Bilibili Inc (BILI) 2018 Q1 法說會逐字稿

Operator: Good day and welcome to the Bilibili 2018 First Quarter Earnings Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Juliet Yang, Senior Director of Investor Relations. Please go ahead.

接線生：大家好，歡迎參加嗶哩嗶哩2018年第一季財報電話會議。本次會議正在錄音。現在，我將會議交給投資者關係高級總監楊茱莉女士，請她發言。

Thank you, operator.

謝謝接線生。

Please note today's discussion will contain forward-looking statement statements, relating to the future performance of the company and are intended to qualify for the safe harbor from liability, as established by the U.S. Private Security Litigation Reform Act. Such statements are not guaranteed of future performance and are subject to certain risks and uncertainties, assumptions, and other factors. Some of these risks are beyond the company's control, and could cause actual results to differ materially from those mentioned in today's press release and this discussion.

請注意，今天的討論將包含有關公司未來業績的前瞻性陳述，旨在符合美國《私人保全訴訟改革法案》規定的免責條款。此類陳述並非對未來績效的保證，並受某些風險、不確定性、假設和其他因素的影響。其中一些風險超出公司的控制範圍，可能導致實際結果與今天新聞稿和本次討論中提及的結果有重大差異。

A general discussion of risk factors that could affect Bilibili's business and financial results as included in further filings of the company with the Security and exchange commission. The company does not undertake any obligation to update this forward-looking information, except as required by law.

關於可能影響嗶哩嗶哩業務和財務績效的風險因素的總體討論，請參閱本公司向美國證券交易委員會提交的其他文件。除法律要求外，本公司不承擔更新此等前瞻性資訊的義務。

During todays' call, management will also discuss certain non-GAAP financial measures for comparison purpose only. For our definition of non-GAAP financial measures and reconciliation of gap to non-GAAP financial results, please see the 2018 first quarter financial results news release issued earlier today.

在今天的電話會議上，管理階層還將討論一些僅用於比較目的的非GAAP財務指標。有關非GAAP財務指標的定義以及與非GAAP財務結果的差距調節，請參閱今天早些時候發布的2018年第一季財務業績新聞稿。

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 Investor Relations website at ir.Bilibili.com.

提醒各位，本次會議將進行錄音。此外，投資人簡報和本次電話會議的網路直播回放將在嗶哩嗶哩投資者關係網站 ir.Bilibili.com 上提供。

Joining us today on the call from Bilibili's senior management are Mr. Rui Chen, Chairman of the Board and chief executive officer, Ms. Carly Lee, Vice Chairwoman of the Board and Chief Operating Officer, Mr. Sam Fan, Chief Financial Officer. And now, I will turn the call over to Mr. Fan who will read the prepared remarks on behalf of Mr. Chen.

今天參加電話會議的嗶哩嗶哩主管有：董事長兼執行長陳睿先生、副董事長兼營運長李嘉欣女士、財務長范先生。現在，我將把電話交給范先生，他將代表陳睿先生宣讀準備好的演講稿。

Thank you, Juliet, and thank you, everyone for participating on our first earnings call as a public company. I'm pleased to deliver the opening remarks on Mr. Chen's behalf. Our successful IPO on March 28 was an exciting milestone for us. I would like to take this opportunity to thank our supporting shareholders, talented content creators, and loyal users and the employees that helped make this happen. We will continue to work tirelessly to fulfill our mission to enrich the everyday life of young generations in China.

謝謝朱麗葉，也謝謝各位參加我們作為上市公司的首次財報電話會議。我非常榮幸能代表陳先生致開幕詞。 3月28日我們成功上市，這對我們來說是一個令人興奮的里程碑。我想藉此機會感謝所有支持我們的股東、才華橫溢的內容創作者、忠實用戶以及所有為此付出努力的員工。我們將繼續不懈努力，履行我們的使命，豐富中國年輕一代的日常生活。

I'm very pleased to report excellent operational and the financial results for the first quarter 2018, with total revenues of RMB868 million, this marks growth of 105% year-over-year driven by all three of our core business categories: games, advertising and live broadcasting and value-added services. Our community continues to expand with 77 million monthly active users, representing a 35% increase year-over-year. By providing high-quality content and unique user interconnectivity, user can find hours of enjoyment across a diverse set of interests, covering a wide numbers of content categories.In the first quarter, our top five viewed categories were lifestyle, games, entertainment, technology, and anime, taking over 70% of total video views.

我非常高興地向大家報告2018年第一季的卓越營運和財務表現。公司總收入達人民幣8.68億元，年增105%，這主要得益於我們三大核心業務板塊——遊戲、廣告和直播及增值服務——的強勁增長。我們的社群持續壯大，每月活躍用戶達7,700萬，較去年同期成長35%。透過提供高品質的內容和獨特的互聯互通，用戶可以在涵蓋眾多內容類別的廣泛興趣領域中找到數小時的娛樂體驗。第一季度，觀看量排名前五的類別分別是生活風格、遊戲、娛樂、科技和動漫，佔總影片觀看量的70%以上。

Over the years, we have successfully developed a robust online entertainment ecosystem comprising talented content creators and a highly engaged user base. In the first quarter, 89% of our video viewers were contributed by Professional User Generated Video, PUGV. To further encourage our content creators, we initiated a cash incentive program in February of this year. Any content creator with over 1,000 fans is eligible for a cash bonus, for his or her original content submissions, which depend on various matrix including popularity as well as quality feedback from users. We believe this program will bolster our content ecosystem even further, reinforcing Bilibili as one of the largest PUGV platforms in China. The number of active content creator, and their content submission increased 96% and 154% year-over-year, respectively.

