Bilibili Inc (BILI) 2018 Q2 法說會逐字稿

Good day, and welcome to the Bilibili 2018 Second Quarter Earnings Conference Call.

美好的一天，歡迎來到 Bilibili 2018 年第二季度財報電話會議。

Today's conference is being recorded.

今天的會議正在錄製中。

At this time, I would like to turn the conference over to Juliet Yang, Senior Director of Investor Relations.

此時，我想將會議轉交給投資者關係高級總監 Juliet Yang。

Please go ahead.

請繼續。

Thank you, operator.

謝謝你，接線員。

Please note the discussion today will contain forward-looking statements relating to future performances of the company and are intended to qualify for Safe Harbor from liability as established by the U.S. Private Securities Litigation Reform Act.

請注意，今天的討論將包含與公司未來業績相關的前瞻性陳述，旨在符合美國私人證券訴訟改革法案規定的安全港免責條件。

Such statements are not guarantees of future performances and are subject to certain risks and uncertainties, assumptions and other factors.

此類陳述不是對未來業績的保證，並受某些風險和不確定性、假設和其他因素的影響。

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.

其中一些風險超出了公司的控制範圍，可能導致實際結果與今天的新聞稿和本次討論中提到的結果大不相同。

A general discussion of the risk factors that could affect Bilibili's business and financial results is included in certain filings of the company with the Securities and Exchange Commission.

關於可能影響 Bilibili 業務和財務業績的風險因素的一般性討論包含在公司向證券交易委員會提交的某些文件中。

The company does not undertake any obligation to update this forward-looking information, except as required by law.

除非法律要求，否則公司不承擔更新此前瞻性信息的任何義務。

During today's call, management will also discuss certain non-GAAP financial measures for comparison purpose only.

在今天的電話會議中，管理層還將討論某些非公認會計準則財務指標，僅供比較。

For a definition of non-GAAP financial measures and a reconciliation of GAAP to non-GAAP financial results, please see the 2018 second quarter financial results news release issued earlier today.

有關非 GAAP 財務指標的定義以及 GAAP 與非 GAAP 財務業績的對賬，請參閱今天早些時候發布的 2018 年第二季度財務業績新聞稿。

As a reminder, this conference is being recorded.

提醒一下，本次會議正在錄製中。

In addition, an investor presentation and a webcast replay of this conference call will be available on Bilibili Investor Relations website at ir.bilibili.com.

此外，Bilibili 投資者關係網站 ir.bilibili.com 上將提供投資者介紹和本次電話會議的網絡重播。

Joining us today on the call from Bilibili senior management are Mr. Rui Chen, Chairman of the Board and Chief Executive Officer; Ms. Carly Li, Vice Chairwoman of the Board and Chief Operating Officer; and Mr. Sam Fan, Chief Financial Officer.

今天應Bilibili高級管理層的電話加入我們的是董事會主席兼首席執行官陳睿先生；副董事長兼首席運營官李嘉玲女士；以及首席財務官 Sam Fan 先生。

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

現在我將把電話轉給范先生，范先生將代表陳先生宣讀準備好的講話。

Thank you, Juliet, and thank you, everyone, for participating in today's second quarter earnings call.

謝謝朱麗葉，謝謝大家參加今天的第二季度財報電話會議。

I'm pleased to deliver today's opening remarks on behalf of Mr. Chen.

我很高興代表陳先生髮表今天的開幕詞。

We are proud to announce another solid quarter with strong top line growth and the continued user expansion.

我們很自豪地宣布又一個穩健的季度實現了強勁的收入增長和持續的用戶擴張。

Total revenues for the second quarter reached RMB 1 billion, representing an increase of 76% year-over-year.

第二季度總收入達到人民幣10億元，同比增長76%。

Each of our core business contributed to those gains, with growth across our games, advertising and live broadcasting, and the value-added services segments.

我們的每一項核心業務都為這些收益做出了貢獻，我們的遊戲、廣告和直播以及增值服務領域都有增長。

The key to our success is the active growth of our community.

我們成功的關鍵是我們社區的積極發展。

Our average monthly active users grew by 30% year-over-year or 7.6 million quarter-over-quarter, reaching 85 million in the second quarter.

我們的平均每月活躍用戶同比增長 30% 或環比增長 760 萬，第二季度達到 8500 萬。

Mobile MAUs grew even faster, increasing 39% year-over-year to 71 million.

移動 MAU 增長更快，同比增長 39% 至 7100 萬。

The strong growth momentum trend in the second quarter continued as we entered summer, where we achieved record high MAU of 98 million in July, beyond our expectations.

隨著我們進入夏季，第二季度強勁的增長勢頭繼續保持，我們在 7 月份實現了創紀錄的 9800 萬 MAU，超出了我們的預期。

While we do expect to see some one-off impacts to our new users acquisition in August, based on our app download being temporarily suspended from certain app stores in China from July 26 to August 25.

