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.

美好的一天，歡迎參加 Bilibili 2022 年第二季度財務業績和業務更新電話會議。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.

在這個時候，我想把會議交給投資者關係執行董事 Juliet Yang。謝謝你。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.

謝謝你，接線員。在這次電話會議中，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性，包括我們最近提交給美國證券交易委員會和香港聯交所的文件中提到的風險和不確定性，實際事件或結果可能與今天的新聞稿和本次討論中提及的內容存在重大差異。

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原則財務指標僅用於比較目的。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賬表。

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，本次電話會議的投資者介紹和網絡重播將在 Bilibili IR 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.

今天加入我們的還有B站董事長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 I will now turn the call over to Mr. Fan, who will read the prepared remarks on behalf of Mr. Chen.

我現在將把電話轉給范先生，范先生將代表陳先生宣讀準備好的發言。

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，謝謝大家參加我們的 2022 年第二季度業績電話會議。我很高興代表陳先生髮表今天的開幕詞。

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.

我們在第二季度遇到了[巨大的]逆風。期內，我們通過為用戶帶來改進的產品、擴大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 6 月上海解除封鎖，我們相信最嚴重的影響已經過去。重要的是，我們預計下半年將恢復營業利潤率，同時繼續增加用戶並縮小淨虧損。我們的總月活躍用戶在第二季度達到了 3.06 億的新紀錄，同比增長 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.

雖然我們仍然致力於實現 MAU 目標，但我們更加關注用戶質量，關注 DAU 和參與度等指標。第二季度，我們的 DAU 同比增長 33% 至 8400 萬，超過了 MAU 的增長率。這使我們的 D/M 比率從去年同期的 26.4% 上升到 27.3%。

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.

日均用時89分鐘，比去年同期增加9分鐘。更長的用戶時間和更高的用戶活動增加了我們的總用戶流量，同比增長 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以質量為導向的增長戰略將在戰略上使我們保持增長勢頭。

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%.

受充滿挑戰的宏觀環境影響，第二季度我們的總淨收入為人民幣49億元，同比增長9%。 NPU 同比增長 32% 至 2750 萬，我們的支付率為 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.

隨著 4 月和 5 月的放緩，我們的廣告業務在 6 月解除封鎖後反彈良好。隨著越來越受歡迎的廣告產品，例如故事模式中的廣告，我們的廣告收入同比增長了 10%。我們預計下半年將繼續擴大市場份額。

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.

在第二季度，我們還實施了進一步的成本控制措施。具體來說，我們將銷售和營銷費用同比削減了 16%。銷售和營銷費用佔總收入的比例從去年同期的 31% 下降至 24%。服務器和每個視頻觀看次數也同比下降了 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.

我們為提高組織效率而進行的其他調整，包括取消表現不佳的項目並將資源重新分配給核心業務。我們預計對我們的損益表的積極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，我們也對我們的組織進行了一些關鍵性的調整。我們的目標是更加符合我們的長期可持續增長。我們將直播的運營與我們的視頻平台整合在一起，並進行了組織變革，將我們在整個內容生態系統中的商業化工作整合在一起，創造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.

有了這個概述，我想詳細介紹一下我們第二季度在內容、社區和商業化方面的運營細節。我們已經看到了在線視頻空間的許多迭代。我們的產品一直保持擴張和引領潮流。故事模式、PUGV、直播、智能電視等不同格式的引入，極大地提升了我們隨時隨地觀看您喜歡的所有視頻的信號。

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，涵蓋了用戶的移動娛樂需求，在更短的時間內更有效地分發視頻。雖然 PUGV 的視頻瀏覽量同比增長 53%，但故事模式的視頻瀏覽量同比增長超過 400%，為我們的平台帶來了增量流量。這是我們在整個下半年看到的持續趨勢。此外，故事模式呈現出平行的商業前景，作為通往不同貨幣化機會的門戶，例如廣告和直播。

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，直播中的 MAU 滲透率繼續增長。 7 月，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，我們期望這兩個生態系統的結合能夠帶來更高效的流量執行和分配，並激發更多的內容創作者成為直播主。

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.