多年來，我們成功建立了一個強大的線上娛樂生態系統，匯集了許多才華橫溢的內容創作者和高度活躍的用戶群。今年第一季度，89%的影片觀看量來自專業用戶原創影片（PUGV）。為了進一步鼓勵內容創作者，我們在今年2月啟動了現金獎勵計畫。任何擁有超過1000名粉絲的內容創作者，均可獲得現金獎勵，獎勵金額取決於包括人氣和用戶回饋品質在內的多項指標。我們相信，該計劃將進一步增強我們的內容生態系統，鞏固Bilibili作為中國最大PUGV平台之一的地位。活躍內容創作者的數量和內容投稿量分別較去年同期增加了96%和154%。

In addition to PUGV, we also provide users with licensed content in a number of verticals including: anime, documentary and variety shows. Our business model enables us not to be solely reliant on licensed content to attract users, but rather to use it as addition to enhance our content ecosystem and monetization capability. During the first quarter, we selected several new animation series to promote our premium membership program. Premium membership are entitled to watch these new series one week in advance compare to non-premium members. Our users responded with high enthusiasm-over 2 million orders were placed for this program in Q1. Through this initiative, we believe we can not only offer users better viewing experience, but also promote other value added services, including live broadcasting, as a package in the near future, once users are converted from non-paying to paying users. The early success gives us great confidence in our ongoing monetization effort.

除了PUGV之外，我們還為用戶提供包括動漫、紀錄片和綜藝節目在內的多個垂直領域的正版內容。我們的商業模式並非僅僅依賴正版內容來吸引用戶，而是將其作為補充，以增強我們的內容生態系統和變現能力。第一季度，我們精選了幾部新的動畫影集來推廣我們的高級會員計畫。高級會員可以比非高級會員提前一周觀看這些新劇集。用戶反應熱烈——第一季該計畫的訂單量超過200萬。我們相信，透過這項舉措，我們不僅可以為用戶提供更好的觀看體驗，而且在用戶從非付費用戶轉化為付費用戶後，我們還可以在不久的將來推出其他增值服務，例如直播，並將其打包出售。早期的成功讓我們對持續的變現努力充滿信心。

Now, let's take a closer look at our core businesses: Revenue from our mobile games grew 97% year-over-year led primarily by the continued popularity of Fate/Grand Order or FGO. FGO remains one of China's top-grossing games, and it reached record high monthly grossing revenue in the first quarter. We expect this game to continue to produce stable revenue throughout the year. We are confident that we can replicate the success of FGO to further diversify our game revenue stream. We have a strong pipeline with several thrilling new games planned for launch in the second half of the year, including BanG Dream, a music/role playing game, and two Romance RPG targeted for female audiences: A3! and Wu Fa Chu Peng de Zhang Xin. All of these games boast strong track records in Japan, which we believe is a good indicator for how the games will perform in China. We also have several high quality mobile games in our exclusively-operated games pipeline which are produced by well-known domestic content developers. On the joint-operated game front, we look forward to bringing a member of highly anticipated ACG games including Shining Nikki, Arknights, as well as Crossing Void to our users.

現在，讓我們更深入地了解我們的核心業務：行動遊戲營收年增97%，主要得益於《Fate/Grand Order》（簡稱FGO）的持續火熱。 FGO依然是中國最賺錢的遊戲之一，並在第一季創下了月度收入新高。我們預計這款遊戲將在全年保持穩定的收入。我們有信心複製FGO的成功，進一步拓展我們的遊戲收入來源。我們擁有強大的遊戲開發計劃，下半年將推出多款令人期待的新遊戲，包括音樂角色扮演遊戲《BanG Dream!》以及兩款面向女性玩家的戀愛角色扮演遊戲：《A3!》和《五發一鵬的章心》。所有這些遊戲在日本都取得了良好的成績，我們相信這可以很好地預測它們在中國的表現。此外，我們還有幾款由國內知名內容開發商製作的高品質行動遊戲正在自主營運開發中。在聯合營運遊戲方面，我們期待將備受期待的 ACG 遊戲（包括《閃耀暖暖》、《明日方舟》和《穿越虛空》）帶給我們的用戶。

Our immersive new content, user interaction and a growing community supports our advertising revenue growth of 144% year-over-year in the first quarter. Generation Z is a golden cohort targeted for all major brands. With Bilibili's status as the leading platform for this highly valued demographic, we are the "go-to" platform for advertisers targeting this group of active users. Our users spend considerable time on our platform, averaging 76 minutes per day, generating over 267 million daily video views in the first quarter, an increase of 137% year-over-year. This not only provide us with a built-in audience for advertisers, but also provides us with deep insights into our users' profiles, enabling us to curate the right feed ads. As a result, we believe we have huge room to grow across various advertising solutions. We expect continued growth in brand advertising, as well as our performance-based advertising as we expand our customer base and optimize the algorithm. We believe we are still in early stages of monetization with our advertising business and it has great potential to grow.