雖然我們確實預計 8 月份的新用戶獲取會受到一些一次性的影響，但基於我們的應用程序下載在 7 月 26 日至 8 月 25 日期間在中國的某些應用程序商店被暫時暫停。

Our overall user engagement and user retention rates remains high.

我們的整體用戶參與度和用戶保留率仍然很高。

We are in the process of implementing better content monitoring, including a thorough self-inspection and increasing the number of our content auditor personnel.

我們正在實施更好的內容監控，包括徹底的自我檢查和增加我們的內容審核人員的數量。

We will continue to work closely with relevant government authorities on an ongoing basis to improve the management and operations of our business.

我們將繼續與相關政府部門持續密切合作，以改善我們業務的管理和運營。

With our app being fully restored in all app stores on August 25, we are actively exploring ways to attract new users, and we are confident in our ability to resume our user growth momentum going forward.

隨著我們的應用於 8 月 25 日在所有應用商店中全面恢復，我們正在積極探索吸引新用戶的方法，我們對未來恢復用戶增長勢頭的能力充滿信心。

Content remains the cornerstone of our business.

內容仍然是我們業務的基石。

We continue to attract and engage users with a variety of content in a broad array of categories.

我們繼續通過各種類別的各種內容來吸引和吸引用戶。

Entertainment, lifestyle, game, anime and the technology were the top 5 most popular content categories during the second quarter.

娛樂、生活方式、遊戲、動漫和科技是第二季度最受歡迎的前 5 個內容類別。

Our users on average spent 75 minutes daily on Bilibili, excluding time spent on Bilibili mobile games.

我們的用戶平均每天在 Bilibili 上花費 75 分鐘，不包括在 Bilibili 手游上花費的時間。

Our vast pool of talented content creators continues to be the driving force in video content creation.

我們龐大的才華橫溢的內容創作者庫繼續成為視頻內容創作的驅動力。

During the second quarter, 89% of our viewed videos came from Professional User Generated Video or PUGV.

在第二季度，我們觀看的視頻中有 89% 來自專業用戶生成視頻或 PUGV。

Beginning this year, we initiated a number of programs to provide better, more layered support for our content creators, specifically in tutoring, cash incentive and per-project basis services to new, mid and top content creators.

從今年開始，我們啟動了一些計劃，為我們的內容創作者提供更好、更有層次的支持，特別是在輔導、現金獎勵和針對新、中、頂級內容創作者的每個項目基礎服務方面。

These initiatives are designed to further expand our cycle of highly skilled content creators while simultaneously supporting our current pool of creators, encouraging them to stretch the boundaries of their imagination.

這些舉措旨在進一步擴大我們高技能內容創作者的周期，同時支持我們當前的創作者群體，鼓勵他們拓展想像力的界限。

Furthermore, to better serve mobile users, which account for 84% of our total MAU, we introduced new mobile-friendly functions, such as mobile content submission as well as full adaption for content that is in vertical form.

此外，為了更好地服務占我們總 MAU 84% 的移動用戶，我們引入了新的移動友好功能，例如移動內容提交以及對垂直形式內容的全面適應。

These efforts yielded a number of year-over-year gains in the second quarter, including a 91% increase in the number of average monthly active content creators a 131% increase in their content submissions and a 117% increase in the number of content creators with over 10,000 fans.

這些努力在第二季度實現了多項同比增長，包括平均每月活躍內容創作者數量增加 91%，內容提交數量增加 131%，內容創作者數量增加 117%擁有超過10,000名粉絲。

In addition to PUGV, we are strengthening our content offerings by bringing high-quality license content to our community, primarily in anime and documentary.

除了 PUGV 之外，我們還通過向我們的社區（主要是動漫和紀錄片）提供高質量的許可內容來加強我們的內容產品。

Our business model enable us to not be solely relied on licensed content to attract users but rather to use it as addition to enhance our content ecosystem and monetization capabilities.

我們的商業模式使我們能夠不僅僅依靠授權內容來吸引用戶，而是將其用作增強我們的內容生態系統和貨幣化能力的補充。

Notably, our self-produced food documentary series Chuan was an instant success after its release in June, generating over 36 million views.

值得一提的是，我們自製的美食紀錄片系列《傳》在 6 月上映後一炮而紅，點擊量超過 3600 萬。

Other licensed content, such as anime and drama, are also being well received by our users and have become the primary driving force of our premium membership program.

其他授權內容，如動漫和戲劇，也受到我們用戶的好評，並已成為我們高級會員計劃的主要推動力。

As of the end of June, we had over 2 million subscribers to our premium membership services.

截至 6 月底，我們的高級會員服務擁有超過 200 萬訂戶。

This model is working.

這個模型正在運行。

And we will look to bring a number of other high-quality content to our community in the coming quarters.

在接下來的幾個季度中，我們將尋求為我們的社區帶來許多其他高質量的內容。

We are also expanding our footprint in the eSports arena, as the third most popular content vertical on our platform.

