Bilibili Inc (BILI) 2023 Q1 法說會逐字稿

Good day, and welcome to the Bilibili First Quarter 2023 Financial Results and Business Update Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Juliet Yang, Executive Director of Investor Relations. Please go ahead.

美好的一天，歡迎來到 Bilibili 2023 年第一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。此時，我想將會議轉交給投資者關係執行總監 Juliet Yang。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 filing with the SEC and Hong Kong Stock Exchange. The non-GAAP financial measures 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.

謝謝你，運營商。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。這些評論基於我們截至今天的預測和期望。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性，實際事件或結果可能與今天的新聞稿和本次討論中提到的事件或結果存在重大差異。我們提供的非 GAAP 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調節表。

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

提醒一下，正在錄製此電話會議。此外，Bilibili IR 網站 ir.bilibili.com 還將提供投資者介紹和本次電話會議的網絡直播重播。

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

今天從 Bilibili 高級管理層加入我們的是董事會主席兼首席執行官陳睿先生；董事會副主席兼首席運營官 Carly Li 女士；以及首席財務官 Sam Fan 先生。我現在將電話轉給范先生，他將代表陳先生宣讀準備好的發言稿。

Thank you, Juliet, and thank you, everyone, for participating in our 2023 first quarter 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 2023 年第一季度的電話會議。我很高興代表陳先生髮表今天的開場白。

Our top priority for 2023 is to improve our commercialization efficiency and narrow our losses. Our first quarter results demonstrate that we are making solid progress on these goals. First, we delivered over 20% year-on-year revenue growth from our advertising business. Our gross margin improved to 22% in the first quarter, up from 16% a year ago, driving gross profit to increase by 37% year-over-year.

我們 2023 年的首要任務是提高我們的商業化效率並縮小我們的損失。我們第一季度的業績表明，我們在實現這些目標方面取得了穩步進展。首先，我們的廣告業務收入同比增長超過 20%。我們第一季度的毛利率從一年前的 16% 提高到 22%，推動毛利潤同比增長 37%。

Second, we continue to take measures to strengthen the execution of our expense controls. As a result, we reduced the total operating expenses in first quarter by 11% year-over-year. Specifically, we cut our sales and marketing expenses by 30% year-over-year while continuing to expand our DAUs. These actions are proving effective in strengthening our bottom line.

二是繼續採取措施加強費用管控力度。因此，我們第一季度的總運營費用同比減少了 11%。具體來說，我們將銷售和營銷費用同比削減了 30%，同時繼續擴大我們的 DAU。事實證明，這些行動有效地加強了我們的底線。

In the first quarter, we narrowed our net loss by 72% year-over-year. The progress we have made give us confidence that we are on the right track to achieve our breakeven target.

第一季度，我們的淨虧損同比收窄了 72%。我們取得的進展讓我們相信，我們正走在實現盈虧平衡目標的正確軌道上。

While we focus on improving our financial metrics, we continue to attract more users and enhance the engagement levels of our community. In the first quarter, our DAUs grew by 18% year-over-year to 93.7 million, while our MAUs reached 315 million, driving our D/M ratio up to 29.7% from 27% a year ago.

在我們專注於改善財務指標的同時，我們繼續吸引更多用戶並提高社區的參與度。第一季度，我們的 DAU 同比增長 18% 至 9370 萬，而我們的 MAU 達到 3.15 億，推動我們的 D/M 比率從一年前的 27% 上升至 29.7%。

Our users continue to value our evolving and diverse content with the average user daily time spend on Bilibili reached 96 minutes in the first quarter. This brought the total time spent on our platform, up 19% year-over-year.

我們的用戶繼續重視我們不斷發展和多樣化的內容，第一季度用戶平均每天花在嗶哩嗶哩上的時間達到 96 分鐘。這使得在我們平台上花費的總時間同比增長了 19%。

As we move through the year, we will continue to populate our DAUs in a cost-effective manner, streamline our organization and improve our overall commercialization efficiency. In this way, we can better allocate our resources to areas that further solidify our community, namely, we are working to expand our creator base and help our creators make more money. We will also continue to invest in commercialization capabilities, including improving our ad infrastructure, further integrating live broadcasting and video operations, developing high-quality in-house games as well as exploring AIGC opportunities in our content community, all of which will help us build a tighter community and unleash more commercial potential of our platform.

在這一年中，我們將繼續以具有成本效益的方式填充我們的 DAU，精簡我們的組織並提高我們的整體商業化效率。通過這種方式，我們可以更好地將我們的資源分配到進一步鞏固我們社區的領域，即我們正在努力擴大我們的創作者基礎並幫助我們的創作者賺更多的錢。我們還將繼續投資於商業化能力，包括改善我們的廣告基礎設施、進一步整合直播和視頻運營、開發高質量的自研遊戲以及在我們的內容社區中探索 AIGC 機會，所有這些都將幫助我們建立一個更緊密的社區，釋放我們平台的更多商業潛力。

With that overview of our progress, I'd now like to provide a brief update on our three core pillars: content, community and commercialization. Starting with content. Our content creators are essential component of our ecosystem. We are dedicated to building a community that enables them to recognized and be rewarded. As we provide more user-friendly editing tools, professional content operation support and improve the traffic distribution mechanisms that will allow to nurture content creators, we can increase the volume of content creation and attract more creators to our platform.

通過對我們進展的概述，我現在想簡要介紹一下我們的三個核心支柱：內容、社區和商業化。從內容開始。我們的內容創作者是我們生態系統的重要組成部分。我們致力於建立一個社區，使他們能夠得到認可和獎勵。通過提供更加人性化的編輯工具、專業的內容運營支持和完善的流量分配機制，培養內容創作者，我們可以增加內容創作量，吸引更多創作者加入我們的平台。

In the first quarter, the number of our daily active content creators increased by 42% with a 79% increase in monthly content submissions, both on a year-over-year basis. By further integrating our commercial channels with our content ecosystem, we continue to empower more content creator to realize their commercial value through diverse avenues.

第一季度，我們的每日活躍內容創作者數量同比增長 42%，每月內容提交量增長 79%。通過進一步整合我們的商業渠道與我們的內容生態系統，我們繼續賦能更多的內容創作者通過多種途徑實現他們的商業價值。

Different content creators can monetize their talent from what they are good at, such as advertising, live broadcasting, online paid courses and workshop. Leveraging our platform and support, over 1.5 million content creators, earned incomes through multiple channels in the first quarter, an increase of 50% year-over-year. Among them, the number of content creators who earn income by channels other than our cash incentive program increased by over 55% year-over-year. Going forward, we will continue to develop more channels and products to enable our content creators to achieve their commercial value.

