Bilibili Inc (BILI) 2022 Q2 法說會逐字稿

Good day, and welcome to Bilibili's Second Quarter 2022 Financial Results and Business Update Conference Call. Today's conference is being recorded.

大家好，歡迎參加嗶哩嗶哩 2022 年第二季財務業績及業務更新電話會議。今天的會議正在錄製中。

At this time, I'd like to turn the conference over to Juliet Yang, Executive Director of Investor Relations. Thank you. Please go ahead.

現在，我想將會議交給投資者關係執行總監 Juliet Yang。謝謝。請繼續。

Thank you, operator. During this call, we'll discuss our business outlook 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 filings with the SEC and Hong Kong Stock Exchange.

謝謝您，接線生。在本次電話會議中，我們將討論我們的業務前景並做出前瞻性陳述。這些評論是基於我們今天的預測和期望。由於存在許多風險和不確定因素，包括我們最近向美國證券交易委員會和香港證券交易所提交的文件中提到的風險和不確定因素，實際事件或結果可能與今天的新聞稿和本討論中提到的存在重大差異。

The non-GAAP financial measure we provide are for comparison purpose only. Definition of these measures and a reconciliation table are available in the news release we issued earlier today.

我們提供的非公認會計準則財務指標僅供比較之用。我們今天早些時候發布的新聞稿中提供了這些措施的定義和對帳表。

As a reminder, this conference is being recorded. In addition, an investor presentation and webcast replay of this conference call will be available on Bilibili IR website at ir.bilibili.com.

提醒一下，本次會議正在錄製中。此外，投資人介紹及本次電話會議網路直播重播將在嗶哩嗶哩投資者關係網站ir.bilibili.com上提供。

Joining us today 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.

今天與我們一起出席的 Bilibili 高層管理人員包括董事會主席兼首席執行官陳睿先生；董事會副主席兼首席營運官李卡莉女士；以及首席財務官 Sam Fan 先生。

And I will now 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，他將代表陳先生宣讀準備好的演講稿。

Thank you, Juliet, and thank you, everyone, for participating in our 2022 Second Quarter Results Conference Call. I'm pleased to deliver today's opening remarks on behalf of Mr. Chen.

謝謝朱麗葉，也謝謝大家參加我們的 2022 年第二季業績電話會議。我很高興能代表陳先生致今天的開幕詞。

We confronted [immense] headwinds in the second quarter. During the period, we steadied our company by bringing users improved products, expanding our content and implementing further cost control measures. With lockdowns in Shanghai lifted in June, we believe the worst impact is behind us. Importantly, we expected to recover our operating margin in the second half of the year while continuing to grow our users and narrowing our net loss. Our total MAUs reached a new record of 306 million in the second quarter, up 29% year-over-year, representing another exciting milestone.

我們在第二季面臨巨大的阻力。在此期間，我們透過為使用者提供改進的產品、擴展我們的內容和實施進一步的成本控制措施來穩定公司。隨著上海六月的封鎖解除，我們相信最嚴重的影響已經過去。重要的是，我們預計下半年我們的營業利潤率將恢復，同時繼續增加我們的用戶並縮小我們的淨虧損。我們的第二季總月活躍用戶數創下 3.06 億的新紀錄，年增 29%，這是另一個令人興奮的里程碑。

While we remain committed to our MAU target, we are putting additional focus on the quality of users, looking at metrics such as DAUs and engagement levels. In Q2, our DAUs grew by 33% year-over-year to 84 million, outpacing the growth rate of our MAUs. This brought our D/M ratio to 27.3%, up from 26.4% in the same period last year.

在我們繼續致力於實現 MAU 目標的同時，我們也更加關注用戶質量，關注 DAU 和參與度等指標。第二季度，我們的 DAU 年比成長 33%，達到 8,400 萬，超過了 MAU 的成長率。這使我們的 D/M 比率達到 27.3%，高於去年同期的 26.4%。

Daily average time spent was 89 minutes, a 9-minute increase compared with the same period last year. Longer user time spent and high user activity increased our total user traffic, which grew by 48% year-over-year. We believe our growing matrix of products, expanding content library and quality-driven growth strategy will strategically position us to continue our growth momentum.

日均使用時間為89分鐘，較去年同期增加9分鐘。用戶使用時間的延長和用戶活躍度的提高增加了我們的總用戶流量，年增了 48%。我們相信，我們不斷增長的產品矩陣、不斷擴大的內容庫和品質驅動的成長策略將在策略上為我們繼續保持成長勢頭奠定基礎。

Impacted by the challenging macro environment, our total net revenues were RMB 4.9 billion, up 9% year-over-year in the second quarter. NPUs increased by 32% year-over-year to 27.5 million, and our paying ratio was 9%.

受宏觀環境挑戰的影響，第二季我們的總淨收入為人民幣49億元，較去年同期成長9%。 NPU 年成長 32% 至 2,750 萬，付費率為 9%。

Followed by a slower April and May, our advertising business rebounded nicely when the lockdowns lifted in June. With increasingly popular advertising products, such as ads in Story Mode, we grew our ad revenue by 10% year-over-year. We expect to continue gaining market share in the second half of the year.

繼 4 月和 5 月業務放緩之後，我們的廣告業務在 6 月封鎖解除後強勁反彈。隨著故事模式中的廣告等廣告產品越來越受歡迎，我們的廣告收入比去年同期成長了 10%。我們預計下半年市佔率將持續擴大。

During the second quarter, we also put further cost control initiatives into effect. Specifically, we cut sales and marketing expenses by 16% year-over-year. Sales and marketing expenses as a total percentage of revenue decreased to 24% from 31% in the same period last year. Server and cast per video views also declined by 37% year-over-year.

第二季度，我們也實施了進一步的成本控制措施。具體來說，我們比去年同期削減了16%的銷售和行銷費用。銷售及行銷費用佔總收入的比例從去年同期的31%下降至24%。每台影片的伺服器和演員觀看次數也較去年同期下降了 37%。

Other adjustments we made to improve our organizational efficiency, including canceling underperforming projects and reallocate resources to core business. We expect positive impact to our P&L will start to show in the second half of the year.

我們所做的其他調整旨在提高組織效率，包括取消表現不佳的專案並將資源重新分配到核心業務。我們預計對我們的損益表的正面影響將在今年下半年開始顯現。

In July, we also made some pivotal adjustments to our organization. Our goal was to be more congruent to our long-term sustainable growth. We have integrated the operations of live broadcasting with our video platform and made organizational changes that integrate our commercialization efforts across our content ecosystem, create synergies and improve efficiency.

7月份，我們也對組織架構進行了一些關鍵調整。我們的目標是更符合我們的長期永續成長。我們將直播業務與視訊平台整合在一起，並進行了組織變革，將我們的商業化努力融入整個內容生態系統，產生協同效應並提高效率。

With that overview, I'd like to go through some details of our second quarter operations across our content, community and commercialization. We have seen many iterations of the online video space. Ours is the one that has remained expansive and trend-setting. The introduction of our different formats, such as Story Mode, PUGV, live broadcasting and Smart TV, significantly boost our signal of all the videos you like anytime, anywhere.