在第二季度，我們的用戶主要被生活方式、遊戲、娛樂、ACG 和知識類別所吸引。我們通過不斷增長的才華橫溢的創作者庫繼續積累大量內容。

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，我們每月平均提交 1320 萬份內容，同比增長 56%。我們的增長源於我們每月 360 萬活躍的內容創作者，同比增長 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，擁有 10,000 名粉絲的創作者數量同比增長 46%，擁有超過 100 萬粉絲的創作者增長更快，同比增長 58%。值得注意的是，在第二季度獲得 100 萬粉絲的內容創作者中，超過 60% 受益於快速增長的故事模式流量。

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.

我們將繼續拓寬渠道，以釋放內容創作者的變現潛力。第二季度，超過110萬創作者通過直播、廣告節目或現金獎勵計劃獲得金錢獎勵，比去年同期增長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。我們將繼續提供與用戶產生共鳴的強大內容，以及熱情的社區環境。我們在第二季度的用戶指標中看到了這一點，同比增長令人印象深刻。每日視頻觀看量增長 83% 至 31 億，每月互動量增長 73% 至 125 億。正如我之前提到的，平均每天花費的時間也同比增加了 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。第二季度，我們繼續轉化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.

首先看增值業務。增值服務淨收入為人民幣21億元，同比增長29%。我們在第二季度將更多流量轉化為付費用戶，這主要是由我們的直播推動的，鑑於我們視頻領域的這種自然延伸，我們在直播方面擁有獨特的優勢。儘管面臨更嚴格的監管挑戰，我們的直播轉化率在第二季度仍然保持強勁。

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.

通過將我們的 PUGV 生態系統與直播相結合，我們創造了一個雙贏的解決方案。二季度活躍直播主數量同比增長107%。我們的直播MAU滲透率持續增長，直播NPU同比增長近70%。同時，我們通過優化收益分成方案，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.

第二季度的高級會員達到 2100 萬，同比增長 19%。我們的大多數用戶仍然是年度或自動續訂訂閱者。

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。該板塊實現收入11.6億元，同比增長10%。儘管存在宏觀逆風，但我們在第二季度排名前 5 位的垂直領域是遊戲、數字和 3C 產品、護膚和化妝品、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戰略。在第二季度，我們將繼續投入資源，以多樣化的產品和改進的轉換模塊來擴展我們的廣告場景。我們還執行整合營銷活動作為銷售策略，以實現更多交叉銷售機會。我們在 4 月推出的 Story Mode 應用程序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。第二季度淨收入為人民幣10.5億元。國內市場新遊戲內容供應不足是上半年的主要挑戰。隨著國產遊戲審批流程恢復正常，我們期待看到進口遊戲的審批。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質量遊戲。

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，我們的自主開發遊戲收入貢獻了遊戲總收入的5%左右，主要得益於我們在多個國家和地區成功推出了Artery Gear。對於我們的管道。在國內，我們正在積極申請遊戲授權，並有 4 款遊戲獲准發行。我們正在籌備的 6 款遊戲，包括 2 款自行開發的遊戲，準備在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 年曆史的公司，我們的用戶數量和收入仍在強勁增長，我們預計未來會有很長的增長空間。我們的注意力和資源都集中在提高我們的收入和利潤上。考慮到這一點，我們計劃進一步提高我們的運營效率，收緊開支並加強我們的執行力。我們致力於在下半年提高我們的毛利率並縮小我們的經營虧損。

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。我現在將簡要概述我們 2022 年第二季度的財務業績和 2022 年第三季度的展望。

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.

第二季度總淨收入為人民幣 49.1 億元，較 2021 年同期增長 9%。按收入流劃分，我們的總淨收入約為 21% 的手機遊戲、43% 的增值服務、24% 的廣告和 12%電子商務等業務。

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.

收入成本同比增長 19% 至 42 億元人民幣。作為收入成本的關鍵組成部分的收入分成成本為人民幣 21 億元，較 2021 年同期增長 18%。服務器和帶寬成本作為相對固定成本的一部分，環比下降 9% -四分之一。每次視頻觀看的服務器和帶寬成本同比下降 37%，這表明了持續努力和成本節約取得進展的影響。

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.