我們沉浸式的新內容、用戶互動以及不斷壯大的社區，共同推動了我們第一季廣告收入年增144%。 Z世代是各大品牌夢寐以求的黃金用戶群。 Bilibili作為這個高價值用戶群的領先平台，已成為廣告主觸達該活躍用戶的首選平台。我們的用戶在平台上花費大量時間，平均每天76分鐘，第一季每日影片觀看量超過2.67億次，較去年同期成長137%。這不僅為我們提供了現成的廣告受眾，也讓我們深入了解使用者畫像，以便精準投放廣告。因此，我們相信在各種廣告解決方案方面都擁有巨大的成長空間。隨著用戶群的擴大和演算法的最佳化，我們預期品牌廣告和成效廣告都將持續成長。我們相信，目前我們的廣告業務仍處於獲利初期，未來發展潛力巨大。

Notably, we experience exceptional growth on the number of paying users in the first quarter, demonstrating our heightened monetization potential. Our average monthly paying users reached 2.5 million, a 190% increase year-over-year. The majority of this growth was supported by our monetization progress with live broadcasting and the value-added services, particularly with our newly introduced hosts that fit Bilibili's users' preferences and premium membership program as mentioned earlier. We are encouraged to learn that our users responded well with our monetization initiatives and they have high willingness to pay for quality content and services. As a result, revenue from live broadcasting and VAS business increased by 151% year-over-year.

值得注意的是，我們第一季的付費用戶數量實現了顯著成長，展現了我們強大的變現潛力。月均付費用戶數達250萬，年增190%。這一成長主要得益於我們在直播和增值服務方面的變現進展，特別是我們新推出的符合Bilibili用戶喜好的主播以及之前提到的高級會員計劃。我們很高興地看到，用戶對我們的變現措施反應良好，而且他們非常願意為優質內容和服務付費。因此，直播和增值服務業務的營收年增了151%。

As we move through 2018, we plan to continue to enrich our content offering, improve the user experience and enhance our technologies and infrastructure that thrill our growing community of young minds. In April, we introduced a brand new Bilibili application for OTT platform, aiming to further expand our user reach. At the same time, we plan to strengthen our monetization capabilities by growing our user base and the number of paying users. In these ways that we can best support the expansion of our business while continuing to bring value to the content creators, our users, our community and all of our stakeholders.

展望2018年，我們計畫持續豐富內容，提升使用者體驗，並加強技術和基礎建設，以滿足我們不斷成長的年輕用戶群的需求。 4月，我們推出了全新的Bilibili OTT平台應用，旨在進一步擴大用戶覆蓋率。同時，我們計劃透過增加用戶基數和付費用戶數量來增強獲利能力。透過這些舉措，我們能夠更好地支持業務拓展，並持續為內容創作者、使用者、社群以及所有利害關係人創造價值。

This concludes Mr. Chen's comments. I will now provide a brief overview of our first quarter 2018 financial results.

陳先生的發言到此結束。接下來，我將簡要概述我們2018年第一季的財務表現。

As Mr. Chen stated, our total net revenues increased by 105% to RMB868 million or $138 million year-over-year. With robust growth from all three primary business streams, our revenue further diversified.

正如陳先生所說，我們的淨收入總額年增105%，達到人民幣8.68億元（約1.38億美元）。三大主要業務部門均實現強勁成長，使我們的收入來源更加多元化。

Our mobile games revenue increased by 97%, RMB688 million or $110 million year-over-year, representing 79% of total revenue. The increase was primarily due to the increasing popularity of mobile games such as FGO and Azur Lane.

我們的行動遊戲營收年增97%，達到人民幣6.88億元（約1.1億美元），佔總營收的79%。成長主要得益於《FGO》和《碧藍航線》等行動遊戲的日益普及。

Our Live Broadcasting and VAS revenues increased by 151% to RMB96 million or $15 million, year-over-year representing 11% of the total revenue, mainly attributable to our enhanced monetization efforts and promotion of our live broadcasting and the introduction of our premium membership program.

我們的直播和增值服務收入年增 151% 至人民幣 9,600 萬元（約 1,500 萬美元），佔總收入的 11%，這主要歸功於我們加強了直播的盈利能力和推廣，以及推出了高級會員計劃。

The advertising revenue increased by [144%] (corrected by company after the call) to RMB70 million or $11 million year-over-year representing 8% of the total revenue. The increase was driven by the robust growth of our advertising revenue from brand advertising and the launch of performance based advertising business in December 2017.

廣告收入年增144%（公司在電話會議後更正），達到人民幣7,000萬元（約1,100萬美元），佔總收入的8%。成長主要得益於品牌廣告收入的強勁成長以及2017年12月推出的成效廣告業務。

Our other revenues increased by 65% to RMB13 million or $2 million year-over-year representing 2% of the total revenue. Primarily attributable to an increase in the sales of products through our e-commerce platform.

我們的其他收入年增65%，達到人民幣1,300萬元（約200萬美元），佔總收入的2%。這主要歸功於我們電子商務平台產品銷售額的成長。

Cost of revenue increased by 80% to RMB655 million or $104 million from the same period of 2017. Revenue-sharing cost, a primary driver of cost of revenues, was RMB335 million, or $53 million, representing a 120% increase year-over-year.

營業成本較 2017 年同期成長 80%，達到 6.55 億元（1.04 億美元）。收入分成成本是營業成本的主要驅動因素，為人民幣 3.35 億元（5,300 萬美元），較去年同期成長 120%。

Gross profit increased by 249% to RMB213 million or $34 million, from the same period of 2017.