透過這個概述，我想介紹一下我們第二季度在內容、社群和商業化方面的營運細節。我們已經看到線上影片領域的多次迭代。我們的品牌始終保持著擴張性並引領潮流。我們推出的故事模式、PUGV、直播和智慧電視等不同格式大大增強了您隨時隨地觀看喜愛的所有影片的訊號。

Looking at Story Mode as an excellent example. Story Mode is one of our newest verticals covering users' on-the-go entertainment needs, which is more efficient in distributing video in shorter length of time. While video views from PUGV grew 53% year-over-year, video views from Story Mode increased by over 400% year-over-year, bringing incremental traffic to our platform. This is an ongoing trend that we are seeing throughout the second half of the year. Moreover, Story Mode presents a parallel commercial prospect as a gateway to different monetization opportunities, such as advertising and live broadcasting.

以故事模式為例。故事模式是我們最新的垂直領域之一，滿足了用戶隨時隨地的娛樂需求，能夠在更短的時間內更有效率地分發影片。 PUGV 的影片觀看量較去年同期成長 53%，而 Story Mode 的影片觀看量較去年同期成長超過 400%，為我們的平台帶來了增量流量。這是我們在今年下半年看到的持續趨勢。此外，故事模式還提供了平行的商業前景，作為通往不同貨幣化機會（如廣告和直播）的門戶。

MAU penetration in live broadcasting continues to grow across our user base. In July, we began to fully integrate our live broadcasting and PUGV ecosystems. Over time, we expect the combination of these 2 ecosystems to result in more efficient traffic execution and allocation and inspire more content creators to become live broadcasting hosts.

在我們的用戶群中，直播的 MAU 滲透率持續成長。 7月份，我們開始全面整合我們的直播和PUGV生態系統。隨著時間的推移，我們預計這兩個生態系統的結合將帶來更有效率的流量執行和分配，並激勵更多的內容創作者成為直播主播。

During the second quarter, our users primarily gravitated to lifestyle, games, entertainment, ACG and knowledge categories. We continue to accumulate a massive amount of content through a growing pool of talented creators.

第二季度，我們的用戶主要集中在生活風格、遊戲、娛樂、ACG和知識類別。我們透過不斷壯大的才華橫溢的創作者隊伍不斷累積大量內容。

In the second quarter, we had 13.2 million total monthly average content submissions, up 56% year-over-year. Our growth stems from our 3.6 million monthly active content creators, an increase of 50% year-over-year.

第二季度，我們每月平均內容提交總量為 1,320 萬次，年增 56%。我們的成長源自於每月 360 萬活躍內容創作者，較去年同期成長 50%。

In the second quarter, the number of creators with 10,000 followers grew by 46% year-over-year, and creators with over 1 million followers grew even faster at 58% year-over-year. Notably, over 60% of the content creators who gained 1 million followers during Q2 was benefited from the fast-growing Story Mode traffic.

第二季度，粉絲數超過1萬的創作者數量較去年同期成長46%，粉絲數超過100萬的創作者數量成長更快，較去年同期成長58%。值得注意的是，第二季獲得 100 萬粉絲的內容創作者中，超過 60% 受益於快速成長的故事模式流量。

We continue to expand avenues to unleash content creators' monetization potential. In the second quarter, over 1.1 million creators received monetary rewards through live broadcasting, advertising programs or cash incentive program, up 97% from same period last year.

我們不斷拓寬途徑，釋放內容創作者的獲利潛力。第二季度，超過110萬名創作者透過直播、廣告項目或現金獎勵計畫獲得金錢獎勵，比去年同期成長97%。

Turning to our community. We continue to feature robust content that resonate with our users, along with a welcoming community environment. We saw this across our user metrics in the second quarter with impressive year-over-year gains. Daily video views grew by 83% to 3.1 billion, and the monthly interactions grew by 73% to 12.5 billion. As I previously mentioned, the average daily time spend also increased by 9 minutes year-over-year to 89 minutes.

轉向我們的社區。我們將繼續推出能夠引起用戶共鳴的豐富內容，並創造熱情的社群環境。我們在第二季的用戶指標中看到了這一點，年成長率令人印象深刻。每日影片觀看量成長83%，達到31億次，每月互動量成長73%，達到125億次。正如我之前提到的，平均每日花費的時間也比去年同期增加了 9 分鐘，達到 89 分鐘。

Now let's take a look at our commercialization efforts. Advancing our commercial prospects is one of our leading goals this year. In the second quarter, we continue to convert paying users and improved our advertising efficiency to gain more market share, maximizing our high-quality user base.

現在讓我們來看看我們的商業化努力。推進我們的商業前景是我們今年的主要目標之一。在第二季度，我們繼續轉換付費用戶，並提高廣告效率以獲取更多市場份額，最大限度地擴大我們的優質用戶群。

Looking first at VAS business. Net revenues for VAS were RMB 2.1 billion, an increase of 29% year-over-year. We converted more traffic to paying users in the second quarter, driven primarily by our live broadcasting, where we hold unique advantages given this natural extension of our video universe. Despite the challenges of stricter regulations, our live broadcasting conversion rate remained strong in the second quarter.

首先來看增值業務。增值業務淨收入為人民幣21億元，較去年成長29%。我們在第二季度將更多流量轉化為付費用戶，這主要得益於我們的直播，由於我們的視訊領域的自然延伸，我們在直播方面擁有獨特的優勢。儘管面臨更嚴格監管的挑戰，我們的直播轉換率在第二季依然保持強勁。

By integrating our PUGV ecosystem with live broadcasting, we have created a win-win solution. The number of active live broadcasters increased by 107% year-over-year in the second quarter. Our live broadcasting MAUs penetration rates continued to grow, and NPUs for live broadcasting increased by nearly 70% year-over-year. And at the same time, we improved the live broadcasting's gross margin by optimizing revenue-sharing plans.

透過將我們的 PUGV 生態系統與直播結合，我們創造了一個雙贏的解決方案。第二季活躍直播主播數量較去年同期成長107%。我們的直播MAU滲透率持續成長，直播NPU年增近70%。同時，我們透過優化收益分成計劃，提高了直播的毛利率。

Premium membership for the second quarter reached 21 million, up 19% year-over-year. The majority of our users continue to be annual or auto-renewal subscribers.

第二季高級會員數達到 2,100 萬，年增 19%。我們的大多數用戶仍然是年度或自動續訂的訂閱者。

Looking at our advertising services. Revenues from this segment reached RMB 1.16 billion, an increase of 10% year-over-year. Despite the macro headwinds, our top 5 verticals in the second quarter were games, digital and 3C products, skin care and cosmetics, e-commerce and food and [beverage.]