不同的內容創作者可以從他們擅長的領域變現，比如廣告、直播、在線付費課程和工作坊。借助我們的平台和支持，超過 150 萬內容創作者在第一季度通過多種渠道獲得收入，同比增長 50%。其中，通過現金激勵計劃以外的渠道獲得收入的內容創作者數量同比增長超過 55%。展望未來，我們將繼續開發更多的渠道和產品，使我們的內容創作者能夠實現他們的商業價值。

Our multi-scenario products, such as Story Mode also contribute to attract broader attention from users and satisfy their diversified video watching preferences. For the first quarter, our total daily video views increased by 37% to 4.1 billion. Story Mode's daily video views grew by 82% and the PUGV video views were up 26% in the first quarter, both on a year-over-year basis. Solid consumption trends in Story Mode are ongoing and continue to present more opportunities for accumulating our DAUs, enhancing community engagement levels as well as increasing our commercialization potential.

我們的故事模式等多場景產品也有助於吸引用戶更廣泛的關注，滿足他們多樣化的視頻觀看偏好。第一季度，我們的每日視頻總觀看次數增長了 37%，達到 41 億次。第一季度故事模式的每日視頻觀看量增長了 82%，而 PUGV 視頻觀看量同比增長了 26%。故事模式中的穩定消費趨勢正在持續，並繼續為積累我們的 DAU、提高社區參與度以及增加我們的商業化潛力提供更多機會。

In addition, we are exploring the integration of AI applications into our content ecosystem. Utilizing AIGC can enhance both content creation efficiency and our user experience. We believe we hold great promise and a tremendous potential for the video industry.

此外，我們正在探索將 AI 應用程序集成到我們的內容生態系統中。利用 AIGC 可以提高內容創建效率和我們的用戶體驗。我們相信我們對視頻行業有著巨大的希望和巨大的潛力。

Leveraging these evolving technology, we can further enrich our content supply, empowering our creators to bring their vision to life more easily and effectively. We are also beta testing new features powered by AIGC to further enhance user experience.

利用這些不斷發展的技術，我們可以進一步豐富我們的內容供應，使我們的創作者能夠更輕鬆、更有效地實現他們的願景。我們還在 Beta 測試由 AIGC 提供支持的新功能，以進一步提升用戶體驗。

As for our community, our user base remains sticky and highly engaged. The users' average daily time spend on Bilibili continue to show stability at 96 minutes. Monthly interactions was also up 15% year-over-year to 14.2 billion. Our core user cohort of official members reached 205 million in the first quarter, showing a 29% increase year-over-year. The 12 months retainer rate for official members also remained around 18%. Our loyal and active community allow us to explore more diverse and community-based exclusive products and services further opening up more commercial opportunities.

至於我們的社區，我們的用戶群保持粘性和高度參與。用戶平均每天花在嗶哩嗶哩上的時間繼續穩定在96分鐘。每月互動次數也同比增長 15% 至 142 億次。第一季度，我們的官方會員核心用戶群達到 2.05 億，同比增長 29%。正式會員的12個月保留率也保持在18%左右。我們忠誠而活躍的社區使我們能夠探索更多樣和基於社區的獨家產品和服務，進一步開闢更多的商業機會。

Now let's review our commercialization where we are improving how we monetize our offerings to drive margin expansion and narrow our losses. For the first quarter, our total revenues reached RMB 5.1 billion. Specifically, revenue from advertising business increased by 22% year-over-year. We continue to take proactive steps to improve our commercialization efficiency to support our top line and increase our gross margin at the company level.

現在讓我們回顧一下我們的商業化，我們正在改進我們如何將我們的產品貨幣化以推動利潤擴張和縮小我們的損失。第一季度，我們的總收入達到人民幣 51 億元。具體而言，廣告業務收入同比增長22%。我們繼續採取積極措施來提高我們的商業化效率，以支持我們的收入並增加我們在公司層面的毛利率。

Looking at this in more detail. First, revenue from our VAS business increased by 5% year-over-year to RMB 2.2 billion for first quarter, mainly driven by the growth of our live broadcasting business. We continue to integrate our live broadcasting capabilities within our video ecosystem. As one of the primary ways for creators to monetize their talent, more creators are making the transition to live broadcasting hosts. In the first quarter, the number of monthly active live broadcasting hosts increased by 34% year-over-year, and the number of live broadcasting paying users increased by 15% year-over-year. We have also improved the gross margin of live broadcasting business on both initial and year-on-year basis, and we expect the trend will continue.

更詳細地看這個。首先，第一季度增值業務收入同比增長 5% 至人民幣 22 億元，主要受直播業務增長的推動。我們繼續將我們的直播功能整合到我們的視頻生態系統中。作為主播變現的主要方式之一，越來越多的主播正在向主播轉型。一季度，直播月活躍主播數同比增長34%，直播付費用戶數同比增長15%。我們還提高了直播業務的初始和同比毛利率，我們預計這一趨勢將持續下去。

By the end of March, we had 20.2 million premium members. Over 80% of these were annual or auto renew package subscribers, which represents users strong trust in our brand and content offerings.

截至 3 月底，我們擁有 2020 萬高級會員。其中超過 80% 是年度或自動續訂套餐訂閱者，這表明用戶對我們的品牌和內容產品非常信任。

Turning to our advertising business. Our ad revenues increased by 22% year-over-year to RMB 1.3 billion in the first quarter, largely resulting from our ad infrastructure improvements. Over past year, we have expanded and optimized our ad product offerings. At the same time, we have been continuously building our commercial database and improving our ad algorithm to drive better ROI for our clients. The results are encouraging.

談談我們的廣告業務。第一季度，我們的廣告收入同比增長 22% 至人民幣 13 億元，這主要歸功於我們的廣告基礎設施改進。在過去的一年裡，我們擴展並優化了我們的廣告產品。與此同時，我們一直在不斷構建我們的商業數據庫並改進我們的廣告算法，以為我們的客戶帶來更好的投資回報率。結果令人鼓舞。

Performance-based ads revenue record nearly 50% year-on-year growth in the first quarter, while brand ads and native ads also recorded positive year-on-year growth.

第一季度效果廣告收入同比增長近50%，品牌廣告和原生廣告也實現了同比正增長。

Our top-performing verticals for the first quarter were game, digital products and home appliance, e-commerce, skin care and cosmetics and automotive. Users are showing increased spending power and diversified consumption needs as they grow to new live stages. This dynamic is attracting more advertisers from broader vehicles to our platform such as automotive and home appliance.