我們還在電子競技領域擴大我們的足跡，作為我們平台上第三大最受歡迎的垂直內容。

High-quality game content, particularly eSports related content is attracting more and more users.

優質的遊戲內容，尤其是電競相關內容正在吸引越來越多的用戶。

At the end of 2017, we formed our own eSports club, called "Bilibili Gaming" or "BLG", along with our first team, which holds one of the 14 spots in Tencent's League of Legend Pro League, or LPL.

在 2017 年底，我們與我們的第一支隊伍一起成立了自己的電競俱樂部，名為“Bilibili Gaming”或“BLG”，這支隊伍擁有騰訊英雄聯盟職業聯賽或 LPL 的 14 個席位之一。

We also own the live-streaming rights to all LPL matches.

我們還擁有所有 LPL 比賽的直播權。

In the first half of 2018, we had accumulated over 800 million page views from all LPL-related live streaming.

2018年上半年，我們所有LPL相關直播的頁面瀏覽量累計超過8億。

We have also formed a Player's Unknown Battle Ground team and a QQ Speed team, with a goal of providing more thrilling games to our users, and reinforcing our leading position as a principal game content creator in China.

我們還組建了玩家未知戰場團隊和QQ飛車團隊，旨在為用戶提供更多刺激的遊戲，並鞏固我們作為中國主要遊戲內容創作者的領先地位。

Turning to the second pillar of our business community.

轉向我們商業社區的第二個支柱。

Over the years, we have nurtured an encouraging and engaged community environment.

多年來，我們培育了一個鼓勵和參與的社區環境。

This is one of our most distinguishing attributes, setting us apart from other video platforms.

這是我們最顯著的屬性之一，使我們有別於其他視頻平台。

We continue to see a growing trend of engagement and stable retention rate as we improve our AI and Big-Data-powered recommendation efficiency.

隨著我們提高人工智能和大數據驅動的推薦效率，我們繼續看到參與度和穩定保留率的增長趨勢。

Social functions such as micro blog "bilibili moments" enable users to engage and interact with their friends and their favorite content creators in a much easier and a dynamic way.

微博“bilibili 時刻”等社交功能使用戶能夠以更輕鬆、更動態的方式與朋友和喜歡的內容創作者互動。

In the second quarter, our users, on average, generated over 310 million daily video views and 640 million monthly interactions through bullet chats, comments, likes, Bilibili moment posts.

在第二季度，我們的用戶通過彈幕、評論、點贊、嗶哩嗶哩時刻平均每天產生超過 3.1 億次視頻觀看和 6.4 億次互動。

The number of official members who passed our 100-question test continues to grow reaching 38 million in the second quarter, representing a 44% increase year-over-year, with an 80% 12th-month retention rate.

通過我們 100 題測試的官方會員數量在第二季度繼續增長，達到 3800 萬，同比增長 44%，第 12 個月的保留率為 80%。

Our official members are even more loyal and engaged than our non-official members, leveraging our strategy initiative, engaging content and vibrant community.

我們的官方成員比我們的非官方成員更加忠誠和參與，利用我們的戰略倡議、引人入勝的內容和充滿活力的社區。

We are confident in our ability to continue to attract and retain more users.

我們對繼續吸引和留住更多用戶的能力充滿信心。

With that overview, I'd like to take a few moments to review operations within each of our core businesses.

有了這個概述，我想花點時間回顧一下我們每個核心業務的運營情況。

Revenues from our mobile games grew 61% year-over-year to RMB 791 million, led primarily by the rampant popularity of Fate/Grand Order, or FGO, and Azur Lane.

我們的手機遊戲收入同比增長 61% 至人民幣 7.91 億元，主要受 Fate/Grand Order 或 FGO 和 Azur Lane 的火爆帶動。

FGO's growth continued to be stable, and we are excited to celebrate the game's 2nd anniversary in this September, followed by major content updates planned for November.

FGO 的增長繼續保持穩定，我們很高興在今年 9 月慶祝該遊戲的 2 週年，隨後計劃在 11 月進行重大內容更新。

We have also successfully renewed exclusive license agreement for FGO with Aniplex, so that we can continue to provide more exciting contents to all of our players.

我們也與 Aniplex 成功續簽了 FGO 的獨家授權協議，讓我們可以繼續為所有玩家提供更多精彩內容。

Turning to our pipeline of new games, on the exclusively licensed games front, besides some of the games we have previously discussed, such as BanG Dream, A3!

談到我們的新遊戲管道，在獨家授權遊戲方面，除了我們之前討論過的一些遊戲，例如 BanG Dream、A3！

and Wu Fa Chu Peng de Zhang Xin, we are delighted to announce that we are bringing 2 more highly rated ACG games to our users: Princess Connect: Re Dive, a thrilling RPG and Magia Record, an exciting RPG based on well-known IP.