與 2017 年同期相比，毛利成長 249%，達到 2.13 億元（約 3,400 萬美元）。

Total operating expenses increased by 107% to RMB287 million or $46 million, from the same period of 2017.

與 2017 年同期相比，總營運支出成長 107%，達到 2.87 億元（約 4,600 萬美元）。

Sales and marketing expenses were RMB79 million, or $13 million, representing a 93% increase year-over-year. The increase was primarily attributable to the increased channel and marketing expenses associated with our app, as well as promotional expenses for our online games.

銷售及市場推廣費用為人民幣7,900萬元，約1,300萬美元，較去年同期成長93%。成長主要歸因於應用程式相關的管道及市場推廣費用增加，以及網路遊戲推廣費用的增加。

General and administrative expenses were RMB 103 million or $16 million representing a 140% increase year-over-year. The increase was primarily due to share-based compensation expenses with an IPO condition and an increase in professional service fees.

一般及行政費用為人民幣1.03億元（約1,600萬美元），較去年同期成長140%。成長的主要原因是附帶首次公開募股條件的股權激勵費用以及專業服務費的增加。

Research and development expenses were RMB106 million or $17 million representing a 92% increase year-over-year. The increase was primarily due to increase headcount in research and development.

研發費用為人民幣1.06億元（約1,700萬美元），較去年同期成長92%。成長的主要原因是研發人員數量增加。

Loss from operations was RMB74 million or $12 million compared with RMB78 million in the same period of 2017. Income tax expense was RMB3 million, or $0.5 million, compared with RMB2 million in the same period of 2017.

營業虧損為人民幣7,400萬元（1,200萬美元），而2017年同期為人民幣7,800萬元。所得稅費用為人民幣300萬元（50萬美元），而2017年同期為人民幣200萬元。

Net loss totaled RMB58 million or $9 million for the first quarter of this year, compared with RMB67 million in the same period of last year.

今年第一季淨虧損總計人民幣5,800萬元（900萬美元），去年同期淨虧損為人民幣6,700萬元。

Adjusted net loss which mainly excludes share-based compensation expenses and amortization expense relate to intangible assets acquired through business acquisition, improved by 95% to RMB3 million, or $0.5 million, from RMB60 million in the prior year period.

經調整後的淨虧損（主要不包括股份支付費用和攤銷費用，與透過企業收購獲得的無形資產有關）較上年同期的人民幣6000萬元改善了95%，至人民幣300萬元（50萬美元）。

Basic and diluted net loss per share was RMB1.73. Non-GAAP basic and diluted loss per share were RMB0.94.

基本及攤薄後每股淨虧損為人民幣1.73元。非GAAP基本及攤薄後每股虧損為人民幣0.94元。

As of March 2018, we had cash and cash equivalents, as well as time deposits of RMB1 billion or $168 million compared with RMB 765 million as of December 31, 2017.

截至 2018 年 3 月，我們擁有現金及現金等價物以及定期存款 10 億元人民幣（約合 1.68 億美元），而截至 2017 年 12 月 31 日，該等現金及現金等價物為 7.65 億元人民幣。

Net cash provided by operating activities was RMB471 million, or $75 million, compared with RMB206 million in the same period of 2017.

經營活動產生的淨現金流為人民幣4.71億元，即7,500萬美元，而2017年同期為人民幣2.06億元。

As we look ahead, our financial goals are to continue improving our operational efficiency while further growing our business. With that in mind, we are currently projecting net revenues for the second quarter to be between RMB970 million and RMB1 billion.

展望未來，我們的財務目標是在進一步拓展業務的同時，持續提升營運效率。基於此，我們目前預期第二季淨收入將在人民幣9.7億元至10億元之間。

Thank you for your attention. We would like now to open the call to your questions. Operator, please go ahead.

謝謝您的關注。現在我們進入問答環節。接線員，請提問。

Thank you. Ladies and gentlemen, if you wish to ask a question today, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press the pound or hash key.

謝謝。女士們、先生們，如果您今天想提問，請按電話上的星號鍵1，然後等待播報您的名字。如果您想取消提問，請按井號鍵或井號鍵。

For the benefit of all participants on today's call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English.

為了今天所有與會者的利益，如果您想用中文向管理層提問，請立即用英文重複您的問題。

Once again, it is star one if you wish to ask a question today. Your first question comes from the line of Daniel Chen from JPMorgan. Please ask your question.

今天提問環節再次由一號提問。第一個問題來自摩根大通的Daniel Chen。請提問。

(Spoken in Foreign Language).

（用外語說）

Hi. I will translate myself. First, the question is regarding our user acquisition strategy. Our MAUs had grown very decently sequentially on a year-over-year basis this quarter. Could the management provide some color on your strategies to further grow your user base in the Generation Z?

您好。我來翻譯一下。首先，我想問的是我們的用戶獲取策略。本季我們的每月活躍用戶數（MAU）年增率非常可觀。管理階層能否詳細說明一下，為了進一步拓展Z世代用戶群，你們有哪些策略？

Second question is regarding our gaming revenue including live broadcasting, advertisement, and also membership. This actually grew very strong -- growing strong sequentially on a year-over-year basis. So, what's management view on our revenue breakdown in the three to five years? Are we expecting that this had to account for a much bigger -- much bigger portion?