查看我們的廣告服務。該部門營業收入達到人民幣11.6億元，年增10%。儘管面臨宏觀不利因素，我們第二季度的前五名垂直領域仍然是遊戲、數位和 3C 產品、護膚品和化妝品、電子商務以及食品和[飲料]。

Optimizing our product offerings and the conversion efficiency remain our strategy for our ad business. In the second quarter, we continue to dedicate our resources to expand our advertising scenarios with diverse products and improved conversion modules. We also executed our integrated marketing campaigns as selling strategy to realize more cross-selling opportunities. The Story Mode app we launched in April have also been welcomed by our advertisers.

優化我們的產品供應和轉換效率仍然是我們廣告業務的策略。第二季度，我們持續投入資源，拓展廣告場景，提供更多樣化的產品和更完善的轉換模組。我們也執行整合行銷活動作為銷售策略，以實現更多的交叉銷售機會。我們四月推出的故事模式應用程式也受到了廣告商的歡迎。

Lastly, on games business. Net revenues was RMB 1.05 billion in the second quarter. The lack of supply for new game content in the domestic market was the main challenge in the first half of the year. As the domestic game approval process returned to normal, we look forward to seeing the approval for imported titles. Nevertheless, our game strategy remains focused on the in-house development and bringing exciting, high-quality games for both domestic and international markets.

最後，關於遊戲業務。第二季淨營收為10.5億元。國內市場新遊戲內容供給不足是上半年面臨的主要挑戰。隨著國產遊戲審批恢復正常，我們期待進口遊戲也能順利核准。儘管如此，我們的遊戲策略仍然專注於內部開發，並為國內和國際市場帶來令人興奮的高品質遊戲。

In the second quarter, our self-development game revenues contributed around 5% of total game revenue, mainly thanks to our successful launch of Artery Gear in many countries and regions. And for our pipeline. Domestically, we are actively applying for game licenses and have 4 titles approved for release. 6 games in our pipeline, including 2 self-development titles, are ready to hit overseas market in the second half of the year.

第二季度，我們的自研遊戲收入佔遊戲總收入的5%左右，這主要得益於《Artery Gear》在多個國家和地區的成功發行。以及我們的管道。在國內，我們正積極申請遊戲版號，目前已有4款遊戲獲批發。目前公司正在籌備的6款遊戲，包括2款自主研發的遊戲，已準備好於下半年登陸海外市場。

As a 13-year-old company, our user numbers and revenues are still seeing robust growth, and we foresee a long runway of growth in this future. Our attention and resources are focused on improving both our top line and bottom line. With this in mind, we plan to further enhance our operational efficiency, tighten spending and strengthen our execution. We are committed to improving our gross margin and narrowing our operating loss in the second half of the year.

作為一家擁有 13 年歷史的公司，我們的用戶數量和收入仍然保持強勁增長，我們預計未來還將保持長期成長。我們的注意力和資源都集中在提高我們的營收和利潤。考慮到這一點，我們計劃進一步提高營運效率，緊縮開支並加強執行力。我們致力於在下半年提高毛利率並縮小經營虧損。

This concludes Mr. Chen's remarks. I will now to provide a brief overview of our financial results for second quarter of 2022 and outlook for the third quarter of 2022.

陳先生的發言到此結束。現在，我將簡要概述我們 2022 年第二季的財務業績以及 2022 年第三季的展望。

Total net revenues for the second quarter was RMB 4.91 billion, up 9% from the same period of 2021. Our total net revenue, broke down by revenue stream, was approximately 21% mobile games, 43% VAS, 24% advertising and 12% e-commerce and other business.

第二季總淨收入為人民幣 49.1 億元，較 2021 年同期成長 9%。我們的總淨收入按收入來源細分，約有 21% 來自手機遊戲、43% 來自增值服務、24% 來自廣告以及 12% 來自電商及其他業務。

Cost of revenues increased by 19% year-over-year to RMB 4.2 billion. Revenue-sharing cost, a key component of cost of revenues, was RMB 2.1 billion, representing an 18% increase from the same period in 2021. Server and bandwidth cost, as part of a relatively fixed cost component, decreased 9% quarter-over-quarter. Server and bandwidth cost per video views decreased 37% year-over-year, demonstrating the impact of ongoing efforts and progress in cost savings.

營業成本較去年同期成長19%至人民幣42億元。營收分成成本是營收成本的關鍵組成部分，為 21 億元，較 2021 年同期成長 18%。作為相對固定的成本組成部分，伺服器和頻寬成本環比下降 9%。每次影片觀看的伺服器和頻寬成本年減了 37%，證明了持續努力和成本節約的進展。

Our gross profit in the second quarter was RMB 738 million, and our gross profit margin was 15%. We are actively tightening our cost control measures and improving our operating efficiency. We expect our gross profit margin will start to recover beginning this quarter.

我們第二季的毛利是7.38億元人民幣，毛利率是15%。我們正在積極加強成本控制措施並提高營運效率。我們預計我們的毛利率將從本季開始回升。

Total operating expenses was RMB 2.9 billion, up 17% from the same period in 2021. Sales and marketing expenses was RMB 1.2 billion, representing a 16% decrease year-over-year. Sales and marketing expenses as a percentage of total revenue was 24%, down from 31% in the same period last year. The year-over-year decrease was primarily attributed to decreased promotional expenses for our mobile games as well as lower user acquisition costs.

總營運費用為人民幣29億元，較2021年同期成長17%。銷售及行銷費用為人民幣12億元，較去年同期下降16%。銷售和行銷費用佔總收入的比例為24%，低於去年同期的31%。年比下降主要歸因於我們手機遊戲的推廣費用減少以及用戶獲取成本降低。

G&A expenses were RMB 626 million, representing a 44% increase year-over-year. The increase was primarily due to increased headcount in general personnel, higher rental expenses and nonrecurring expenses related to optimizing our organizational structure. R&D expenses was RMB 1.1 billion, representing a 68% increase year-over-year. The increase was primarily due to increased headcount in research and development, increased share-based compensation expenses and nonrecurring expenses related to adjustment of certain game projects.

一般及行政開支為人民幣 6.26 億元，較去年同期成長 44%。成長的主要原因是一般人員數量增加、租金支出增加以及與優化組織結構相關的非經常性支出。研發費用為人民幣11億元，較去年成長68%。成長的主要原因是研發人員數量增加、股權激勵費用增加以及與某些遊戲項目調整相關的非經常性費用。

Net loss and adjusted net loss was RMB 2.0 billion and RMB 1.96 billion for the second quarter of 2022, respectively.