我們第一季度表現最好的垂直行業是遊戲、數碼產品和家電、電子商務、護膚品和化妝品以及汽車。用戶成長到新的生活階段，消費能力增強，消費需求多樣化。這種動態正在吸引更多來自更廣泛車輛的廣告商到我們的平台，例如汽車和家用電器。

Looking now at our game business. Revenues for the first quarter were RMB 1.1 billion, as the rate of game approvals begin to normalize, we welcome the more titles into our pipeline. We plan to release 8 new titles in the domestic markets in coming quarters. This includes Cygames' highly anticipated game Pretty Derby, (foreign language) our first self-development game in the female romance genre and our self-development ACG card game, Eruthyll. In addition, we successfully co-published the HonKai Star Rail (foreign language) in April and Reverse 1999 (foreign language) in May, demonstrating our strong distribution capabilities.

現在看看我們的遊戲業務。第一季度收入為人民幣 11 億元，隨著遊戲審批率開始正常化，我們歡迎更多遊戲進入我們的管道。我們計劃在未來幾個季度在國內市場發布 8 款新遊戲。其中包括Cygames備受期待的遊戲Pretty Derby（外文）我們首款自研女性愛情題材遊戲和我們自研的二次元卡牌遊戲《Eruthyll》。此外，我們於4月和5月成功合作出版了《崩壞星軌》（外文）和《逆行1999》（外文），展示了我們強大的發行能力。

Turning to our IP derivatives and others, previously known as e-commerce and others. Revenues for the first quarter was RMB 510 million, a decrease of 15% year-over-year. The decrease in revenue was mainly due to a proactive strategy shift to focus on increasing profitability. In the first quarter, margin for IP derivatives and others improved meaningfully by this approach, and we expect it will continue to improve going forward.

轉向我們的IP衍生品和其他，以前稱為電子商務和其他。第一季度收入為人民幣5.1億元，同比下降15%。收入減少主要是由於主動戰略轉變為專注於提高盈利能力。在第一季度，IP 衍生品和其他產品的利潤率通過這種方法得到了顯著改善，我們預計它將繼續改善。

Lastly, we recently published our 2022 annual ESG report, which highlights the value we create and bring to young generations in China. We are committed to shouldering our social responsibilities, fostering a welcoming community for our users and creators and working towards a sustainable future for all.

最後，我們最近發布了 2022 年度 ESG 報告，其中強調了我們為中國年輕一代創造和帶來的價值。我們致力於承擔我們的社會責任，為我們的用戶和創作者營造一個溫馨的社區，並為所有人的可持續未來而努力。

In summary, the actions we have taken are effectively improving our financial performance and operating capabilities. While we continue to grow our dynamic community, throughout this year, we will further execute our strategy and continue to expand our gross margin and narrow our losses.

綜上所述，我們所採取的行動有效地提升了我們的財務業績和運營能力。在我們繼續發展我們充滿活力的社區的同時，在今年全年，我們將進一步執行我們的戰略並繼續擴大我們的毛利率並縮小我們的虧損。

This concludes Mr. Chen's remarks. I will now provide a brief overview of our financial results for the first quarter of 2023 and our outlook for the year.

陳先生的發言到此結束。我現在將簡要概述我們 2023 年第一季度的財務業績和今年的展望。

Total net revenues for the first quarter was RMB 5.1 billion, flat compared with the same period last year. Our total net revenue breakdown by revenue stream was approximately 43% VAS, 25% advertising, 22% mobile games and 10% for our IP derivative and others. Our cost of revenues decreased by 7% year-over-year, driving our gross profit to RMB 1.1 billion, up 37% year-over-year. While our gross margin was 22%, up from 16% from the same period last year. With our tightly controlled cost structure we expect to show continued margin improvements throughout 2023.

第一季度總淨收入為人民幣51億元，與去年同期持平。我們按收入流劃分的總淨收入細分約為 43% 的增值服務、25% 的廣告、22% 的手機遊戲和 10% 的 IP 衍生品及其他。我們的收入成本同比下降 7%，推動我們的毛利達到人民幣 11 億元，同比增長 37%。而我們的毛利率為 22%，高於去年同期的 16%。憑藉我們嚴格控制的成本結構，我們預計整個 2023 年利潤率將持續改善。

Our total operating expenses were down 11% year-over-year and fell to 1% quarter-over-quarter. We are maintaining tight control of our expenses while we work to increase our commercial prospects. We cut sales and marketing expenses by 30% year-over-year, while our DAUs grew by 18% year-over-year. As a percentage of total revenue, sales and marketing was 17% compared with 25% in the same period last year. G&A expenses was RMB 572 million, up 7% year-over-year. R&D expenses was RMB 1 billion, representing a 2% increase year-over-year. We expect to continue strict control of our operating expense going forward.

我們的總運營費用同比下降 11%，環比下降至 1%。我們在努力增加商業前景的同時，嚴格控制開支。我們將銷售和營銷費用同比削減了 30%，而我們的 DAU 同比增長了 18%。銷售和營銷佔總收入的百分比為 17%，而去年同期為 25%。 G&A 費用為人民幣 5.72 億元，同比增長 7%。研發費用10億元，同比增長2%。我們希望在未來繼續嚴格控制我們的運營費用。

Our net loss and adjusted net loss was RMB 630 million and RMB 1 billion, narrowing by 72% and 38% year-over-year, respectively. Our net loss ratio in the first quarter was 12%, narrowed from 45% for the same period a year ago.

我們的淨虧損和調整後淨虧損分別為人民幣 6.3 億元和人民幣 10 億元，同比分別收窄 72% 和 38%。我們第一季度的淨虧損率為 12%，較去年同期的 45% 有所收窄。

Turning to our capital allocation and liability management. We currently have three outstanding CBs that totaled USD 1.6 billion. Among these, a total principal amount of USD 746 million of 2027 CB has an upcoming put rights, which are exercisable through June of this year. As of March 31, 2023, we had cash and cash equivalents, time deposits and short-term investments of RMB 19.4 billion or USD 2.8 billion. We believe this amount is sufficient to cover all of our remaining convertible CBs and fund our future operations, including the put rights on our 2027 CBs.