第二個問題是關於我們的遊戲收入，包括直播、廣告和會員收入。這部分營收成長非常強勁，逐年穩定成長。那麼，管理階層對未來三到五年內的收入組成有何看法？我們是否預期這部分收入會佔到更大的比例？

The third question is regarding to our support to the content providers. So, we have a scheme to do the revenue sharing with all the content provider. So, could we have some update on this front? And what's our strategy to motivate all the content creators to create the valuable user-generated content on our platform?

第三個問題是關於我們對內容提供者的支援。我們有一個與所有內容提供者進行收益分成的方案。請問這方面有什麼最新進展嗎？我們有什麼策略來激勵所有內容創作者在我們的平台上創作有價值的用戶生成內容？

Thank you.

謝謝。

Thank you, Daniel.

謝謝你，丹尼爾。

(Spoken in Foreign Language).

（用外語說）

Okay. I'll translate for [Mr. Li] for the first question. As you can see, our user growth is very healthy and on a stable rate and Mr. Chen concluded three reasons. One is our very healthy PUGV ecosystem that we have a very positive virtual cycle that we have more PUGV content creator, creating more content, attracting more users.

好的。我來翻譯李先生的第一個問題。如您所見，我們的用戶成長非常健康且穩定，陳先生總結了三個原因。第一，我們擁有非常健康的PUGV生態系統，形成了一個非常積極的虛擬循環：更多的PUGV內容創作者創造更多內容，進而吸引更多用戶。

As we are focused on the depth of the categories, we're also expanding the content category. For example, in this quarter, the entertainment verticals are expanding not much faster than our traditional ACG content category as we expanded to more content vertical that will attract more content creators to create more high-quality contents. So, in that way, we don't actually have to spend a lot of money to stimulate the growth of users but rather to rely on our healthy ecosystem. That's the first point.

由於我們專注於深化產品類別，因此也在拓展內容類別。例如，本季娛樂類垂直領域的成長速度雖然不如傳統的ACG內容類別，但我們拓展了更多垂直領域的內容，這將吸引更多內容創作者創作更多優質內容。因此，我們無需投入大量資金來刺激用戶成長，而是可以依靠我們健康的生態系統。這是第一點。

The second point is we also focus on a lot of the new content that attracts young minds attention. For example, in the livestreaming category, we are actively searching for new mobile games that attract a lot of users' attention. We also invested in our own E-Sports team which we called BLG. All of these contents are also driving the growth of our MAUs.

第二點是，我們也十分關注能夠吸引年輕用戶的新內容。例如，在直播領域，我們積極尋找能夠吸引大量用戶的熱門手機遊戲。此外，我們也投資組建了自己的電競戰隊BLG。所有這些內容都推動了我們每月活躍用戶數的成長。

And third point, as you can see, we have an excellent long-term and short-term user retention number. At the same time, we're also actively expanding our channel acquisitions, for example, for pre-download, pre-installment or download on app stores through these three areas. That's how we achieved our sustainable user growth.

第三點，如您所見，我們的長期和短期用戶留存率都非常出色。同時，我們也積極拓展用戶獲取管道，例如透過這三個途徑進行預先下載、預先安裝或應用程式商店下載。正是這些舉措，讓我們實現了永續的用戶成長。

(Spoken in Foreign Language).

（用外語說）

Okay. I'll translate for Mr. Chen.

好的，我來幫陳先生翻譯。

Mr. Chen gave three reasons that's how we're going to help our content creator to better incentivize them. So, as all of you may know that 89% of our daily [BD] are contributed by our PUGV. The content creates the way that how we incentivize our content creators remains our top priority.

陳先生給了三個理由，說明我們將如何更好地激勵內容創作者。大家都知道，我們每日[BD]的89%都來自我們的PUGV（使用者生成內容）。內容創作是我們激勵內容創作者的方式，而這仍然是我們的首要任務。

So, the first point is we have a very comprehensive service system to support the content creation of our content creators that would supply them with full access of our backstage data, supply them with tools to analyze how their work has been viewed by different users and what's their feedback and how many of them were from which area by a number of matrix to help them to better analyze and help them to create better content. We also have a systematic training program to help to train newcomers to lead them on the way of becoming top content creators.

首先，我們擁有非常完善的服務體系，為內容創作者提供全方位的支持，包括後台數據訪問權限、分析工具以及用戶評價工具，幫助他們更好地分析作品在不同用戶群體中的瀏覽情況、收集反饋信息，並通過一系列矩陣分析反饋來源地和數量，從而提升內容質量。此外，我們也提供有系統的培訓項目，幫助新人成長為頂尖的內容創作者。

And second, as the content creator incentivize program that we launched in February this year, as you may know, the top content creator can make decent income on our platform. But what we focus more is how do we bring the content creators that just started or in the middle area, to bring them to the top.

其次，如您所知，我們今年二月推出了內容創作者激勵計劃，頂尖內容創作者可以在我們的平台上獲得可觀的收入。但我們更關注的是如何幫助那些剛起步或處於中期階段的內容創作者，讓他們也能達到頂尖水準。

As we mentioned during the conference call that we provide a cash incentivize program for the content creator with 1000 fans and the cash bonuses is based on the popularity as well as the positive user feedback from this video, not just directly linked with what kind of income that we can receive from this video.