2022年第二季淨虧損和調整後淨虧損分別為20億元人民幣及人民幣19.6億元。

Turning to our capital allocation and liability management. In aggregate, we repurchased a total of 2.6 million ADS for a total cost of USD 53.6 million at the end of June 30, 2022. In addition, we repurchased a total of USD 275 million 2026 notes for a total cost of USD 198 million with total future cash savings of USD 84 million at the end of June 30, 2022. And as of June 30, 2022, we had cash and cash equivalent, time deposits and short-term investments of RMB 24.9 billion, compared with RMB 13.2 billion as of December 31, 2021.

轉向我們的資本配置和負債管理。截至 2022 年 6 月 30 日，我們總計回購了 260 萬股美國存託憑證，總成本為 5,360 萬美元。此外，截至 2022 年 6 月 30 日，我們總計回購了 2.75 億美元的 2026 年票據，總成本為 1.98 億美元，未來現金節省總額為 8,400 萬美元。截至 2022 年 6 月 30 日，我們的現金及現金等價物、定期存款及短期投資為人民幣 249 億元，而截至 2021 年 12 月 31 日為人民幣 132 億元。

As for our intent to convert to a [dual] primary listing on the Main Board of Hong Kong Stock Exchange. With respect to the proposed conversion, we successfully obtained all the necessary shareholders' approval at our company's Annual General Meeting, which was held on June 30, 2022. The Hong Kong Exchange has also acknowledged our application, setting October 3, 2022, as the proposed effective day. Our endeavor will expand our access to a wider investor base, and we expect to concurrently maintain our listing status on NASDAQ.

至於我們打算轉換為香港證券交易所主機板的[雙重]主要上市。就擬議轉換而言，我們已在2022年6月30日舉行的公司年度股東大會上成功獲得所有必要的股東批准。香港交易所亦已受理我們的申請，並確定2022年10月3日為擬議生效日。我們的努力將擴大我們接觸更廣泛投資者群體的機會，同時我們希望同時保持在納斯達克的上市地位。

With that in mind, we are currently projecting net revenues for the third quarter of 2022 to be between RMB 5.6 billion and RMB 5.8 billion.

考慮到這一點，我們目前預計 2022 年第三季的淨收入將在 56 億元至 58 億元人民幣之間。

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

感謝您的關注。我們現在想開始回答你們的問題。接線員，請繼續。

(Operator Instructions) Our first question comes from the line of Lei Zhang from Bank of America Merrill Lynch.

（操作員指示）我們的第一個問題來自美銀美林的張雷。

(foreign language) My question is mainly on the margin profile. We noticed that we have taken some cost control measures in first half, especially on sales and marketing expenses. So do we see any room in other cost items? And how should we see our gross margin and net profit margin trend in the second half?

（外語）我的問題主要關於保證金概況。我們注意到我們在上半年採取了一些成本控制措施，特別是在銷售和行銷費用方面。那麼，我們是否看到其他成本項目有空間？那我們下半年的毛利率、淨利率走勢該怎麼看呢？

(foreign language)

（外語）

[Interpreted] Let me share some of my thoughts about cost control and efficiency improvement. We believe this slogan is not just about cost control. It's not about not to spend money, but spend our money more wisely, spend money on the right places.

[翻譯]我講一些關於成本控制和效率提升的想法。我們相信這個口號不僅涉及成本控制。這並不是不花錢，而是更明智地花錢，把錢花在正確的地方。

(foreign language)

（外語）

[Interpreted] Under the current extremely challenging macro environment and the COVID impact that's causing business everywhere a very challenging environment. And I have been telling our employees, our business under this environment needs to be more focused. Focused means that we need to allocate our best resource to our core business to be exceedingly good at our core. And if it's noncore, we should put less effort and focus on the -- what matters the most.

[解讀] 在當前極具挑戰性的宏觀環境和新冠疫情的影響下，各地的商業環境都面臨極大的挑戰。我一直告訴我們的員工，在這種環境下我們的業務需要更加專注。專注意味著我們需要把最好的資源配置到我們的核心業務上，以便在核心業務上做到極致。如果它不是核心，我們就應該減少精力，把重點放在最重要的事情上。

(foreign language)

（外語）

[Interpreted] What's our core? Video and growth. And the growth is not just about user growth, but also our top line growth.

[解讀]我們的核心是什麼？視訊和成長。這種成長不僅指用戶的成長，也包括我們的收入的成長。

(foreign language)

（外語）

[Interpreted] So in the first half of this year, we have been allocating all of our resources, including our capital, into the areas that is our core, that is our video business, user growth, in areas that can help us to expand our top line.

[解釋] 因此，在今年上半年，我們一直將包括資本在內的所有資源配置到我們的核心領域，即我們的視訊業務、用戶成長以及可以幫助我們擴大收入的領域。

(foreign language)

（外語）

[Interpreted] Even though it's a challenging environment -- macro environment, but I'm still emphasizing the importance of growth within the company because growth, we believe, is the most important priority within our community.

[解釋] 儘管這是一個充滿挑戰的環境——宏觀環境，但我仍然強調公司內部成長的重要性，因為我們相信成長是我們社區中最重要的優先事項。

(foreign language)

（外語）

[Interpreted] Bilibili runs a very typical Internet platform business. The value of our platform really comes from our -- the value of our users.

【解讀】B站做的是一個非常典型的網路平台業務。我們平台的價值其實來自於我們用戶的價值。

(foreign language)

（外語）

[Interpreted] We value the user growth, but we are also emphasizing on improving the user growth efficiency and lowering the user growth cost.

[解讀] 我們重視用戶成長，但也強調提升用戶成長效率，降低用戶成長成本。

(foreign language)

（外語）

[Interpreted] As you can see, we have achieved -- new user acquisition costs continue to decrease. And our sales and marketing expense decreased by 16% year-over-year in the second quarter. And sales and marketing expense as a percentage of revenue came down from 31% same period last year to 24% in the second quarter.

[解讀] 如您所見，我們已經實現了—新用戶獲取成本持續下降。我們的第二季銷售和行銷費用年減了 16%。銷售和行銷費用佔收入的比例從去年同期的 31% 下降到第二季的 24%。

(foreign language)

（外語）

[Interpreted] And also at the same time, as our costs go down, our user engagement, our user retention, has continued to improve.

[解釋] 同時，隨著成本的下降，我們的用戶參與度和用戶保留率也持續提高。

(foreign language)

（外語）

[Interpreted] And improving the efficiency also comes -- goes with the technology side. In this quarter, we have optimized the allocation of our technical resources and unified investment in technology, infrastructure and concentrated our resource on solving key problems.

[翻譯] 提高效率也伴隨著科技的發展。本季度，我們優化了技術資源配置，統一了技術、基礎設施的投入，集中力量解決關鍵問題。

(foreign language)

（外語）

[Interpreted] For example, in the second quarter, our DAU grew 33% year-over-year. Our video views grew 83% year-over-year. As you may aware, the resolution of our videos has become more and more premier. And we are using everything we can, and on the technology side, improving the algorithm, resulted in the unit VV cost came down by 37% year-over-year.