轉向我們的資本配置和負債管理。我們目前擁有三項未完成的 CB，總額為 16 億美元。其中，本金總額為7.46億美元的2027 CB擁有即將到期的認沽權，行權期至今年6月。截至 2023 年 3 月 31 日，我們擁有現金及現金等價物、定期存款和短期投資 194 億元人民幣或 28 億美元。我們認為這一數額足以支付我們所有剩餘的可轉換可換股債券並為我們未來的運營提供資金，包括我們 2027 年可換股債券的認沽權。

With that in mind, we iterate our expectation for net revenue for the full year of 2023 to be between RMB 24 billion and RMB 26 billion.

考慮到這一點，我們重申對 2023 年全年淨收入的預期在 240 億元人民幣至 260 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。我們現在想打開您的問題的電話。接線員，請繼續。

Thank you. (Operator Instructions) Now we're to take our first question. And the question comes from the line of Daniel Chen from JPMorgan.

謝謝。 （操作員說明）現在我們要回答第一個問題。問題來自摩根大通的Daniel Chen。

(foreign language) I will translate myself. So I have a question related to the user growth. So we saw that we have -- under the situation that of lower sales and marketing expense in the first quarter, we actually have a sustainable growth of daily active user in the first quarter and a higher DAU to MAU ratio in the first quarter. So could management maybe share a little bit on the future user growth, outlook and also strategy?

（外語）我會自己翻譯。所以我有一個與用戶增長相關的問題。所以我們看到，在第一季度銷售和營銷費用較低的情況下，我們實際上在第一季度實現了每日活躍用戶的可持續增長，並且在第一季度實現了更高的 DAU 與 MAU 比率。那麼，管理層能否就未來的用戶增長、前景和戰略分享一些信息？

[Interpreted] Like I said on previous earnings calls, we have adopted a more quality-oriented approach to user growth and by quality, I'm specifically referring to DAU growth.

[解讀] 就像我在之前的財報電話會議上所說的那樣，我們採用了一種更加註重質量的用戶增長方法，我特別指的是 DAU 增長。

At this current stage, one of our top priorities is to improve the efficiency of commercialization. High-quality DAU growth and user engagement are the cornerstone of strengthening commercialization.

現階段，我們的首要任務之一是提高商業化的效率。高質量的 DAU 增長和用戶參與度是加強商業化的基石。

This quality-oriented user growth strategy that we have to pivot away from MAU towards DAU. And over the last several quarters, we have achieved sales and marketing expense reductions while our DAU number continued to climb up. In Q1, sales and marketing expense was down by 30%, but our DAU increased by 18% to 93.7 million.

這種以質量為導向的用戶增長戰略，我們必須從 MAU 轉向 DAU。在過去的幾個季度中，我們實現了銷售和營銷費用的削減，同時我們的 DAU 數量繼續攀升。第一季度，銷售和營銷費用下降了 30%，但我們的 DAU 增長了 18% 至 9370 萬。

So compared to MAU, DAU is a better indicator of user engagement and commercialization potential. And our strategy will continue to focus more on DAU going forward. And will use this indicator to monitor our performance and drive our average user daily time spend and DAU/MAU ratio.

因此，與 MAU 相比，DAU 是用戶參與度和商業化潛力的更好指標。我們的戰略將繼續更多地關注未來的 DAU。並將使用此指標來監控我們的性能並推動我們的平均用戶每日時間花費和 DAU/MAU 比率。

Building on a stable MAU, we now want to further improve retention and engagement. In Q1, DAU to MAU ratio grew to 29.7% and average user daily time spent at 96 minutes. Going forward, we expect to see further increase in the DAU to MAU ratio.

在穩定的 MAU 的基礎上，我們現在希望進一步提高保留率和參與度。第一季度，DAU 與 MAU 的比率增長到 29.7%，用戶平均每天花費的時間為 96 分鐘。展望未來，我們預計 DAU 與 MAU 的比率將進一步增加。

Going forward, I think Bilibili's business model is one of a virtuous cycle because the content creators, the content supply and the quality of content here means that we're able to attract high-quality users. And the community here means that those users will stay and they will remain engaged and then that creates momentum to content creators to generate even better content. So this is a virtuous cycle. That's why looking at our user trend, I think we'll be able to continue to grow our DAU in the future.

展望未來，我認為嗶哩嗶哩的商業模式是一種良性循環，因為這裡的內容創作者、內容供應和內容質量意味著我們能夠吸引高質量的用戶。這裡的社區意味著這些用戶將留下來並且他們將繼續參與，然後為內容創建者創造動力以生成更好的內容。所以這是一個良性循環。這就是為什麼看看我們的用戶趨勢，我認為我們將來能夠繼續增加我們的 DAU。

And the next question comes from the line of Yiwen Zhang from China Renaissance.

下一個問題來自華興資本張一文的台詞。

(foreign language) My question is regarding advertisement. You delivered 22% Y-o-Y growth in ads revenue, which was faster than industry average. Can you share more color on how we improve our ads products and efficiency? And what is our view on 2023 as market. Consequently, what kind of strategy shall we adapt in this market?

（外語）我的問題是關於廣告的。您的廣告收入實現了 22% 的同比增長，高於行業平均水平。您能否就我們如何改進廣告產品和效率分享更多色彩？我們對 2023 年市場的看法是什麼？那麼，面對這個市場，我們應該採取什麼樣的策略呢？

And then lastly, recently, we observed many e-commerce exploration in either the video format or live streaming format. What is our progress there?

最後，最近，我們觀察到許多視頻格式或直播格式的電子商務探索。我們在那裡的進展如何？

[Interpreted] So in Q1, we saw that advertising, marketing trend has started to warm up and is expected to achieve double-digit growth. But at Bilibili, our growth in Q1 was 22%, which I believe is greater than the industry average. And of course, we managed to capture more share.

[解讀]所以在第一季度，我們看到廣告、營銷趨勢已經開始回暖，有望實現兩位數的增長。但在嗶哩嗶哩，我們第一季度的增長率是 22%，我認為這高於行業平均水平。當然，我們設法獲得了更多份額。

If you look at performance ads specifically, the year-on-year growth for us was higher than 50%, 5-0.

如果你具體看效果廣告，我們的同比增長高於 50%，5-0。

So just like Mr. Chen mentioned, in the context of healthy DAU growth, we're very confident that this will feed back into our advertising revenue growth. And specifically, I think our ad business is driven by both horizontal and vertical improvements as well as by new opportunities that come with vibrant transactions in our community.

所以就像陳先生提到的，在 DAU 健康增長的背景下，我們非常有信心這將反饋到我們的廣告收入增長中。具體來說，我認為我們的廣告業務是由橫向和縱向改進以及我們社區中充滿活力的交易帶來的新機會推動的。

By horizontal improvement, I'm referring to strengthening technical and data capabilities on the middle platform for greater ad efficiency. First, algorithm optimization can help increase the ratio of so-called deep conversion, which commands higher eCPM than shallow conversion. Take game industry, for example, the ratio has now increased to 35%.