正如我們在電話會議中提到的，我們為擁有 1000 名粉絲的內容創作者提供現金獎勵計劃，現金獎勵取決於視頻的受歡迎程度以及用戶的積極反饋，而不僅僅是與我們能從該視頻中獲得的收入直接相關。

So, the effect of the incentivize programs were very clear in the Q1. The number of active content creator and their content submission number increased significantly year-over-year. And going forward will also supply some -- much more comprehensive incentivize programs that will support them from not just the cash basis but also provide them with marketing tools and help them to achieve better economic benefit based on various matrix. Not simply rely on the traffic income.

因此，激勵計劃的效果在第一季非常明顯。活躍內容創作者的數量及其內容提交量均較去年同期成長顯著。未來，我們還將提供更全面的激勵計劃，不僅提供現金支持，還將提供行銷工具，並根據各種指標幫助他們獲得更好的經濟效益，而不僅依賴流量收入。

Okay. I will take your question. If you take a look at revenue mix in 2017 that there were 82% of revenue from games, 7% from the live broadcasting and 7% from advertising revenue.

好的，我來回答你的問題。如果你看一下2017年的收入組成，你會發現其中82%的收入來自遊戲，7%來自直播，7%來自廣告收入。

We are happy to see that we -- when we achieved the record-high mobile game revenue in the first quarter of this year, our revenue] further diversified because we have our user base that have high willingness to pay for quality content and services and we have great potential for advertising business as we mentioned in our press release.

我們很高興地看到，今年第一季度，我們的行動遊戲收入創下歷史新高，我們的收入來源進一步多元化，因為我們的用戶群對高品質的內容和服務有著很高的付費意願，而且正如我們在新聞稿中提到的，我們在廣告業務方面也具有巨大的潛力。

Now, the revenue mix does contributions for live broadcasting. They are 11% and 8% from the advertising revenues. We proceeded after three to five years, about 50% of the total revenue on the online game and this is 30% from advertising and 20% on live broadcasting and value-added services. Does that answer your question?

目前，直播收入佔11%，廣告收入佔比為8%。經過三到五年的發展，網路遊戲總收入的50%左右將來自直播和增值服務，其中30%來自廣告，20%來自直播和增值服務。這樣回答您的問題了嗎？

Thank you. That's very helpful.

謝謝，這很有幫助。

Your next question today comes from the line of Alex Poon from Morgan Stanley. Please ask your question.

今天的下一個問題來自摩根士丹利的Alex Poon。請提問。

(Spoken in Foreign Language).

（用外語說）

I'll translate my questions. First question is regarding MAU and content creator growth. I would like to understand the split of this MAU and content creator growth by age and also by geographical region.

我會翻譯我的問題。第一個問題是關於每月活躍用戶數（MAU）和內容創作者成長的。我想了解按年齡和地理區域劃分的月活躍用戶數和內容創作者增長。

And my second question is regarding the competitive landscapes on both the game side and the shared video side. PUBG ramped up very strongly in terms of DAU. Have you seen any impact from PUBG affecting your game user?

我的第二個問題是關於遊戲和影片分享領域的競爭格局。 PUBG 的每日活躍用戶數 (DAU) 成長非常強勁。您是否發現 PUBG 對您的遊戲用戶有任何影響？

And second is for shared video, the time spent in DAU growth is very strong for these platforms. Do you see any challenge from them taking your user time spent or will create pressure for your MAU growth in the future? Thank you very much.

其次，就影片分享而言，這些平台的用戶日活躍用戶成長非常強勁。您認為用戶觀看時長增加是否會對您的月活躍用戶成長構成挑戰，或者未來是否會對每月活躍用戶成長造成壓力？非常感謝。

(Spoken in Foreign Language).

（用外語說）

Okay. I'll translate the first question. So, as we further -- our business grow, in 2018, our daily average new user increase as actually accelerated compared to last year. And if we analyze the data in Q1, the new users, we see the portion that comes from above age 19 is increasing and we also see a clear penetration from lower tier city, more users from Tier 3 and Tier 4 city are coming in -- this is also in line with how the pop culture are penetrating from more developed area to less developed area.

好的。我來翻譯第一個問題。隨著我們業務的進一步發展，2018年我們的日均新增用戶成長速度實際上比去年更快。如果我們分析第一季的數據，就會發現19歲以上用戶的比例正在上升，而且我們也看到來自低線城市的用戶滲透率明顯提高，更多來自三四線城市的用戶湧入——這與流行文化從發達地區向欠發達地區滲透的趨勢相符。

And [under interest scope], we noticed that a lot of our new user have more extended interest and how this compared to our old users and we can see that they have much wider habits and interest, for example, in entertainment and documentary, those verticals are growing very nicely, thanks to our new users that we've expanded in scope and that is also a good sign which means we're extending our content offering as well as our target audience.

在興趣範圍方面，我們注意到許多新用戶的興趣範圍更廣，與老用戶相比，我們可以看到他們的習慣和興趣更加廣泛，例如在娛樂和紀錄片方面，這些垂直領域發展得非常好，這要歸功於我們擴大了用戶範圍的新用戶，這也是一個好兆頭，意味著我們正在擴展內容供應和目標受眾。

And lastly is from the platforms, we also see the Android users are coming -- are increasing more than iOS users. This is also in line with how this is divided in China, where there's clearly more Android user entering the market.

最後，從平台來看，我們也看到安卓用戶數量正在成長，而且成長速度超過了iOS用戶。這與中國的情況也相符，中國市場顯然有更多的安卓用戶正在湧入。

(Spoken in Foreign Language).