[解讀]例如，在第二季度，我們的DAU年增了33％。我們的影片觀看量年增了 83%。如您所知，我們的視訊解析度已經變得越來越高。我們正在盡一切努力，在技術方面改進演算法，導致單位 VV 成本年減了 37%。

(foreign language)

（外語）

[Interpreted] I'm expecting, for this year, as our DAU growth significantly -- and our time spent also grow simultaneously, our total investment that the server and bandwidth cost, the overall expense, will not be exceeding last -- what we spent last year. This is a perfect example of how we use technology to improve efficiency.

[解釋] 我預計，由於今年我們的 DAU 大幅增長，而且我們花費的時間也同步增長，我們的服務器和頻寬成本的總投資，即總體費用，將不會超過去年的支出。這是我們如何利用科技提高效率的完美例子。

(foreign language)

（外語）

Okay. I will take the question about the gross profit trend. We believe our Q2 results has already reflected the impact of the COVID lockdowns. And we estimate our revenue will regain a sequential growth momentum in the second half of this year in Q3 and Q4.

好的。我將回答有關毛利潤趨勢的問題。我們相信，我們的第二季業績已經反映了 COVID 封鎖的影響。我們預計，今年下半年第三季和第四季我們的營收將恢復連續成長動能。

So our gross margin will gradually improve to around, like, let's say, 20% in Q4. And we will continue to adopt strict expense control measures, as mentioned by Chairman Chen. At the same time, so we expect our non-GAAP net loss ratio will also narrow down from around like 40% in Q2 to around 30% in Q4.

因此我們的毛利率將逐步提高，比如說，第四季將達到 20% 左右。正如陳主席所提到的，我們將繼續採取嚴格的費用控制措施。同時，我們預期非公認會計準則淨虧損率也將從第二季的 40% 左右收窄至第四季的 30% 左右。

Our next question comes from the line of Daniel Chen from JPMorgan.

我們的下一個問題來自摩根大通的 Daniel Chen。

(foreign language) I will translate myself. So my question is on the user side. BILI's MAU have surpass over 300 million this quarter. And we also noticed that, in the second quarter, the DAU actually outgrows MAU, and the average time spent per user also grow quite nicely. So I was wondering, what's the driver behind? And also what's management's expectation for the DAU and MAU metrics for the second half and also in 2023?

（外語）我自己來翻譯。所以我的問題是關於使用者方面的。本季BILI的MAU已突破3億。我們還注意到，在第二季度，DAU 實際上超過了 MAU，並且每個用戶的平均使用時間也成長得相當不錯。所以我很好奇，背後的驅動力是什麼？管理階層對下半年和 2023 年的 DAU 和 MAU 指標有何預期？

(foreign language)

（外語）

[Interpreted] I will share 3 points. As you may all aware, there has been a significant change of macro environment globally. However, we think the fundamentals of Bilibili remain unchanged. Here are 3 points that's supporting our growth.

[翻譯]我分享3點。大家可能已經注意到，全球宏觀環境已經發生了重大變化。不過，我們認為嗶哩嗶哩的基本面保持不變。以下三點支持著我們的成長。

(foreign language)

（外語）

[Interpreted] Videolization, for a start, is a global phenomenon. And we think the videolization movement will continue for 3 years at least. And this will also support Bilibili's growth, not for just 1 year, to 2 years, 3 years, as this will continue to support us.

[解讀] 首先，視訊化是一個全球現象。我們認為視頻化運動將至少持續3年。這也將支持Bilibili的成長，不只是1年，而是2年、3年，因為這將持續支持我們。

(foreign language)

（外語）

[Interpreted] The second thing is the young generation needs their own culture and entertainment content. We have half of our users are below 25 years old. Why they're using Bilibili? Because we are providing their own cultural and content product.

[解釋]第二點是年輕一代需要自己的文化和娛樂內容。我們的用戶中有一半年齡在 25 歲以下。他們為什麼要用 Bilibili？因為我們提供的是他們自己的文化和內容產品。

(foreign language)

（外語）

[Interpreted] Third point is the consumption upgrade is still the largest driving force within the consumption sector, and the content consumption will be a major part of it. The Z generation, the Z+ generation, are more willing to spend their money into spiritual and cultural products, cultural consumption.

【解讀】第三點，消費升級仍是消費領域最大的驅動力，而內容消費將是其中重要的一環。 Z世代、Z+世代更願意把錢花在精神文化產品、文化消費上。

(foreign language)

（外語）

[Interpreted] I believe Bilibili is on the front line of this movement. That's why these 3 points is supporting our continued sustainable growth in the future.

[翻譯] 我相信 Bilibili 處於這場運動的前線。這就是為什麼這三點支持我們未來持續永續成長。

(foreign language)

（外語）

[Interpreted] As you mentioned, indeed, for the past 2 quarters, our DAU growth rate has outpaced the MAU growth rate. That's because we have keep emphasizing that we will focus on the quality of the growth, which means the DAU and engagement level, time spent.

[解讀] 正如您所說，確實，在過去兩個季度，我們的 DAU 成長率超過了 MAU 成長率。這是因為我們一直強調我們將專注於成長的質量，即 DAU 和參與度以及花費的時間。

(foreign language)

（外語）

[Interpreted] And not only our DAU has surpassed the MAU growth rate, our daily user time spent has also improved sequential year-over-year for many quarters. And our daily video views grew over 80% and our user engagement, multiuser engagement numbers, has also grown significantly. So this is a very healthy model that the video views and engagement outpaced the DAU, and the DAU itself outpaced the MAU, means the community has become more sticky and engaged.

[解讀] 我們的 DAU 不僅超過了 MAU 的成長率，而且我們的每日用戶使用時間也連續多個季度逐年提高。我們的每日影片觀看量增加了 80% 以上，我們的用戶參與度和多用戶參與度也顯著成長。這是一個非常健康的模式，影片觀看和參與度超過了 DAU，而 DAU 本身超過了 MAU，這意味著社群變得更加黏性和參與度。

(foreign language)

（外語）

[Interpreted] On top of spending our money more wisely, we believe that our business model, which is the content ecosystem-driven business model, is more healthy.

[解讀]除了更明智地花錢之外，我們相信我們的商業模式，即內容生態系統驅動的商業模式，更加健康。

(foreign language)

（外語）

[Interpreted] As for our content categories, it has been very healthy across different verticals. Our traditionally strong anime, music, food, it's growing very healthily. We are also witnessing a lot of new category expansion. Because we have such a healthy ecosystem, you can continuously discover new content creator, very high-quality content.

[解釋] 就我們的內容類別而言，各個垂直領域的發展都非常健康。我們傳統上強勢的動漫、音樂、美食都在非常健康地發展。我們也見證了許多新類別的擴展。因為我們有如此健康的生態系統，所以你可以不斷發現新的內容創作者和非常高品質的內容。

And we have many, many new titles that went viral. For example, the phenomenal Second Uncle PUGV has been a perfect example of how Bilibili can continuously create high-quality content. And you can discover very talented content creator on our community.