第二季度我們的毛利潤為人民幣7.38億元，我們的毛利率為15%。我們正在積極收緊成本控制措施，提高運營效率。我們預計我們的毛利率將從本季度開始恢復。

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.

總營業費用為人民幣29億元，較2021年同期增長17%。銷售及營銷費用為人民幣12億元，同比下降16%。銷售和營銷費用佔總收入的比例為 24%，低於去年同期的 31%。同比下降主要是由於我們的手機遊戲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.

G&A費用為人民幣6.26億元，同比增長44%。增加的主要原因是一般人員人數增加、租金費用增加以及與優化組織結構相關的非經常性費用。研發費用11億元，同比增長68%。增加的主要原因是研發人員增加、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年第二季度的淨虧損和調整後的淨虧損分別為人民幣20億元和人民幣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.

轉向我們的資本分配和負債管理。截至 2022 年 6 月 30 日，我們總共回購了 260 萬張 ADS，總成本為 5360 萬美元。此外，我們回購了 2.75 億美元的 2026 年票據，總成本為 1.98 億美元截至 2022 年 6 月 30 日，未來現金儲蓄總額為 8400 萬美元。截至 2022 年 6 月 30 日，我們的現金及現金等價物、定期存款和短期投資為人民幣 249 億元，而去年為人民幣 132 億元。 2021 年 12 月 31 日。

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.

至於我們打算在香港聯交所主板進行[雙重]主要上市。關於擬議的轉換，我們在 2022 年 6 月 30 日舉行的公司年度股東大會上成功獲得了所有必要的股東批准。香港交易所也承認了我們的申請，將 2022 年 10 月 3 日定為建議生效日。我們的努力將擴大我們對更廣泛的投資者基礎的訪問，我們希望同時保持我們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 年第三季度的淨收入將在人民幣 56 億元至人民幣 58 億元之間。

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。我們現在想打開您的問題的電話。接線員，請繼續。

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

（操作員說明）我們的第一個問題來自美銀美林的張磊一行。

(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）我的問題主要是關於邊際簡介。我們注意到上半年我們採取了一些成本控制措施，特別是在銷售和營銷費用方面。那麼我們在其他成本項目中看到任何空間嗎？又該如何看待下半年的毛利率和淨利率走勢？

(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.

【解讀】分享一下我對成本控制和效率提升的一些想法。我們相信這個口號不僅僅是成本控制。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.

[解釋] 在當前極具挑戰性的宏觀環境和 COVID 影響下，各地的企業都面臨著非常具有挑戰性的環境。我一直在告訴我們的員工，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將最好的資源分配給我們的核心業務，以便在我們的核心業務上表現出色。如果它是非核心的，我們應該減少努力並專注於 - 最重要的事情。

(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？視頻和成長。增長不僅與用戶增長有關，還與我們的收入增長有關。

(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.

【解讀】所以今年上半年，我們一直在把我們所有的資源，包括我們的資金，都配置到我們核心的領域，也就是我們的視頻業務，用戶增長，能夠幫助我們擴張的領域。我們的頂線。

(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增長的重要性，因為我們相信增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】嗶哩嗶哩做著非常典型的互聯網平台業務。我們平台的價值真正來自於我們——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】我們看重用戶增長，但我們也在強調提高用戶增長效率，降低用戶增長成本。

(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，我們實現了——新用戶獲取成本持續下降。第二季度我們的銷售和營銷費用同比下降了 16%。銷售和營銷費用佔收入的百分比從去年同期的 31% 下降到第二季度的 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，隨著我們的成本下降，我們的用戶參與度和用戶留存率都在不斷提高。

(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.