（用外語說）

Okay. So, on the competition landscape on game wise, clearly, there's no impact from the PUBG games with our games. It's obvious that even before PUBG, there's Honor of Kings and League of Legend and our game has been performed steadily with a very stable growth rate.

好的。就遊戲競爭格局而言，很明顯，PUBG 對我們的遊戲沒有任何影響。事實上，即使在 PUBG 出現之前，我們也有《王者榮耀》和《英雄聯盟》，而我們的遊戲一直保持著非常穩定的成長速度。

The logic behind our game of business is different from other regular game companies that is our business model is to -- is to find our existing massive user base interest and habits and find the right content, right game that fits their interests and recommend it to them.

我們的遊戲商業邏輯與其他普通遊戲公司不同，我們的商業模式是——找到我們現有的龐大用戶群的興趣和習慣，找到合適的內容、合適的遊戲，並推薦給他們。

So, we will obviously continue to -- continue to bring new games and offer the games to our users' benefit, and there's very little impact from how these games evolve outside our ecosystem.

所以，我們顯然會繼續推出新遊戲，並讓用戶受益，而這些遊戲在我們生態系統之外的發展變化對我們影響甚微。

And from -- on the data point, you can see our users, our active game users, our income and their time spent are actually growing. This also supports our theory.

從數據點可以看出，我們的用戶數量、活躍遊戲用戶數量、收入以及用戶遊戲時長都在增加。這也印證了我們的理論。

(Spoken in Foreign Language).

（用外語說）

Okay. On the contrary, actually, the emerging of new pop games, actually, has a positive impact on our PUGV system as well as our live broadcasting. As you may know, that game is our number two top viewed content category on our video platform and games live broadcasting is actually number one in terms of content category on our broadcasting vertical.

好的。恰恰相反，新熱門遊戲的出現實際上對我們的PUGV系統以及直播業務都有正面的影響。您可能知道，遊戲是我們視訊平台上觀看量排名第二的內容類別，而遊戲直播在我們直播頻道的內容類別中排名第一。

So, once there's a new emerging pop game that naturally will lead more content submission and more viewers viewing the live broadcasting. It actually has a much more positive impact on our business. And we'll welcome more popular games in the market.

因此，一旦出現一款新的熱門遊戲，自然會帶來更多的內容投稿和更多的直播觀眾。這實際上對我們的業務有著更積極的影響。我們也歡迎更多熱門遊戲進入市場。

(Spoken in Foreign Language).

（用外語說）

Okay. on your third question on the impact of short video application whether they have impact our business, the answer clearly is no. From the data wise, we can see that no matter if the monthly active users, their time spent, our community retention rates, or the engagement level on our community, all of this data are growing very healthy.

好的。關於您提出的第三個問題，即短視頻應用是否對我們的業務產生了影響，答案顯然是否定的。從數據來看，無論是每月活躍用戶數、用戶使用時長、社群留存率或社群參與度，所有這些數據都呈現非常健康的成長態勢。

And the reasons why we are able to do that is we are self-sustaining ecosystem. All of this content is not produced by several editors. It's actually produced by our content creators, we believe there's no one who understand better than our users' need than the content creator themselves and they follow what's the most trendy and what's most interesting in the market and produce that content to attract our users. That's why we're always upkeep in the most interesting and popular content on our platform.

我們之所以能夠做到這一點，是因為我們擁有一個自給自足的生態系統。所有內容並非由多個​​編輯製作，而是由我們的內容創作者親自打造。我們相信，沒有人比內容創作者更了解使用者的需求。他們跟上市場潮流，關注最熱門、最有趣的內容，並以此吸引用戶。也因為如此，我們的平台始終擁有最有趣、最熱門的內容。

And Bilibili have nine years operating history. This type of new trendy applications or new formats of media we've seen a dozen times and none of those have affected our business progress. Hope that answers your question.

Bilibili已經運作了九年。這類新潮的應用或新的媒體形式我們已經見過不下十次了，但它們都沒有影響到我們的業務發展。希望這能解答你的疑問。

(Spoken in Foreign Language).

（用外語說）

Once again, ladies and gentlemen, if you wish to ask a question today, it's star one on your telephone. Your next question today comes from the line of Eddie Leung from Merrill Lynch. Please ask your question.

各位女士、先生，如果您今天想提問，請按電話上的星號1。今天的下一個問題來自美林證券的梁先生。請提問。

Hi. Good morning. Thank you for taking my questions. (Spoken in Foreign Language).

您好，早安。感謝您回答我的問題。 （外語）

So, I have two questions. The first one is a little bit about content. It seems like a lot of internet companies, whether they are short form or long form media companies or soft and large internet platforms, recently talking about investment in animations and comic content. So, I'm just wondering what's your thought in it.

我有兩個問題。第一個問題跟內容有關。最近似乎很多網路公司，無論是短影片還是長影片媒體公司，或是小型和大型網路平台，都在談論投資動畫和漫畫內容。所以，我想知道您對此有何看法。

And then secondly, just a small question about your game revenues. So, we know that the growth has been driven by self-operated games, so just wondering what's the trend of the jointly distributed games recently? Thank you.

其次，還有一個關於遊戲收入的小問題。我們知道成長主要由自營遊戲推動，那麼想了解近期聯合發行遊戲的趨勢如何？謝謝。

(Spoken in Foreign Language).