和五發楚鵬的張欣，我們很高興地宣布，我們將為我們的用戶帶來另外兩款評分較高的 ACG 遊戲：公主連接：Re Dive，一個激動人心的 RPG 和 Magia Record，一個基於知名 IP 的激動人心的 RPG .

Given each of these games' success in Japan, we are confident they will have winning performances in China as well.

鑑於這些遊戲在日本取得的成功，我們相信它們在中國也會有出色的表現。

In addition, we will exclusively publish The Furious Yama, a high-quality domestic mobile game based on a popular anime, and jointly publish The Legend of Heroes: Trails of Star, a classic IP-based RPG.

此外，我們將獨家發行改編自熱門動漫的高品質國產手游《狂暴的閻王》，並聯合發行經典IP角色扮演遊戲《英雄傳說：星途》。

On the jointly operated games front, we look forward to bringing a number of highly anticipated ACG games to market, including Shining Nikki, Arknights, One Piece, and Date A Live.

在聯營遊戲方面，我們期待將多款備受期待的 ACG 遊戲推向市場，包括 Shining Nikki、Arknights、One Piece 和 Date A Live。

We are also pleased to announce we will soon be rolling out Ark Order, a domestic ACG- themed card game in coming months.

我們也很高興地宣布，我們即將在未來幾個月推出國內 ACG 主題卡牌遊戲 Ark Order。

Looking at our advertising revenues, this increased by 132% to RMB 96 million or USD 15 million, year-over-year, supported by our attractive platform of immersive content, user interaction and our highly coveted Gen Z user demographic.

從我們的廣告收入來看，這得益於我們有吸引力的沉浸式內容平台、用戶交互和我們令人垂涎的 Z 世代用戶人口統計數據，同比增長 132% 至 9600 萬元人民幣或 1500 萬美元。

We expect to see continued growth in brand advertising as well as our feed ads, which is starting to show early progress as we ramp up the number of clients and ad load ratio.

我們預計品牌廣告和我們的 Feed 廣告將繼續增長，隨著我們增加客戶數量和廣告負載率，這開始顯示出早期進展。

In the second quarter, revenue from performance-based advertising contributed over 1/3 of our overall advertising revenue.

第二季度，基於效果的廣告收入占我們整體廣告收入的 1/3 以上。

We believe our advertising business is still in the relatively early stages of monetization and has great growth potential.

我們相信我們的廣告業務仍處於變現的相對早期階段，具有巨大的增長潛力。

Our live broadcasting and VAS revenues increased by 186% to RMB 119 million or USD 18 million, year-over-year, representing 12% of the total revenue.

我們的直播和增值服務收入同比增長 186% 至 1.19 億元人民幣或 1800 萬美元，佔總收入的 12%。

These offerings are paramount to support continued increase in the number of paying users.

這些產品對於支持付費用戶數量的持續增長至關重要。

And as I mentioned before, during the second quarter, our growth is focused on our premium membership program.

正如我之前提到的，在第二季度，我們的增長主要集中在我們的高級會員計劃上。

Our average monthly paying users reached 3 million, a 177% increase year-over-year.

我們的平均每月付費用戶達到 300 萬，同比增長 177%。

These positive trends continue to be encouraging, demonstrating our heightened monetization potential.

這些積極趨勢繼續令人鼓舞，展示了我們更高的貨幣化潛力。

As the year progresses, we plan to roll out more premium content and further improve the user experience for our growing number of paying users.

隨著時間的推移，我們計劃推出更多優質內容，並為我們越來越多的付費用戶進一步改善用戶體驗。

Quality and community remain at our core.

質量和社區仍然是我們的核心。

Diversification and expansion will be among our chief initiatives to further grow our content and reach as many users as possible with a variety of interests.

多元化和擴張將是我們進一步擴大內容並吸引盡可能多具有各種興趣的用戶的主要舉措之一。

It is in these ways that we believe we can further strengthen our monetization capabilities while continuing to grow our business and add value to our robust community of users, content creators, partners and investors.

正是通過這些方式，我們相信我們可以進一步加強我們的貨幣化能力，同時繼續發展我們的業務並為我們強大的用戶、內容創建者、合作夥伴和投資者社區增加價值。

This concludes Mr. Chen's comments.

陳先生的發言到此結束。

I will now provide a brief overview of our second quarter 2018 financial results.

我現在將簡要概述我們 2018 年第二季度的財務業績。

During the second quarter, we continued to see robust growth in all 3 of our primary business lines.

在第二季度，我們繼續看到我們所有三個主要業務線的強勁增長。

Our total net revenue increased by 76% to RMB 1 billion or USD 155 million year-over-year.

我們的總淨收入同比增長 76% 至 10 億元人民幣或 1.55 億美元。

As we ramp up our monetization effort, we are delighted to see more diversified revenue contribution from advertising and live broadcasting and value-added services, which accounted for 21% of our total revenue in the second quarter of 2018 compared with 14% from the same period of last year.