橫向提升，我指的是加強中台的技術和數據能力，以提高廣告效率。首先，算法優化可以幫助提高所謂的深度轉化率，深度轉化比淺層轉化要求更高的eCPM。以遊戲行業為例，目前這一比例已經上升到35%。

Second, we want to increase the supply of commercial traffic. Users commercial behavior is now one of the indicators we monitor for traffic management. We want to ensure that sound user experience while leveraging the user LTV model to make dynamic adjustments in the ad load.

二是增加商業流量供給。用戶的商業行為現在是我們流量管理的監控指標之一。我們希望確保良好的用戶體驗，同時利用用戶 LTV 模型對廣告負載進行動態調整。

Saving structure is also essential. We've established a science-backed marketing methodology. In 2022, we put forward the [Mates] model, which helps clients refine their advertising plans prior to ad purchase and then help them measure the outcome afterwards. But this model was further validated in the auto and FMCG sector in Q1. And lastly, AI will also contribute to ad operation and conversion efficiency. So that's what I'm talking about when I said horizontal improvement to -- by the middle platform.

保存結構也是必不可少的。我們建立了以科學為後盾的營銷方法。 2022年，我們提出了【Mates】模型，幫助客戶在廣告購買前完善廣告計劃，然後幫助客戶衡量結果。但這一模式在一季度在汽車和快消行業得到了進一步驗證。最後，人工智能還將有助於廣告運營和轉化效率。這就是我所說的水平改進——通過中間平台。

As for vertical improvements, starting last year, we've been building and creating tailored models for six key industries so that their ads can target the right users at Bilibili. Here are some -- here are two examples.

至於垂直改進，從去年開始，我們一直在為六個關鍵行業構建和創建量身定制的模型，以便他們的廣告可以針對 Bilibili 上的正確用戶。這裡有一些——這裡有兩個例子。

For instance, gaming. Bilibili is known for our concentration of highly active high-value gamers. In Q1, more than 40% of our mobile users watched game videos or live broadcasting on a daily basis. And our team is responsible for game content, game distribution and game advertising, now work closely together towards shared goals, which paves the way for better-than-expected in-depth user conversion and branding outcomes.

例如，遊戲。嗶哩嗶哩以高度活躍的高價值遊戲玩家集中而著稱。第一季度，超過 40% 的移動用戶每天都會觀看遊戲視頻或直播。我們的團隊負責遊戲內容、遊戲發行和遊戲廣告，現在緊密合作以實現共同目標，這為好於預期的深度用戶轉化和品牌推廣成果鋪平了道路。

The video views for our latest game, HonKai Star Rail in the initial 2 weeks is 3.7x that of Genshin Impact for the same time frame. And as a result, the game distribution and ad revenue are also higher than Genshin Impact over that same time frame in the first week.

我們最新遊戲《崩壞星軌》前兩週的視頻觀看量是《原神》同期的 3.7 倍。因此，在第一周的同一時間段內，遊戲發行和廣告收入也高於 Genshin Impact。

As for e-commerce, thanks to our data partnerships with Alibaba, PDD and JD, ad efficiency has improved meaningfully with Q1 revenue growing by more than 110% year-on-year. During the June 18th shopping festival with a well-rounded marketing metrics, including Sparkle, branding ads, e-commerce and performance ads, we project that our revenue could potentially triple or even quadruple.

電商方面，得益於我們與阿里巴巴、拼多多、京東的數據合作，廣告效率顯著提升，Q1收入同比增長超過110%。在 6 月 18 日的購物節期間，通過全面的營銷指標，包括 Sparkle、品牌廣告、電子商務和效果廣告，我們預計我們的收入可能會翻三倍甚至四倍。

And for our verticals, electronics, FMCG and auto sector, we're confident that we'll be able to continue with the trend of healthy growth going forward.

對於我們的垂直行業、電子產品、快速消費品和汽車行業，我們有信心能夠繼續保持健康增長的趨勢。

With regard to video and live broadcasting e-commerce, I think of it as incremental growth opportunities for both ad revenue and content creators income. This is the result of vibrant transactions in our community.

關於視頻和直播電子商務，我認為它是廣告收入和內容創作者收入的增量增長機會。這是我們社區活躍交易的結果。

Since last year, as all the other content platforms were building closed-loop e-commerce systems, we have remained committed to building an open ecosystem that is connected with all the other e-commerce sites out there. It is about shaping the user's mindset to view Bilibili as a place for shopping and to foster their capacity for transaction peer.

從去年開始，隨著其他內容平台都在構建閉環電商系統，我們一直致力於構建一個與所有其他電商網站連接的開放生態系統。它是關於塑造用戶的心態，將Bilibili視為購物場所，並培養他們的交易能力。

The performance in Q1 exceeded our expectations. In Q1, there were over 10 million users placing e-commerce orders on Bilibili every day. And we also launched a dual performance product that facilitates both wish lifting and transactions, which accounted for about 30% of our performance ads in Q1.

第一季度的表現超出了我們的預期。第一季度，每天有超過1000萬用戶在嗶哩嗶哩下單。並且我們還推出了一款既能提升願望又能促進交易的雙效產品，占我們Q1效果廣告的30%左右。

E-commerce is also a new income stream for content creators. About 50,000 content creators engaged in e-commerce sales on a monthly basis in Q1, and there is now a smooth e-commerce workflow for categories such as cosmetics, food and electronics.

電子商務也是內容創作者的新收入來源。第一季度每月約有50,000名內容創作者從事電子商務銷售，目前化妝品，食品和電子產品等類別的電子商務工作流程已經很流暢。

Going forward, the momentum for consumption and transactions will get even stronger at Bilibili. So that's my take on how video and live broadcasting e-commerce will evolve on the platform.

未來，嗶哩嗶哩的消費和交易勢頭將更加強勁。所以這就是我對視頻和直播電子商務將如何在平台上發展的看法。

And the next question comes from the line of Lincoln Kong Goldman Sachs.

下一個問題來自 Lincoln Kong Goldman Sachs。

(foreign language) So the question is about the live streaming business. We've been seeing a relatively quickly growing business for live streaming. How should we think about the future strategy and outlook, especially in terms of the integration of live streaming and on-demand as well as the overall gross margin trend for the live streaming business?