[解讀] 提高效率也隨之而來——技術方面。本季度，我們優化技術資源配置，統一技術、基礎設施投入，集中力量解決重點問題。

(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 同比增長 33%。我們的視頻觀看量同比增長 83%。如您所知，我們視頻的分辨率已變得越來越重要。我們正在盡我們所能，在技術方面，改進算法，導致單位 VV 成本同比下降 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，今年，隨著我們的 DAU 顯著增長——我們花費的時間也同步增長，我們的服務器和帶寬成本、總費用的總投資不會超過最後——我們去年花了。這是我們如何使用技術提高效率的完美示例。

(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。我將回答關於毛利潤趨勢的問題。我們相信我們的第二季度業績已經反映了 COVID 封鎖的影響。我們預計我們的收入將在今年下半年的第三季度和第四季度恢復連續增長勢頭。

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，我們的毛利率將逐漸提高到第四季度的 20% 左右。正如陳主席所說，我們將繼續採取嚴格的費用控制措施。同時，因此我們預計我們的非美國通用會計準則淨虧損率也將從第二季度的 40% 左右縮小到第四季度的 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）我會自己翻譯。所以我的問題是在用戶方面。 BILI的MAU本季度已超過3億。我們還注意到，在第二季度，DAU 實際上超過了 MAU，每個用戶的平均使用時間也增長得相當不錯。所以我想知道，背後的驅動程序是什麼？管理層對下半年和 2023 年的 DAU 和 MAU 指標有何期望？

(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.

【解讀】我分享3點。眾所周知，全球宏觀環境發生了重大變化。但是，我們認為 Bilibili 的基本面保持不變。以下是支持我們成長的 3 點。

(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.

[解釋] 首先，視頻化是一種全球現象。我們認為視頻化運動至少會持續 3 年。這也將支持 Bilibili 的增長，不僅僅是 1 年，而是 2 年、3 年，因為這將繼續支持我們。

(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.

【解讀】第二件事是年輕一代需要自己的文化娛樂內容。我們有一半的用戶年齡在 25 歲以下。他們為什麼使用嗶哩嗶哩？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，消費升級仍是消費板塊的最大推動力，內容消費將是其中的主要部分。 Z一代，Z+一代，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.

【解讀】我相信嗶哩嗶哩走在了這場運動的最前線。這就是為什麼這三點支持我們未來的持續可持續增長。

(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】正如你所說，的確，在過去的兩個季度裡，我們的 DAU 增長率已經超過了 MAU 增長率。那是因為我們一直強調我們將關注增長的質量，這意味著 DAU 和參與度以及所花費的時間。

(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]不僅我們的 DAU 已經超過了 MAU 的增長率，我們的每日用戶使用時間也連續多個季度環比增長。我們的每日視頻觀看量增長了 80% 以上，我們的用戶參與度和多用戶參與度也顯著增長。所以這是一個非常健康的模式，視頻觀看次數和參與度超過了 DAU，而 DAU 本身也超過了 MAU，這意味著社區變得更有粘性和參與度。

(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，即內容生態驅動的商業模式，更健康。

(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] 至於我們的內容類別，它在不同的垂直領域都非常健康。我們傳統上強大的動漫、音樂、食物，它的成長非常健康。我們還目睹了許多新品類的擴張。因為我們有這樣一個健康的生態系統，你可以不斷發現新的內容創作者，非常優質的內容。

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.

而且我們有很多很多新的標題病毒式傳播。比如現象級的二叔PUGV，就是B站持續打造優質內容的完美典範。您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】其次是我們的多場景、多內容品類的方式，也在幫助我們健康成長。從我們的平台大家可以看到，PUGV直播、OGV，甚至新出現的故事模式，都在發展的很好。我們正在積極補充那些幫助我們的用戶變得更加參與的視頻場景。

(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.

[解釋] 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。而且我們不會僅僅為了達到這個數字而達到這個數字，而是我們將更加關注用戶增長的質量。如您所見，我們更加重視 DAU 的增長。我們希望在未來實現健康和可持續的增長。謝謝你。

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）我會自己翻譯。我的問題是關於故事模式的進展。收視率呈現強勁增長勢頭。管理層能否為故事模式的定位和策略賦予更多色彩？故事模式的進展如何，比如它的生態系統和商業化？

(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，我們看到很多注意力都放在了故事模式上。事實上，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。我們正在從 0 開始增長。

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.