隨著我們加大貨幣化力度，我們很高興看到廣告、直播和增值服務的收入貢獻更加多元化，占我們 2018 年第二季度總收入的 21%，而同期為 14%去年的時期。

Cost of revenues increased by 74% to RMB 776 million or USD 117 million from the same period of last year.

營業成本為 7.76 億元人民幣或 1.17 億美元，同比增長 74%。

Revenue-sharing cost, a primary component of cost of revenues was RMB 417 million, or USD 63 million, representing an 84% increase year-over-year.

收入分成成本是收入成本的主要組成部分，為 4.17 億元人民幣，即 6300 萬美元，同比增長 84%。

Gross profit increased by 82% to RMB 251 million, or USD 38 million, from the same period of last year.

毛利潤同比增長82%至人民幣2.51億元，即3800萬美元。

Total operating expenses increased by 88% to RMB 358 million, or USD 54 million, from the same period of last year.

總營業費用為 3.58 億元人民幣，即 5400 萬美元，同比增長 88%。

It is important to note that the second and third quarters are our peak user acquisition times.

需要注意的是，第二季度和第三季度是我們的用戶獲取高峰期。

This seasonality includes increased spending on selling and marketing.

這種季節性包括銷售和營銷支出的增加。

With that in mind, selling and marketing expenses were RMB 128 million, or USD 19 million, representing a 146% increase year-over-year.

考慮到這一點，銷售和營銷費用為 1.28 億元人民幣，即 1900 萬美元，同比增長 146%。

This increase was primarily attributable to the increased channel and marketing expenses associated with our app, promotional expense for our mobile games, and an increase in headcount in selling and marketing personnel.

這一增長主要歸因於與我們的應用程序相關的渠道和營銷費用增加、我們的手機遊戲的促銷費用以及銷售和營銷人員人數的增加。

G&A expenses were RMB 98 million, or USD 15 million, representing a 30% increase year-over-year.

G&A 費用為 9800 萬元人民幣，即 1500 萬美元，同比增長 30%。

R&D expenses were RMB 132 million, or USD 20 million, representing a 108% increase year-over-year.

研發費用為1.32億元人民幣，折合2000萬美元，同比增長108%。

This increase was primarily due to increased headcount in engineers, reflecting our continuous invest in improving our production efficiency.

這一增長主要是由於工程師人數增加，反映了我們對提高生產效率的持續投資。

Loss from operations was RMB 107 million, or USD 16 million, compared with a loss of RMB 43 （company notes it was RMB 53 million, referring to the earnings release） million in the same period of last year.

經營虧損1.07億元，合1600萬美元，去年同期虧損43萬元（公司注為5300萬元，參考盈利發布）。

Income tax expense was flat year-over-year at RMB 2 million, or USD 400,000.

所得稅費用同比持平，為 200 萬元人民幣，即 40 萬美元。

Net loss totaled RMB 70 million, or USD 11 million, for the second quarter of 2018, compared with RMB 50 million in the same period of last year.

2018 年第二季度淨虧損總額為 7,000 萬元人民幣，即 1,100 萬美元，而去年同期為 5,000 萬元人民幣。

Adjusted net loss, which mainly excludes share-based compensation expenses and amortization expense related to intangible assets acquired through business acquisition was RMB 20 million, or USD 3 million, from RMB 14 million in the prior year period.

調整後的淨虧損（主要不包括股權補償費用和與通過業務收購取得的無形資產相關的攤銷費用）從去年同期的人民幣 1,400 萬元增至人民幣 2,000 萬元或 300 萬美元。

Basic and diluted loss per share were RMB 0.26, non-GAAP basic and diluted loss per share were RMB 0.07.

每股基本及攤薄虧損為人民幣0.26元，非公認會計準則每股基本及攤薄虧損為人民幣0.07元。

As of the end of second quarter, we had cash and cash equivalents as well as time deposits of RMB 3.6 billion, or USD 548 million, compared with RMB 765 million as of December 31, 2017.

截至第二季度末，我們的現金和現金等價物以及定期存款為人民幣 36 億元，即 5.48 億美元，而截至 2017 年 12 月 31 日為人民幣 7.65 億元。

As we look --forward, our financial goals are to continue improving our monetization efficiency while further growing our business.

展望未來，我們的財務目標是繼續提高我們的貨幣化效率，同時進一步發展我們的業務。

We are currently projecting new net revenues for the third quarter to be between RMB 1 billion and RMB 1.04 billion.

我們目前預計第三季度新的淨收入將在人民幣 10 億元至人民幣 10.4 億元之間。

Thank you for your attention.

感謝您的關注。

We would like now to open the call to our questions.

我們現在想打開我們的問題的電話。

Operator, please go ahead.

接線員，請繼續。

(Operator Instructions) Our first question comes from the line of Mr. Alex Yao from JPMorgan.