我們有許多新作品廣受歡迎。例如現象級的二叔PUGV，就是B站持續打造優質內容的絕佳例證。您還可以在我們的社區中發現非常有才華的內容創作者。

(foreign language)

（外語）

[Interpreted] And secondly is our multi-scenario, multi-content category approach, is also helping us to grow healthily. As you may see from our platform, the PUGV live broadcasting, OGV and even the newly emerged Story Mode, they are all growing very nicely. And we are actively supplementing those video scenarios that's helping our users become more engaged.

[解讀]其次，我們的多場景、多內容類別的做法也有助於我們健康成長。正如大家從我們的平台上看到的，PUGV直播、OGV，甚至是新出現的故事模式，它們都發展得非常好。我們正在積極補充這些影片場景，以幫助我們的用戶提高參與度。

(foreign language)

（外語）

[Interpreted] Here, I wanted to lastly to -- wanted to really emphasize our MAU target, which is 400 million by end of next year. And we won't be achieving this number just for the sake of achieving a number, but we will be more focused on the quality of the user growth. As you can see, we're putting more emphasis on the DAU growth. We wanted to achieve a healthy and sustainable growth going forward. Thank you.

[口譯] 在這裡，我最後想強調一下我們的 MAU 目標，即到明年年底達到 4 億。我們不會僅僅為了實現一個數字而實現這個數字，而是會更加重視用戶成長的品質。如您所見，我們更加重視 DAU 的成長。我們希望未來能實現健康和永續的成長。謝謝。

Next question comes from Brian Gong from Citi.

下一個問題來自花旗銀行的 Brian Gong。

(foreign language) I will translate myself. My question is regarding the progress on Story Mode. The viewership has shown strong growth. Can management give more colors of the positioning and the strategy of the Story Mode? And how is the progress on Story Mode, like its ecosystem and the commercialization?

（外語）我自己來翻譯。我的問題是關於故事模式的進展。收視率呈現強勁成長。管理階層能否為故事模式的定位和策略賦予更多色彩？故事模式的生態系和商業化進展如何？

(foreign language)

（外語）

[Interpreted] For the past 2 quarters, we've seen a lot of attention being placed on the Story Mode. Indeed, we have delivered a very outstanding result of how Story Mode expanding its traffic. And the reason why behind that is partially because this is from 0. We're growing this from 0.

[解釋] 在過去的兩個季度中，我們看到人們對故事模式投入了大量的關注。確實，我們在故事模式如何擴大流量方面取得了非常出色的成果。背後的原因部分是因為這是從 0 開始的。我們從 0 開始發展。

However, I wanted to emphasize here is that overall -- our overall traffic is also growing very significantly. And Story Mode is the incremental traffic add on to our total traffic. For example, if you look at the total VV, we grew by 83% year-over-year. And the PUGV video views also grew over 50% year-over-year. Our Story Mode rose 400% from a very low base.

不過，我想在這裡強調的是，整體而言，我們的整體流量也在顯著成長。故事模式是我們總流量的增量流量附加價值。例如，如果你看一下整體 VV，我們比去年同期成長了 83%。 PUGV影片的觀看量也較去年同期成長了50%以上。我們的故事模式從非常低的基礎上升了 400%。

But I just wanted to emphasize, this is indeed a very nice incremental traffic growth to our ecosystem. But don't forget, our overall traffic is also growing very nicely.

但我只想強調，這對我們的生態系統來說確實是一個非常好的增量流量成長。但別忘了，我們的整體流量也在穩定成長。

(foreign language)

（外語）

[Interpreted] Here, we always talked about the strategy of growing multi-scenario, multi-content category, and Story Mode is the representation of that strategy. And Bilibili's video ecosystem is a comprehensive, full bodied, well-rounded content ecosystem that centers around PUGV. And along with live broadcasting, story and our smart TV application, all of that is a natural extension of our original PUGV ecosystem, whether it's adding a new scenario for users' fragmented time or allowing the original content creator to become live broadcasters, this comes from the original PUGV ecosystem.

[解讀] 在這裡，我們一直在談論多場景、多內容類別的發展策略，而故事模式就是這個策略的體現。而B站的視訊生態則是以PUGV為核心的全面、豐滿、完善的內容生態。而直播、故事以及我們的智慧電視應用，這些都是我們原有PUGV生態的自然延伸，無論是為用戶的分散時間增加了新的場景，或是讓原有的內容創作者成為直播主播，這都來自於原有的PUGV生態。

(foreign language)

（外語）

[Interpreted] As for the Story Mode, we believe it's a very important supplement to our original content ecosystem. This product satisfy users' on-the-go entertainment needs for their fragmented time and satisfies users' kill-time need for a 1- or 2-minute video. Probably there's 10 times of that need will come up during the day. And combined together, it would be a certain longer period of time.

[解讀] 至於故事模式，我們認為它是我們原有內容生態系統的一個非常重要的補充。該產品滿足了用戶在旅途中碎片時間的娛樂需求，滿足了用戶1、2分鐘影片的消磨時間需求。一天之內大概會有 10 倍這樣的需求出現。加在一起，這將是一段較長的時間。

(foreign language)

（外語）

[Interpreted] And more importantly, we believe the Story Mode has been very beneficial for us to improve the engagement level of those users that are less active. Some of them might think some of the video on Bilibili is too long or is more difficult to comprehend. The launch of Story Mode is helping them to quickly adapt into the Bilibili community, to help them understand, to give them a quick start to blend into our community.

[解釋] 更重要的是，我們相信故事模式對我們提高那些不太活躍的用戶的參與度非常有益。有些人可能認為 Bilibili 上的一些影片太長或較難理解。 Story Mode的推出，是為了幫助他們快速適應Bilibili社區，幫助他們理解，讓他們快速融入我們的社區。

(foreign language)

（外語）

[Interpreted] Additionally, Story Mode has been very beneficiary to the newly joined content creator or the content creator with fewer followers. In the past, for them to grow their followers, they have to spend a lot of time to create high-quality, longer period of PUGV. Now we are providing there a new option to create a lighter, shorter creation. And this smaller creation comes together, will help them to grow their followers more quickly.

[解讀]此外，故事模式對於新加入的內容創作者或粉絲較少的內容創作者非常有利。過去，為了增加粉絲，他們必須花費大量時間來製作高品質、更長週期的 PUGV。現在我們提供了一個新的選擇，以創建更輕、更短的作品。這些較小的創作匯集在一起，將幫助他們更快地增加追隨者。

(foreign language)

（外語）

[Interpreted] We are also noticing that this launch of Story Mode is helping those content creators who originally are good at creating short-form videos, are providing them additional opportunity to grow and expand their influence on Bilibili.