（用外語說）

Okay. The first -- for the first question, Mr Chen thinks the competition has always been there especially from all the major video platforms including Tencent IT , IQIYI and YouKu. There has been and will be investing in the anime or ACG area and we don't think that we'll change the competition landscape as more of an indication of how this industry has great growth potential and as it's likely to continue to grow.

好的。第一個問題，陳先生認為競爭一直存在，尤其來自包括騰訊、愛奇藝和優酷在內的所有主流視訊平台。過去和將來都會有公司投資動漫或ACG領域，我們認為這不會改變競爭格局，反而顯示該產業具有巨大的成長潛力，並且很可能會繼續成長。

(Spoken in Foreign Language).

（用外語說）

Okay. So, the reason you asked this question is probably you've heard some of the players are extending their purchase into some of the animation license content. Well, Mr. Chen wants to emphasize the reason we are still strong in the ACG area is not because we spend a lot -- the most -- [number one] amounts of money in terms of acquiring license content. The reason is because we are this ACG evolver community, we have this community first. Then we decided to expand by acquiring more licensed content.

好的。您問這個問題，可能是因為您聽說一些玩家正在將購買範圍擴大到一些動畫授權內容。陳先生想強調的是，我們之所以在ACG領域保持強勁勢頭，並非因為我們在購買授權內容方面投入了大量資金——或者說，投入了最多的資金。真正的原因是，我們是一個ACG發展社區，我們首先擁有這個社區。然後，我們才決定透過購買更多授權內容來拓展業務。

And we believe that ACG was the best -- the majority of ACG lover and ACG content creators are all based on Bilibili. They have interest community on our platform and this market position is not something that somebody can spend a little bit money on the content -- a licensed content can change it.

我們相信ACG是最好的——絕大多數ACG愛好者和ACG內容創作者都聚集在嗶哩嗶哩平台上。他們在我們的平台上擁有興趣社群，而這種市場地位並非花點小錢就能改變的——獲得授權的內容就能改變一切。

And to answer your second question. Currently, we have about 127 jointly operated games and they contribute about 11% of the total game revenue. So, the growth trend for the jointly operated game is also very well in the first quarter.

至於你的第二個問題，目前我們有大約127款合作營運的遊戲，它們貢獻了約11%的遊戲總收入。因此，合作運營遊戲在第一季的成長趨勢也非常好。

Thank you.

謝謝。

Your next question today comes from the line of Thomas Chung from Credit Suisse. Please ask your question.

今天的下一個問題來自瑞士信貸的Thomas Chung。請提問。

(Spoken in Foreign Language).

（用外語說）

Maybe I translate my questions into English. Good morning, management. I have two questions. The first question is our overseas strategies over the next couple of years. And my second question is about the number of advertisers in Q1 and what are the advertising categories? Thank you.

或許我應該把我的問題翻譯成英文。早安，管理層。我有兩個問題。第一個問題是關於未來幾年我們的海外策略。第二個問題是關於第一季的廣告客戶數量以及廣告類別。謝謝。

(Spoken in Foreign Language).

（用外語說）

Thanks, Thomas, for the question. Let me translate. On an overseas expansion strategy, from a long-term perspective, of course, we'll definitely focus on the international market as what Bilibili is doing as focused on the fan entertainment industry that attracts young mind from all over the world as long as they have their specific interests or habits.

謝謝托馬斯的提問。讓我來翻譯一下。關於海外擴張策略，從長遠來看，我們當然會像嗶哩嗶哩一樣，專注於國際市場，致力於打造一個能夠吸引世界各地有特定興趣或習慣的年輕人的粉絲娛樂產業。

But in a short term, our main focus will definitely remain in Mainland China, as China being one of the largest single economy in the world and enjoys the highest economic growth rate. And we have been developing in [Mainland] for nine years and we have already established our leading position. In the short term, we'll definitely focus on the domestic market.

但短期內，我們的主要重點仍將放在中國大陸，因為中國是世界最大的單一經濟體之一，也是經濟成長最快的國家之一。我們在中國大陸發展了九年，並確立了領先地位。短期內，我們一定會專注於國內市場。

And the second question, will be answered by --

第二個問題將由…回答。

Yes. To answer second question, currently, we don't have much advertising customers as we've just started to monetize our VAS and the top five or top two by that customer for the brand advertising are through the brokerage the international business and comics, and for VAS the education, e-commerce, Internet services.

是的。回答第二個問題，目前我們的廣告客戶不多，因為我們才剛開始透過增值服務獲利，而品牌廣告方面排名前五或前兩名的客戶是透過經紀公司進行國際業務和漫畫推廣的，而增值服務方面則是教育、電子商務和網路服務。

Thank you.

謝謝。

Ladies and gentlemen, that concludes the question and answer session. I would now like to turn the conference back to management for any additional or closing remarks.

女士們、先生們，問答環節到此結束。現在我把會議交還給管理階層，請他們再作補充或總結發言。

Thank you, once again, for joining us today. If you have further questions, please contact Juliet Yang, Bilibili's Senior IR Director or TPG Investor relations. IR contact information in both China and the U.S. can be found on today's press release. Have a great day.

再次感謝您今天蒞臨本次活動。如有任何疑問，請聯絡嗶哩嗶哩高級投資者關係總監楊茱莉或TPG投資者關係部。您可以在今天的新聞稿中找到中國和美國投資者關係部的聯絡資訊。祝您今天愉快！