（操作員說明）我們的第一個問題來自摩根大通的 Alex Yao 先生。

(foreign language) So I have 2 questions.

（外語）所以我有兩個問題。

Number one is, how to think about the user growth outlook for second half, considering you guys did a pretty good job in terms of user growth in July, but then also there is a recent suspension for app downloads in domestic and Android App Store?

第一，如何看待下半年的用戶增長前景，考慮到你們在7月份的用戶增長方面做得很好，但最近國內和Android App Store的應用下載暫停？

And then second question is about the new game launch timetable.

然後第二個問題是關於新遊戲的發佈時間表。

You talked about a lot of new game developments in the prepared remark.

你在準備好的發言中談到了很多新遊戲的發展。

How do you think about the timetable for a new game launch, given the new game monetization approval has been suspended in China for 5 months already?

鑑於新遊戲的貨幣化審批已在中國暫停 5 個月，您如何看待新遊戲發布的時間表？

(foreign language)

（外語）

Okay.

好的。

Let me just translate the first part.

我只翻譯第一部分。

Mr. Chen says that, in this view, that the second half -- the use -- in the second half, the user growth trend looks very positive, that can be reflect in our Q2 result, MAU result, as well as our July performance, where we achieved 98 million MAUs in July, and that is driven by our improved content quality and our user experience and a strong demand from our users.

陳先生說，從這個角度來看，下半年——使用——在下半年，用戶增長趨勢看起來非常積極，這可以反映在我們的 Q2 業績、MAU 業績以及我們 7 月份的業績中。表現，我們在 7 月份實現了 9800 萬月活躍用戶，這得益於我們改進的內容質量和用戶體驗以及用戶的強勁需求。

(foreign language)

（外語）

Okay.

好的。

So the temporary suspension of our app download will have a little impact on our August new user acquisition, but it won't affect the overall trend of our Q3 and the overall second half user trend.

所以我們的應用下載暫時停止對我們8月份的新用戶獲取會有一點影響，但不會影響我們Q3的整體趨勢和下半年的整體用戶趨勢。

(foreign language)

（外語）

So in July, given that we are short for 5 days due to the temporary suspension, we still achieved 98 million MAUs.

所以在 7 月份，考慮到我們因為臨時停工而縮短了 5 天，我們仍然實現了 9800 萬的 MAU。

That's a very, very good result and beyond our expectation.

這是一個非常非常好的結果，超出了我們的預期。

(foreign language)

（外語）

So our app download has been fully restored on August 25 in all app stores in China.

所以我們的應用下載已經在8月25日在中國所有的應用商店完全恢復。

And we are actively exploring ways and activities to capture the last trend -- last wave of the summer vacation traffic, and we see it's working quite well.

我們正在積極探索捕捉最後一個趨勢的方法和活動——暑假流量的最後一波，我們看到它運作良好。

(foreign language)

（外語）

Okay.

好的。

So we forecast the August MAU will definitely be higher than the June MAU.

所以我們預測 8 月的 MAU 肯定會高於 6 月的 MAU。

And the overall average monthly active user in Q3 will be over 90 million.

第三季度整體平均月活躍用戶將超過9000萬。

(foreign language)

（外語）

So from our previous data, normally Q4 will be slower than Q3, but because of the temporary suspension in the summer and other new user acquisition strategy that we are undertaking, we think our Q4 MAU should be equal or even larger than Q3 MAUs.

所以從我們之前的數據來看，通常 Q4 會比 Q3 慢，但是由於夏季的臨時暫停以及我們正在採取的其他新用戶獲取策略，我們認為我們的 Q4 MAU 應該等於甚至大於 Q3 MAU。

(foreign language)

（外語）

So as for the licensing permit situation, Alex mentioned, we believe that is an industry-wide temporary problem we are facing, and we believe it's just a short-term delay.

因此，對於許可許可的情況，Alex 提到，我們認為這是我們面臨的全行業暫時性問題，我們認為這只是一個短期的延遲。

(foreign language)

（外語）

Although that the temporary suspension have some -- certain impact to the whole industry regarding the second half game launch schedule, but we believe there is still a huge pent-up demand from the Chinese gamers.

儘管暫時停賽對整個行業的下半年遊戲發佈時間表有一定的影響，但我們認為中國遊戲玩家仍有巨大的被壓抑的需求。

We are forecasting that once the issue has -- is resolved, there will be an increasing demand for new games.

我們預測，一旦問題得到解決，對新遊戲的需求就會增加。

(foreign language)

（外語）

Okay.

好的。

So on our -- relating to the pipeline that we discussed during the script, those pipelines are the highest quality titles that we select from -- over thousands of games, and we choose the best performance one.

因此，在我們 - 與我們在腳本中討論的管道有關，這些管道是我們從數千款遊戲中選擇的最高質量的遊戲，我們選擇性能最好的一款。

And we believe those -- all those games should perform quite well in China, and it's for all of the imported and domestic games, especially for the Japanese game that we are going to license.