[解讀] 我們也注意到，這次Story模式的推出，正在幫助那些原本擅長創作短影片的內容創作者，為他們提供額外的發展機會，擴大他們在Bilibili的影響力。

In the second quarter, we've noticed that the number of content creators who achieved 1 million followers, 60% of them will benefit from the traffic growth of Story Mode.

在第二季度，我們注意到，在粉絲數量達到 100 萬的內容創作者中，60% 將受益於故事模式的流量成長。

(foreign language)

（外語）

[Interpreted] Lastly, I wanted to emphasize that even though it's a shorter, vertical video, but if you browse through the content, you can tell immediately this is Bilibili featured, high-quality video. The algorithm, the recommendation system behind the Story Mode, is identical to the PUGV algorithms. We put same amount of weighting and emphasize the content quality and users' positive feedback towards the content.

[翻譯] 最後，我想強調的是，雖然這是一個較短的垂直視頻，但如果你瀏覽內容，你可以立即知道這是 Bilibili 特色的高品質視頻。該演算法，即故事模式背後的推薦系統，與 PUGV 演算法相同。我們賦予相同的權重，並強調內容品質和使用者對內容的正面回饋。

(foreign language)

（外語）

[Interpreted] And additionally, our users are very inclined to engage within the Story Mode. From -- the data shows that the user who cast light in the Story Mode has been significantly higher than the Story Mode total percentage of revenue. That means that our users are recognizing the quality of the Story Mode videos.

[翻譯]此外，我們的使用者非常傾向於參與故事模式。從－數據顯示，在故事模式中投光燈的用戶收益已經明顯高於故事模式總收益的比例。這意味著我們的用戶認可故事模式影片的品質。

I believe, in the future, they will be definitely very typical and very popular Story Mode video born and went viral in the space, and there will also be original Bilibili Story Mode video content creator emerging. And we are already noticing that. For example, the content creator named [Shenchen Za Wuxing], would be a perfect example for the Story Mode typical high-quality content creator.

我相信，未來肯定會有非常典型、非常火爆的故事模式影片誕生，也會有原創的嗶哩嗶哩故事模式影片內容創作者湧現。我們已經注意到了這一點。例如這位名為【神辰雜五行】的內容創作者，就堪稱是Story Mode典型的優質內容創作者。

Next question comes from Xueqing Zhang from CICC.

下一個問題來自中金公司的張學慶。

(foreign language) And I will translate myself. And my question relates to advertising. Given the macro headwinds and the resurgence of COVID-19, what measures do we take to make the advertising business grow? And how does management think about the trend of the advertising scene in the second half of the year?

（外語）我自己會翻譯。我的問題與廣告有關。鑑於宏觀經濟逆風和新冠疫情的捲土重來，我們採取了哪些措施來推動廣告業務成長？管理階層如何看待下半年廣告市場的趨勢？

Also a follow-up question on Story Mode. We have launched advertising. How much utilization in Story Mode since April? So could you share more details about it?

還有一個關於故事模式的後續問題。我們已經推出廣告。自四月以來，故事模式的使用率是多少？那麼您能分享更多關於它的細節嗎？

(foreign language)

（外語）

[Interpreted] A combination of global macro economic challenges and repeated COVID outbreaks in China are not only causing significant impact on our advertising industry in the short term, but also will be a lasting impact in the next 1 to 2 years.

【解讀】全球宏觀經濟挑戰和國內新冠疫情反覆疊加，不僅在短期內對我國廣告業造成較大衝擊，而且將在未來1-2年產生持續性影響。

We've noticed that the budgeting is shrinking, advertisers have become more conscious when thinking about investing in brand advertising. And emerging industries are also struggling. So all of these factors are actually the status quo.

我們注意到預算正在縮減，廣告主在考慮投資品牌廣告時變得更加謹慎。新興產業也陷入困境。所以所有這些因素其實都是現狀。

At the same time, we've also noticed that the platform with high user value and high conversion efficiencies will stand out. However, it will still be tougher to do business, especially in ad business, if we are comparing to 2021 or prior years.

同時，我們也注意到，用戶價值高、轉換效率高的平台會脫穎而出。然而，與 2021 年或前幾年相比，做生意仍然會更加困難，尤其是廣告業務。

(foreign language)

（外語）

[Interpreted] Within this challenging macro environment for Bilibili's ad business in the second quarter, we grew our business 10% year-over-year. We are one of very few names that achieved year-on-year growth in the advertising sector and also achieved a market share gain.

[解讀]在第二季嗶哩嗶哩廣告業務面臨嚴峻的宏觀環境的情況下，我們的業務年增了10%。我們是廣告領域中少數幾個實現同比增長並且市場份額也增加的公司之一。

(foreign language)

（外語）

[Interpreted] What we'll do to cope with this change, we believe in every crisis lies great opportunity. In cope of the current challenges and opportunities, we raised our strategy for the next 3 years, which is growth-centered; community-prioritized; and content ecosystem plus commercialization, dual-engine powered. This is the first time we're putting commercialization and community ecosystem at an equally important position.

[翻譯] 我們將如何應對這種變化，我們相信每一次危機都蘊藏著巨大的機會。針對當前的挑戰和機遇，我們提出了未來3年的策略，即以成長為中心；社區優先；內容生態+商業化，雙引擎驅動。這是我們第一次將商業化和社區生態系統放在同等重要的位置。

(foreign language)

（外語）

[Interpreted] We have completely integrated the live broadcasting and video community on the organizational structure level and achieved live broadcasting plus video all in one structure. This helped us to create a closed loop ad in multi-scenarios. At the same time, we further integrate our commercialization system with our content ecosystem. Namely, we created 2 middle platforms, plus 2 business center structure.

【解讀】我們在組織架構層面徹底整合了直播和視訊社區，實現了直播+視訊一體的架構。這幫助我們在多場景下創建閉環廣告。同時，我們進一步將商業化體系與內容生態系整合。也就是我們打造了2個中台，加2個業務中心的架構。

(foreign language)

（外語）

[Interpreted] The 2 middle platforms, 2 business center. 1 is a large middle platform serving all commercialization efforts with the goal of improving traffic-linked monetization efficiency. This will be the infrastructure of our ad business and will also empower many income business segments.

[解讀] 2個中部平台，2個商務中心。 1是服務所有商業化的大中台，目標是提升流量賦能的效率。這將成為我們廣告業務的基礎設施，也將為許多收入業務部門賦能。

Another one is a smaller middle platform. Its main purpose is to serve and help our content creator to increase their earning power and improve their overall earning experience. And the 2 products will be, investors are familiar, Sparkle ad platform and the live video e-commerce product.

另一個是較小的中間平台。其主要目的是服務並幫助我們的內容創作者提高他們的賺錢能力並改善他們的整體賺錢體驗。這兩款產品將是投資人熟悉的Sparkle廣告平台和直播視訊電子商務產品。

And above mentioned adjustment will help our team bond together on a strategic thinking and execution level to create barrier-free self-reinforcing and positive cycle that stimulates our content ecosystem, user growth and business growth.