（外語）所以問題是關於直播業務。我們一直看到直播業務增長相對較快。我們應該如何思考未來的戰略和前景，尤其是直播與點播的融合以及直播業務的整體毛利率趨勢？

[Interpreted] We've always said that live streaming is a natural extension of our video ecosystem. So operationally, we have always considered live broadcasting as the integral whole of our total operation.

【解讀】我們一直說直播是我們視頻生態的自然延伸。所以在運營上，我們一直把直播作為我們整體運營的一個整體。

So live broadcasting and videos on Bilibili sometimes -- often target the same demographics and there is a lot of overlap in category as well. And a lot of times, the live broadcasters are video creators. And last year -- since last year, we have been focusing on the fusion and integration between live broadcasting and the videos, so as to empower the live broadcasting business with momentum from the video ecosystem.

所以 Bilibili 上的直播和視頻有時 - 通常針對相同的人口統計數據，並且在類別上也有很多重疊。而很多時候，直播主就是視頻創作者。而去年——從去年開始，我們就專注於直播與視頻的融合與融合，以視頻生態為動力賦能直播業務。

I think the success we have been able to achieve with live broadcasting is precisely due to the efforts we have put in to integrate video and live streaming ecosystems. In Q1, the number of video creators who also do live streams increased by 38%, and 90% of new live streamers were either average users or video creators.

我覺得我們直播之所以能夠取得成功，正是因為我們在整合視頻和直播生態方面的努力。在第一季度，同時進行直播的視頻創作者數量增長了 38%，90% 的新直播主是普通用戶或視頻創作者。

The video ecosystem is a source of vitality and content for our live streaming business. And in Q1, the number of active live streamers increased by 34% and the number of MPUs grew by 15%. That's how we are empowering live streamings through our video ecosystem.

視頻生態是我們直播業務的活力源泉和內容源泉。而在第一季度，活躍主播數量增長了 34%，MPU 數量增長了 15%。這就是我們通過我們的視頻生態系統增強直播能力的方式。

So Bilibili, both very diversified categories of video content, and this has also contributed to the diversity of our live streaming content. One hallmark of that is our VTuber, which is Bilibili is now home to the largest group of Vtubers in China, and this is a natural extension of our ACG content from the video side. And today, VTubers are important source of income for live streaming.

所以嗶哩嗶哩，都是非常多元化的視頻內容品類，這也促成了我們直播內容的多元化。其中一個標誌就是我們的VTuber，嗶哩嗶哩現在是中國最大的Vtuber群體，這是我們二次元內容從視頻端自然延伸出來的。如今，VTubers 是直播的重要收入來源。

The VTubers are very active group of live streamers on Bilibili. And with the help AIGC, I think they will be able to generate even more visit and likely images and content for the users. And the whole experience can be more interactive for the users as well. So I'm personally very optimistic about prospects.

VTubers 是 Bilibili 上非常活躍的直播群體。在 AIGC 的幫助下，我認為他們將能夠為用戶帶來更多的訪問和可能的圖像和內容。整個體驗對於用戶來說也可以更具交互性。所以我個人對前景非常樂觀。

And Bilibili also aims to be diversified and cover as many verticals as possible. And you wouldn't believe that but lawyers and legal matters is a very popular category on Bilibili. Some lawyers, they also double as live streamers, our platform, answering legal questions to the viewers. Sometimes they have to answer very insignificant, inconsequential tiny questions, whatever the viewers want to ask them, and it's also something that Bilibili offers.

而嗶哩嗶哩也力求多元化，覆蓋盡可能多的垂直領域。你不會相信，但律師和法律事務是 Bilibili 上非常受歡迎的類別。一些律師，他們還兼任直播帶頭人，我們的平台，向觀眾回答法律問題。有時他們必須回答非常微不足道、無關緊要的小問題，觀眾想問什麼就問什麼，這也是嗶哩嗶哩提供的。

Another example would be gold. We have roughly thousands of gold players in China. And the vast majority of whom have already joined the Bilibili community as live streamers. And even though it's a very niche hobby, they somehow ended up together on our platform. We even have a lot of gold players from the province of Taiwan interacting with our users on the platform.

另一個例子是黃金。我們在中國大約有幾千名金牌玩家。其中絕大多數已經加入嗶哩嗶哩社區成為主播。儘管這是一個非常小眾的愛好，但他們最終還是在我們的平台上走到了一起。我們甚至有很多來自台灣省的黃金玩家在平台上與我們的用戶互動。

These examples goes to show that live streaming itself is very dynamic and diversified on Bilibili. It's not just another revenue stream for us. It actually has a lot of content to offer and holds tremendous potential. And as our video business grows stronger and bigger, I believe our live streaming, live broadcasting business will also be able to expand and improve.

這些例子表明直播本身在嗶哩嗶哩上是非常動態和多樣化的。這不僅僅是我們的另一個收入來源。它實際上有很多內容可以提供並且擁有巨大的潛力。隨著我們的視頻業務做強做大，我相信我們的直播、直播業務也能做大做強。

During previous earnings calls, I've said that live streaming business could potentially, at least double and I could say that again, at this call, I believe live streaming has, at least the potential to double at Bilibili. And the fusion between video and live streaming will continue to enhance.

在之前的財報電話會議上，我曾說過直播業務可能至少翻一番，我可以再說一遍，在這次電話會議上，我相信直播業務至少有可能翻一番。視頻與直播的融合將不斷增強。

Theoretically, every user can be a video viewer as well as a live stream viewer, and every broadcaster can generate video content as well as live streaming content. And this is now also an important income stream for creators. In Q1, 700,000 creators were able to make the income from live streaming.

理論上，每個用戶都可以是視頻觀看者和直播觀看者，每個主播都可以製作視頻內容和直播內容。而這現在也是創作者重要的收入來源。第一季度，70萬主播通過直播獲得收入。

And fusion between videos and live streaming could also drive out our gross margin and reduce cost as more ordinary users are doing live streams on their own and the cost of bandwidth being spread out even further, we believe the gross margin for live streaming business will continue to improve.

視頻和直播的融合也可能會拉低我們的毛利率並降低成本，因為更多的普通用戶自己做直播，帶寬成本進一步分散，我們相信直播業務的毛利率將持續改善。

And the next question comes from the line of Lei Zhang from Bank of America Securities.

下一個問題來自美國銀行證券的Lei Zhang。

(foreign language) I want to ask mainly about the monetization of the content creator, which we noticed that previously have some wider discussion on the Internet. So can you share us more color on how we can improve either the total income or the commercial value for the content creators on Bilibili?