我們相信那些——所有這些遊戲在中國都應該表現得相當不錯，這適用於所有進口和國產遊戲，尤其是我們將要授權的日本遊戲。

Their performance in Japan market will be a strong endorsement for their performance in China.

他們在日本市場的表現將是他們在中國表現的有力背書。

(foreign language)

（外語）

Okay.

好的。

So during the waiting period, we are actively preparing tons of solutions to provide new games.

所以在等待期間，我們正在積極準備大量的解決方案來提供新的遊戲。

For example, we are going to bring an exclusively licensed game, Ark Order, an ACG game that's already being permitted in coming months to our users.

例如，我們將為我們的用戶帶來獨家授權的遊戲 Ark Order，這是一款 ACG 遊戲，在未來幾個月內已經獲得許可。

(foreign language)

（外語）

Including what Alex just mentioned about the green channel, we're also actively preparing for that.

包括剛才Alex提到的綠色通道，我們也在積極準備。

(foreign language)

（外語）

So actually from early this year, we have been preparing all this approval process.

所以實際上從今年年初開始，我們就一直在準備所有的審批流程。

We have 4 games that's already complete all this pre-approval process, just waiting for the permit, that includes BanG Dream and Wu Fa Chu Peng de Zhang Xin.

我們有 4 款遊戲已經完成了所有的前置審批程序，正在等待許可，其中包括 BanG Dream 和 Wu Fa Chu Peng de Zhang Xin。

(foreign language)

（外語）

That concludes Mr. Chen's comment.

陳先生的評論到此結束。

And let me explain about user acquisition cost and the selling marketing expense trend.

讓我解釋一下用戶獲取成本和銷售營銷費用趨勢。

Overall, we will spend more in the second -- in the third and fourth quarter.

總體而言，我們將在第二季度——第三和第四季度花費更多。

That's mainly because usually the peak time for us to acquire new users in summer.

這主要是因為我們獲取新用戶的高峰時間通常在夏季。

And especially in Q3, we will spend more to catch up the new users acquisition momentum after our app has been resumed in all app stores.

特別是在第三季度，我們的應用在所有應用商店恢復後，我們將投入更多資金來趕上新用戶獲取的勢頭。

And we will also organize some of off-line anime events, such as BiliBili World and attend a lot of very hot anime events off-line.

並且我們也會組織一些線下動漫活動，比如嗶哩嗶哩世界，參加很多非常火熱的線下動漫活動。

And we will also prepare for the second anniversary celebration of FGO in this September.

而我們也將在今年9月為FGO的兩週年慶典做準備。

We estimate that we will spend on average about 15% of our total revenues on selling and marketing in the second half of this year and more budget will be shifted to Q3 in order to make sure our strategy can be -- can work.

我們估計，今年下半年我們將平均將總收入的 15% 用於銷售和營銷，更多的預算將轉移到第三季度，以確保我們的戰略能夠——能夠奏效。

And another component of our selling, marketing and staff related costs for our advertising business and that kind of costs will be increased in our advertising business.

我們的廣告業務的銷售、營銷和員工相關成本的另一個組成部分以及我們的廣告業務中的此類成本將增加。

So that will be the trend for selling and marketing in the second half of this year.

因此，這將是今年下半年銷售和營銷的趨勢。

Our next question comes from the line of Marcus Yang from Macquarie.

我們的下一個問題來自麥格理的 Marcus Yang。

Just a follow-up on the GAAP removal events.

只是對 GAAP 刪除事件的跟進。

Sir, can you quantify the impacts from these removal events?

先生，您能量化這些移除事件的影響嗎？

The revenue guidance now suggest a 37% to 40% year-on-year growth.

收入指引現在建議同比增長 37% 至 40%。

And how should you look like without these events?

如果沒有這些事件，你應該是什麼樣子？

And maybe also in a cost and expense perspective, I understand that you may add more staff for auditing, for instance.

也許從成本和費用的角度來看，我知道您可能會增加更多的審計人員，例如。

So that's my first question.

所以這是我的第一個問題。

And I guess, my second question is with regard to your advertising business.

我想，我的第二個問題是關於你的廣告業務。

Last time I recall that you are planning to increase your ad loads in eCPM, et cetera.

上次我記得您計劃增加 eCPM 等中的廣告負載。

And has that started to contribute from second quarter?

這是否從第二季度開始有所貢獻？

Or any updates on that progress will be appreciated.

或者任何有關該進展的更新將不勝感激。

Marcus, do you mind translating that into Chinese?

馬庫斯，你介意把它翻譯成中文嗎？

(foreign language)

（外語）

(foreign language)

（外語）

So overall, there will be certain impact for the new user acquisitions in August related to the temporary app removal, but we think the overall revenue growth trend as well as user growth trend will not be impacted by this temporary removal.

