been solid as we enhanced onboarding, monetization paths, and returning user experiences. Building on this strong momentum, we are developing new game seasons, piloting mini-program offerings, and preparing for Semmo's international rollout later this year. Looking at our game pipeline, we have a number of games in the approval process, including multiple ACG titles and casual games. Once approved, we are prepared to bring them to our community and further expand our presence in the gaming space. And finally, let's look at our VAS business. Revenues grew 11% year over year to RMB 2.8 billion, driven by steady momentum across live broadcasting, premium memberships, and other value-added services. Our focus remains on refining live broadcasting operations by fostering more quality content and diversifying monetization features to support steady growth. Through refined operation, gross profit margin for live broadcasting continued to improve in the second quarter. Premium memberships maintained stable growth, reaching 23.7 million at the end of the period, with over 80% on annual or auto renewal plans, demonstrating their loyalty and commitment to our platform. Meanwhile, our other VAS products continued to grow rapidly in the second quarter, especially our fan charging program, which increased by more than 100% year over year, with more users showing their support for the creators and high quality content they love. Looking ahead, our focus remains on what sets Bilibili apart, high quality content that resonates with China's Gen Z plus generation. This is the foundation of our growing influence and the engine behind our expanding commercial opportunities. At the same time, we are actively embracing the transformative opportunities brought by AI, from enhancing operational efficiency to elevating user experience, accelerating monetization, and expanding our global reach. These advancements further strengthen our foundation for sustained growth and long-term profitability. With that, I will turn the call over to Sam to share more financial details. Sam, please go ahead. Thank you, Mr. Chen.