（外語）我想問的主要是關於內容創作者的貨幣化，我們注意到之前在互聯網上有一些更廣泛的討論。那麼您能否分享更多關於我們如何提高嗶哩嗶哩內容創作者的總收入或商業價值的顏色？

[Interpreted] So I think you're referring to an article released in April about many (inaudible). The article claims that many creators on Bilibili stopped uploading new content to the platform. I read it myself, and I think this article is nothing but misleading. And he -- this article mentioned three content creators who paused their update -- paused their video content updates. Out of millions of content creators we have on Bilibili, the article mentioned only 3, and 2 of those 3, you actually have released new content since then. And so I think even though the article has a quite clickbait title, the content and the reasoning in this article was misleading.

[解釋] 所以我認為你指的是 4 月份發布的一篇關於許多（聽不清）的文章。文章稱，嗶哩嗶哩上的許多創作者已停止向該平台上傳新內容。我自己看了，我認為這篇文章只是誤導。他——這篇文章提到了三位暫停更新的內容創作者——暫停了他們的視頻內容更新。在 Bilibili 上的數百萬內容創作者中，這篇文章只提到了 3 個，而這 3 個中有 2 個實際上是從那時起發布了新內容。因此，我認為即使這篇文章的標題非常誘人，但本文的內容和推理具有誤導性。

I think this article was able to start a heated debate as proof that people are paying happy -- pay attention to Bilibili very closely and some media even went down to write derivative reports on this article. And that's why we -- and that discussion ended up on the hot topic list of Weibo. And internally, we have been making a lot of efforts to improve commercialization for content creators at Bilibili, and we have numbers to back that up.

我覺得這篇文章能夠掀起熱議，證明人們付出的是快樂的——請密切關注嗶哩嗶哩，甚至有媒體針對這篇文章去寫衍生報導。這就是為什麼我們——那次討論最終登上了微博的熱門話題列表。在內部，我們一直在努力改善 Bilibili 內容創作者的商業化，我們有數據支持這一點。

We have done a lot of work to help our content creators monetize. In Q1 alone, 1.5 million content creators earned net income on Bilibili up by 50% year-on-year. And the amount they are making from advertising, live streaming and also user payment has also increased meaningfully.

我們做了很多工作來幫助我們的內容創作者獲利。僅一季度，嗶哩嗶哩就有 150 萬內容創作者淨收入同比增長 50%。他們從廣告、直播和用戶支付中獲得的收入也有了顯著增長。

And in this article, it has also said that Bilibili is cutting incentives for content creation, which could have some ramifications. This is, again, very misleading because the incentive programs we have is only for content creators with fewer than 10,000 followers. Basically, we provide them the subsidy to help them tide over the initial period of content creation when they did not have the ability to generate the income for themselves. And for the content creators that have more than 10,000 followers, we help them find the tools to make money on their own. So this incentive program doesn't really matter for the vast majority of the creators on our platform.

在這篇文章中，它還表示嗶哩嗶哩正在削減對內容創作的激勵，這可能會產生一些影響。這又一次非常具有誤導性，因為我們的激勵計劃僅適用於擁有少於 10,000 名粉絲的內容創作者。基本上，我們為他們提供補貼，幫助他們度過內容創作初期，因為他們沒有能力為自己創造收入。對於擁有超過 10,000 名粉絲的內容創作者，我們幫助他們找到自己賺錢的工具。所以這個激勵計劃對我們平台上的絕大多數創作者來說並不重要。

Helping our creators monetize has always been a priority in our work. And we have established the Sparkle system to help content creators get commercial deals. We have also been empowering video creators to switch to live stream so that they can make the income there. So this effort will never stop. We'll step up our efforts to help them make the income. That's why -- that's because we believe only when those content creators don't have to worry about money, they will be able to invest more energy into generating high-quality content.

幫助我們的創作者獲利一直是我們工作的重中之重。並且我們建立了Sparkle系統來幫助內容創作者獲得商業交易。我們還一直在授權視頻創作者轉向直播，以便他們可以在那裡賺取收入。所以這種努力永遠不會停止。我們將加緊努力幫助他們賺取收入。這就是為什麼 - 那是因為我們相信只有當這些內容創作者不必擔心錢時，他們才能投入更多精力來生成高質量的內容。

So this article is able to trigger such a discussion and it shows that users actually care a lot about the creators and the Bilibili platform. And the reason why we're able to have such a high concentration of high-caliber creator is because we believe in the value of high-quality content and the power of creators. This has always been and will always be a guiding principle in our operation.

所以這篇文章能夠引發這樣的討論，說明用戶其實是很關心創作者和嗶哩嗶哩平台的。而我們之所以能夠擁有如此高度集中的高素質創作者，是因為我們相信優質內容的價值和創作者的力量。這一直是並將永遠是我們運營的指導原則。

We have always treated creators nicely because we understand their needs, and we are going to spare no effort in supporting those creators and helping them to earn an income that they deserve. This is a work will carry out continuously.

我們一直對創作者很好，因為我們了解他們的需求，我們將不遺餘力地支持這些創作者，幫助他們獲得應有的收入。這是一項將持續開展的工作。

And the next question comes from the line of Xueqing Zhang from CICC.

下一個問題來自中金公司的張學慶。

(foreign language) And my question is mainly about the Bilibili. You mentioned in your prepared remarks that Bili has some newly approved games. So can management share with us the game pipeline and with (inaudible) being stretched and outlook?

（外語） 而我的問題主要是關於嗶哩嗶哩的。你在準備好的評論中提到，嗶哩嗶哩有一些新批准的遊戲。那麼管理層能否與我們分享遊戲管道以及（聽不清）被拉伸和展望？

[Interpreted] This year is going to be a big year for the gaming industry. Licenses for domestic games are now issued regularly every month. For import games, two batches of licenses have been handed out since last year, which is great not just for our game distribution business, but also for advertising and live broadcasting as well.

[解讀]今年將是遊戲行業的大年。國產遊戲牌照現在每月定期發放。進口遊戲方面，從去年開始，已經發放了兩批牌照，這不僅對我們的遊戲發行業務，對廣告和直播業務也有好處。

In the next several quarters, we have 13 games to be launched at home and abroad, 8 of which have acquired domestic game licenses and will be published in China. Five of them will be published overseas.

未來幾個季度，我們將在國內外推出13款遊戲，其中8款已獲得國內游戲授權，將在中國發行。其中五部將在海外出版。

We are now preparing for the launch of the high-profile game we distribute called, Pretty Derby and we are now working around the clock to finish the last bits of localization work for this game before launch. And we also have two self-developed titles, Alkaidland Records, which is a female romance game and also Eruthyll, an ACG game, which will be published later this summer.