但是，我想在這裡強調的是，總體而言——我們的整體流量也在顯著增長。故事模式是增加我們總流量的流量。例如，如果您查看總 VV，我們同比增長了 83%。 PUGV 視頻觀看量也同比增長超過 50%。我們的故事模式從非常低的基數上升了 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增長。但不要忘記，我們的整體流量也增長得非常好。

(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，我們一直在講多場景、多內容品類的成長策略，故事模式就是這個策略的體現。而嗶哩嗶哩的視頻生態是一個以PUGV為核心的全面、飽滿、全面的內容生態。而隨著直播、故事和我們的智能電視應用，這一切都是我們原有的PUGV生態系統的自然延伸，無論是為用戶碎片化時間增加新場景，還是讓原創內容創作者成為直播者，這一切都來了來自原始的 PUGV 生態系統。

(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】對於故事模式，我們認為它是對我們原創內容生態系統的一個非常重要的補充。該產品滿足用戶對碎片化時間的旅途娛樂需求，滿足用戶對1分鐘或2分鐘視頻的消遣需求。白天可能會出現 10 次這種需求。而加在一起，那將是一段更長的時間。

(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。他們中的一些人可能會認為 Bilibili 上的某些視頻太長或者更難以理解。故事模式的推出，幫助他們快速適應 B站社區，幫助他們理解，讓他們快速開始融入我們的社區。

(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】另外，故事模式對於新加入的內容創作者或關注者較少的內容創作者來說，是非常受益的。過去，為了增加粉絲，他們必須花費大量時間來打造高質量、較長周期的PUGV。現在我們提供了一個新選項來創建更輕、更短的創作。而這個較小的創作聚集在一起，將幫助他們更快地培養他們的追隨者。

(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，故事模式的推出正在幫助那些原本擅長製作短視頻的內容創作者，為他們提供了更多的機會來發展和擴大他們對 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，我們注意到達到 100 萬粉絲的內容創作者數量，其中 60% 將受益於故事模式的流量增長。

(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.

【解讀】最後，我想強調的是，雖然是短視頻，但如果你瀏覽內容，你可以立即看出這是B站特色的高質量視頻。故事模式背後的推薦系統算法與 PUGV 算法相同。我們給予相同的權重，並強調內容質量和用戶對內容的積極反饋。

(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.

[解釋]此外，我們的用戶非常傾向於參與故事模式。來自——數據顯示，在故事模式中投光的用戶已經明顯高於故事模式總收入的百分比。這意味著我們的用戶正在認可故事模式視頻的質量。

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.

相信在未來，它們一定會是非常典型、非常流行的Story Mode視頻，在空間裡誕生並走紅，也會有原創的Bilibili Story Mode視頻內容創作者湧現。我們已經註意到了這一點。比如，名為【神塵雜星】的內容創作者，就是故事模式典型的優質內容創作者的完美典範。

Next question comes from Xueqing Zhang from CICC.

下一個問題來自中金公司的張學清。

(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）我會自己翻譯。我的問題與廣告有關。鑑於宏觀逆風和 COVID-19 的複蘇，我們採取了哪些措施來使廣告業務增長？管理層如何看待下半年的廣告場景趨勢？

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。我們推出了廣告。自 4 月以來，故事模式的利用率有多少？那麼你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中國反复爆發的新冠肺炎疫情，不僅在短期內對我們的廣告業造成重大影響，而且在未來1至2年內將產生持久影響。

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，廣告商在考慮投資品牌廣告時變得更加自覺。新興產業也在苦苦掙扎。所以所有這些因素實際上都是現狀。

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，我們也注意到高用戶價值和高轉化效率的平台會脫穎而出。但是，如果我們與 2021 年或之前的年份相比，做生意仍然會更加困難，尤其是在廣告業務方面。

(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B站廣告業務二季度充滿挑戰的宏觀環境下，我們的業務同比增長10%。我們是為數不多的在廣告領域實現同比增長並獲得市場份額增長的公司之一。

(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.