因此，總體而言，臨時移除 App 對 8 月份的新用戶獲取會有一定影響，但我們認為整體收入增長趨勢以及用戶增長趨勢不會受到此次臨時移除的影響。

(foreign language)

（外語）

Okay.

好的。

During the period of suspension, we have conducted through all rectification process.

在停牌期間，我們進行了全部整改。

The doubling auditing team plan was not just simply to dealing with this suspension but it's actually related to our actual businesses involvement, our new content submission is increasing very rapidly and we were going to increase the headcount of our auditing team, and we are just expediting this process.

審計團隊翻倍的計劃不僅僅是為了處理這次暫停，實際上它與我們實際的業務參與有關，我們的新內容提交速度非常快，我們將增加審計團隊的人數，我們只是在加快速度這個過程。

Yes, just to add 1, 2 points.

是的，只是要加1、2分。

One, we will double our current auditing team member -- the number of our current auditing staffs.

一，我們將現有的審計團隊成員增加一倍——我們現有的審計人員數量。

So basically we estimate that the impact will be around RMB 5 million in the second half of this year.

所以基本上我們估計今年下半年的影響在500萬元左右。

And as we mentioned before, we are spending more on selling and marketing in August and September, in order to catch up the user acquisition momentum.

正如我們之前提到的，我們在 8 月和 9 月在銷售和營銷上投入更多，以趕上用戶獲取的勢頭。

And I think, Mr. Chen can -- will add more color on the advertising business.

而且我認為，陳先生可以——將為廣告業務增添更多色彩。

(foreign language)

（外語）

Our advertising revenue growth momentum is very positive as it's been showed on our Q2 earnings report.

我們的廣告收入增長勢頭非常積極，正如我們的第二季度收益報告所顯示的那樣。

The performance-based advertising, which was just launched early this year, is already contributing over 1/3 of our advertising revenue.

今年年初剛推出的效果類廣告，已經貢獻了我們1/3以上的廣告收入。

(foreign language)

（外語）

So continuing with the performance-based advertising, we have launched 2 large scale of new agency recruiting conference in end of March and beginning of June, and that help us to recruit and increase the number of advertising agencies who are representing Bilibili.

所以繼續做基於效果的廣告，我們在3月底和6月初召開了2次大型新機構招聘會，幫助我們招募和增加代表B站的廣告公司的數量。

Actually, in Q2, the number of advertising agency grew over 100% quarter-over-quarter.

實際上，在第二季度，廣告代理的數量環比增長超過 100%。

(foreign language)

（外語）

This growth is not just really -- not limited to the number of growth but we are also expanding our coverage in multiple industries, and that is also helping our conversion and revenue growth.

這種增長不僅是真的 - 不僅限於增長的數量，而且我們還在擴大我們在多個行業的覆蓋範圍，這也有助於我們的轉換和收入增長。

(foreign language)

（外語）

We are also optimizing our algorithm and our strategy to improve the click-through rate.

我們還在優化我們的算法和策略以提高點擊率。

(foreign language)

（外語）

So as you may know, to increase the performance-based advertising revenue, there are several metrics.

如您所知，要增加基於效果的廣告收入，有幾個指標。

The growth of number of advertising agency and the quality of advertising agency as well as the algorithm and our recommendation policy as well as app load.

廣告代理商數量的增長和廣告代理商的質量以及算法和我們的推薦策略以及應用程序負載。

What we are doing in improving in Q2 was mainly focused on increasing the number of advertising agency and the quality of advertising agency and improve our algorithm and Big Data capabilities, not so much on increasing of app load.

我們在第二季度所做的改進主要集中在增加廣告代理的數量和廣告代理的質量，改進我們的算法和大數據能力，而不是增加應用程序的負載。

(foreign language)

（外語）

On the brand advertising front, we're also expanding our customer base and improving our brand influence in the industry, where we think we have improved our overall strategic planning marketing as well as integrated marketing capabilities for brand advertisers in the second quarter.

在品牌廣告方面，我們也在擴大我們的客戶群，提升我們在行業中的品牌影響力，我們認為我們在這方面提升了我們在第二季度對品牌廣告主的整體戰略規劃營銷和整合營銷能力。

And that concludes the question-and-answer session.

問答環節到此結束。

I would like to turn the conference back over to management for any additional or closing comments.

我想將會議轉回管理層，以獲取任何其他或結束意見。

Thank you, operator.

謝謝你，接線員。

And thank you, once again for joining us today.

再次感謝您今天加入我們。

If you have further questions, please contact myself, Juliet Yang, Bilibili's Senior Director, or TPG Investor Relations.

如果您還有其他問題，請聯繫我本人、嗶哩嗶哩高級總監 Juliet Yang 或 TPG 投資者關係部。

Our contact information for IR in both China and U.S. can be found on today's press release.

我們在中國和美國的 IR 聯繫信息可在今天的新聞稿中找到。

Have a great day.

祝你有美好的一天。