我們現在正準備發布我們發行的名為 Pretty Derby 的備受矚目的遊戲，我們正在夜以繼日地工作以在發布前完成該遊戲的最後一點本地化工作。我們還有兩款自研遊戲，女性愛情遊戲Alkaidland Records和今年夏天晚些時候發布的二次元遊戲Eruthyll。

Bilibili is home to the largest group of ACG gamers and fans and also both a very young user base, which makes us the core channel for distributing ACG games. Since the beginning of the year, we've successfully distributed many ACG titles, proving our worth once again. HonKai Star Rail by miHoYo is a great example of that, which achieved a whopping 2.8 million first day download on Bilibili, setting a new record for our game distribution business. And just yesterday, our distribution game, Reverse 1999, was published with great initial feedback.

bilibili 擁有最大的二次元遊戲玩家和粉絲群體，同時也是非常年輕的用戶群，這使我們成為二次元遊戲分發的核心渠道。今年以來，我們已經成功發行了多款二次元遊戲，再次證明了我們的價值。米哈遊的崩壞星軌就是一個很好的例子，它在嗶哩嗶哩的首日下載量高達 280 萬，創下了我們遊戲發行業務的新紀錄。就在昨天，我們的發行遊戲 Reverse 1999 發布並獲得了很好的初步反饋。

Many people are interested in our self-developed games. Two examples I mentioned just now are Alkaidland Records and Eruthyll. And we have more pipeline games under development. But since self-developed games, we only want to be delivering high-quality games. So the cycle will be relatively long and each game will take 3 years for development. And the next self-developed game will probably be published around the year after next. We will stick to the strategy of self-developed quality games and global distribution.

許多人對我們自主開發的遊戲感興趣。我剛才提到的兩個例子是Alkaidland Records和Eruthyll。我們還有更多的管道遊戲正在開發中。但既然是自研遊戲，我們只想做高質量的遊戲。所以周期會比較長，每款遊戲都需要3年的時間來開發。而下一款自研遊戲大概會在後年左右發布。我們將堅持自主研發精品遊戲、全球發行的策略。

In terms of game genres, we will focus more on our forte such as ACG card games. Our goal is to develop top-ranking games in niche segments and manage them well over a long life cycle, and we're putting the hard effort needed to achieve that success on this front.

在遊戲類型上，我們會更專注於自己的強項，比如二次元卡牌遊戲。我們的目標是開發細分市場中的頂級遊戲，並在較長的生命週期內對它們進行良好管理，我們正在為此付出努力以取得成功。

Now we're going to take our last question. Please stand by. And the question comes from the line of Felix Liu from UBS.

現在我們要回答最後一個問題。請待命。問題來自瑞銀的 Felix Liu。

(foreign language) And congratulations on the notable improvement on GP margin and overall bottom line. Can management elaborate a little bit on measures you have taken and your drivers for future GP margin and loss-narrowing drivers?

（外語）並祝賀 GP 利潤率和整體底線的顯著改善。管理層能否詳細說明您已採取的措施以及您未來 GP 利潤率和虧損縮小驅動因素的驅動因素？

This is Sam. I will take your question. Our focus of this year is clear to improve the gross margin. In the same time, we will reduce our net loss. So in the first quarter, our gross profit year-over-year growth grew about 37% and net loss narrowed considerably about 72% year-on-year and 58% quarter-over-quarter.

這是山姆。我會回答你的問題。我們今年的重點很明確是提高毛利率。同時，我們將減少淨虧損。因此，在第一季度，我們的毛利同比增長約 37%，淨虧損同比大幅收窄約 72%，環比收窄 58%。

From the revenue side, we continue to improve the quality of the revenue. The advertising business, as we mentioned, grew by 22% year-over-year. So it's a high-margin business. And at the cost end, we still keep improve our operational efficiency and achieve a year-on-year decrease of 7% of total cost. And so that results, the GP increased by 37%, and the GP margin improved to 22% compared with 16% last year.

從收入方面，我們繼續提高收入質量。正如我們所提到的，廣告業務同比增長了 22%。所以這是一個高利潤的業務。而在成本端，我們依然不斷提昇運營效率，實現總成本同比下降7%。因此，GP 增長了 37%，而 GP 利潤率從去年的 16% 提高到 22%。

So use the technology upgrading and now to operation management. The bandwidth cost, for example, continue to decline, down about 16% year-on-year and 12% quarter-over-quarter. And other fixed costs, for example, label and other operational costs also for about 13% year-on-year and quarter-over-quarter.

所以利用技術升級，現在進行運營管理。例如，帶寬成本繼續下降，同比下降約 16%，環比下降 12%。而其他固定成本，例如標籤和其他運營成本也同比和環比增長約 13%。

So from the expense side, you already saw the overall operating expenses decreased significantly, about 11% year-over-year and DAUs increased by 18% year-on-year. So we will keep actively control our operating expenses, especially the marketing expenses, which are already down about 30% year-on-year in Q1. I think that will be -- that trend will continue in the following quarter.

所以從費用方面，你已經看到整體運營費用顯著下降，同比下降約 11%，DAU 同比增長 18%。所以我們會繼續積極控制運營費用，尤其是營銷費用，一季度已經同比下降了30%左右。我認為這將是 - 這種趨勢將在下一季度繼續。

So we are quite confident that we've controlled the cost and expenses. Our gross profit margin will improve quarter-over-quarter and of this year. And the operating basis will also show a meaningful year-on-year decline and to achieve a further narrowing of our net loss.

所以我們非常有信心我們已經控制了成本和費用。我們的毛利率將環比和今年有所改善。而經營基礎也將出現有意義的同比下降，實現我們淨虧損的進一步收窄。

Thank you. And that concludes the question-and-answer session. Thank you once again for joining Bilibili's First Quarter 2023 Financial Results and Business Update Conference Call today. If you have any further questions, please contact Juliet Yang, Bilibili's Executive IR Director or Piacente Financial Communications. Contact information for IR in both China and the U.S. can be found on today's press release. Have a great day.

謝謝。問答環節到此結束。再次感謝您今天參加嗶哩嗶哩 2023 年第一季度財務業績和業務更新電話會議。如有任何疑問，請聯繫 Bilibili 執行 IR 總監 Juliet Yang 或 Piacente Financial Communications。 IR 在中國和美國的聯繫信息可在今天的新聞稿中找到。祝你有美好的一天。

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

[此記錄中標記為 [已翻譯] 的部分由現場通話中的口譯員說出。]