[解讀]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遇。為應對當前的挑戰和機遇，我們提出了以增長為核心的未來3年戰略；社區優先；和內容生態系統加上商業化，雙引擎驅動。這是我們第一次將商業化和社區生態系統置於同等重要的位置。

(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將直播和視頻社區完全融合，實現了直播+視頻一體化。這有助於我們在多場景中創建閉環廣告。同時，我們進一步將我們的商業化系統與我們的內容生態系統相結合。即我們創建了2個中間平台，加上2個業務中心結構。

(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個中間平台，2個商務中心。 1是一個服務於所有商業化工作的大型中間平台，旨在提高流量掛鉤的貨幣化效率。這將是我們廣告業務的基礎設施，也將為許多收入業務部門提供支持。

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.

另一種是較小的中間平台。其主要目的是服務和幫助我們的內容創作者增加他們的賺錢能力並改善他們的整體賺錢體驗。而這2個產品將是投資者熟悉的Sparkle廣告平台和直播電商產品。

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.

上述調整將幫助我們的團隊在戰略思維和執行層面上凝聚在一起，創造無障礙的自我強化和良性循環，刺激我們的內容生態系統、用戶增長和業務增長。

(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，但以下2點保持不變。一是專注於基礎設施。加強我們的算法和數據力量的這個建設，優化——優化不同場景的實現，幫助提高我們產品的效率。我們還將尋求建立一個基於數據構建的科學營銷體系。

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.

而第二點不變，就是為垂直行業提供完善的一站式解決方案，如游戲、電商、快消品和汽車行業等。這就是關鍵客戶和行業——我們可以完全吸收的不同行業預算。

(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】看下半年收入軌蹟的走勢，我們確實預計，得益於廣告效率的提升和整合營銷的迭代，第三季度整體應用總收入將同比增長20%左右解決方案。

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.

而對於今年下半年，我們確實注意到，由於宏觀環境，品牌廣告商的預算在很大程度上仍不確定。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] 在第三季度，我們希望與我們的行業合作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、拼多多等電子商務平台建立了初步的合作關係。我們將積極嘗試在我們的原生廣告中進行銷售推薦和上下文交易執行等模型。展望未來，我們還將與品牌廣告商和消費品玩家進行各種合作。

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.

在短期內，我們可以——我們相信我們可以實現由 [Sparkle Story] 和 [Project Takeoff] 等產品推動的收入增長。從中長期來看，上述合作將幫助我們建立商業環境並建立我們認為我們想要的用戶消費行為。這可以幫助我們在我們不斷增長的內容生態系統中創建一個不斷增長的商業化環境。

(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】從行業角度來看，我們將在遊戲、3C及數碼產品、食品飲料、護膚品和化妝品等垂直領域保持領先優勢。其中，我們相信我們在手機遊戲、汽車和數碼產品方面表現突出。我們看到，今年上半年，我們的手機遊戲——手機遊戲廣告收入同比增長近90%，汽車行業廣告收入同比增長超過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.

[解釋] 你提到了故事模式。事實上，這是一個新的廣告場景，對我們公司來說是增量流量增長。我們還見證了故事模式廣告的 eCPM 也比傳統的基於文字和圖片的廣告高得多。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.

但如果我們放眼更長的時間，從 2023 年到 2024 年，25 年，廣告業務的增長將在很大程度上取決於我們構建一個基於生態系統、工業化、整合營銷解決方案的全面生態系統的能力。

(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增長能夠像我們的用戶和社區增長一樣健康和可持續。我們也有信心與我們的業務合作夥伴交付並實現雙贏。謝謝你。

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.

謝謝你。問答環節到此結束。我現在想將會議轉回管理層，以獲取任何額外的或結束的評論。

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，請聯繫我、Bilibili 執行 IR 總監 Juliet Yang 或 TPG 投資者關係部。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。好的。謝謝你。

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

謝謝你。今天的電話會議到此結束。感謝您的參與。您現在可以斷開連接。

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

[此成績單中標記為 [已翻譯] 的部分由現場通話中的口譯員說出]