而上述調整，將有助於我們的團隊在策略思維和執行層面緊密結合，形成無障礙的自我強化和良性循環，從而刺激我們的內容生態、使用者成長和業務成長。

(foreign language)

（外語）

[Interpreted] Our advertising methods will be further iterated in the second half of this year, but the 2 following things will remain unchanged. One is focused on the infrastructure. Strengthen this construction of our algorithm and data power, optimizing -- optimize the realization of different scenarios and help improve efficiency of our products. We'll also look to build a scientific marketing system that's based on data construction.

[解讀]今年下半年我們的廣告方式會進一步迭代，但有兩點是不會變的。一是注重基礎建設。加強我們演算法和數據力的建設，優化－優化不同場景的實現，幫助提高我們產品的效率。我們也將致力於建立基於數據建構的科學行銷體系。

And the second thing remains unchanged, is to provide a well-rounded one-stop solutions for industry verticals, such as games, e-commerce, FMCG and automotive industries and et cetera. So that's the key accounts and industry -- different industry budgets we can fully absorb.

第二點不變的是，為遊戲、電商、快消品、汽車等垂直產業提供全方位的一站式解決方案。這就是我們可以充分吸收的關鍵客戶和產業——不同產業的預算。

(foreign language)

（外語）

[Interpreted] To see the trend for the second half revenue trajectories, we do expect that the overall app grossing will grow about 20% year-over-year in the third quarter, thanks to the ad efficiency improvement and the iteration of our integrated marketing solutions.

[解讀] 從下半年營收走勢來看，我們預期第三季整體應用營收將年增約 20%，這得益於廣告效率的提升和整合行銷解決方案的迭代。

And for the second half of this year, we do notice that the budget from brand advertisers remain largely uncertain due to the macro environment. However, our multi-scenario ad approaches, including the Story Mode ad, transaction-based ads, will help us to gain new market share.

對於今年下半年，我們確實注意到，由於宏觀環境的影響，品牌廣告商的預算仍然存在很大的不確定性。然而，我們的多場景廣告方法，包括故事模式廣告、基於交易的廣告，將幫助我們獲得新的市場份額。

(foreign language)

（外語）

[Interpreted] In Q3, we are looking to further open our ecosystem with our industry partners. We have already established initial partnerships with e-commerce platform, like Taobao, Tmall, Jingdong, Pinduduo. And we'll make active trial in models like making sales recommendation in our native ads and context transaction execution. Going forward, we'll also conduct various collaboration with brand advertisers and consumer goods players.

[解讀] 第三季度，我們希望與產業夥伴進一步開放我們的生態系統。我們已經與淘寶、天貓、京東、拼多多等電商平台建立了初步的合作關係。而我們會積極嘗試在原生廣告中進行銷售推薦、情境交易執行等模式。未來我們也將與品牌廣告商、消費品企業進行多種形式的合作。

In the short term, we can -- we believe we can achieve revenue growth driven by products like [Sparkle Story] and [Project Takeoff]. In the mid- to longer term, the above-mentioned collaboration will help us to establish a commercial environment and build user consumption behavior we believe we want it to. This can help us to create an ever-growing commercialization environment within our ever-growing content ecosystem.

短期內，我們相信我們能夠透過 [Sparkle Story] ​​和 [Project Takeoff] 等產品實現收入成長。從中長期來看，上述合作將幫助我們建立我們認為想要的商業環境和使用者消費行為。這可以幫助我們在不斷發展的內容生態系統中創造不斷發展的商業化環境。

(foreign language)

（外語）

[Interpreted] From an industry perspective, we will remain our edge in leading verticals, such as games, 3C and digital products, food and beverage, skin care and cosmetics. Among which, we believe we have standout in the mobile games, automotive and digital products. We've seen that in the first half of this year, our mobile games -- ad revenue from mobile games sector grow near 90% year-over-year, and ad revenue from automotive industry grew over 110% year-over-year.

[解讀]從產業角度來看，我們將在遊戲、3C及數位、食品飲料、護膚美妝等垂直領域繼續保持優勢。其中，我們認為我們在手機遊戲、汽車和數位產品領域表現突出。我們看到，今年上半年，我們的手機遊戲－來自手機遊戲領域的廣告收入較去年同期成長近90%，來自汽車產業的廣告收入較去年同期成長超過110%。

(foreign language)

（外語）

[Interpreted] You mentioned about the Story Mode. Indeed, it's a new ad scenario, and it's incremental traffic growth for our company. And we've also witnessed that the eCPM for Story Mode ads is also much higher compared to the traditional text and picture-based ads. This will help us to grow our advertising revenue in the short term.

[翻譯] 您提到了故事模式。確實，這是一個新的廣告場景，它為我們的公司帶來了流量的成長。我們還發現，與傳統的基於文字和圖片的廣告相比，故事模式廣告的有效每千次曝光費用 (eCPM) 也高得多。這將有助於我們在短期內增加廣告收入。

But if we look at a longer period of time, from 2023 to 2024, '25, the ad business growth will largely depend on our ability to build a well-rounded ecosystem that's ecosystem-based, industrialized, integrated marketing solution.

但如果我們將目光投向更長遠的時間，從 2023 年到 2024 年、2025 年，廣告業務的成長將很大程度上取決於我們建構完善的生態系統的能力，即基於生態系統的、工業化的、整合的行銷解決方案。

(foreign language)

（外語）

[Interpreted] Under the current challenging macro environment, we still hope and believe our ad revenue growth can be as healthy and as sustainable as our user and community growth. We are also confident to deliver and achieve win-win situation with our business partners. Thank you.

[解讀] 在當前充滿挑戰的宏觀環境下，我們仍然希望並相信我們的廣告收入成長能夠像我們的用戶和社群成長一樣健康和永續。我們也有信心與我們的業務夥伴實現雙贏。謝謝。

Thank you. And that concludes the question-and-answer session. I'd now like to turn the conference back to management for any additional or closing comments.

謝謝。問答環節到此結束。現在，我想將會議交還給管理層，以便他們發表任何補充或結束評論。

Thank you once again for joining us today. If you have further questions, please contact me, Juliet Yang, Bilibili Executive IR Director, or TPG Investor Relations. Our contact information for IR, both in China and in the U.S., can be found in today's press release. Okay. Thank you.

再次感謝您今天加入我們。如果您還有其他問題，請聯絡我、Bilibili 執行投資者關係總監 Juliet Yang 或 TPG 投資者關係部。我們的中國和美國 IR 的聯絡資訊可以在今天的新聞稿中找到。好的。謝謝。

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

謝謝。今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call]

[本記錄中標記為[已翻譯]的部分由現場翻譯人員朗讀]