Bilibili Inc (BILI) 2022 Q1 法說會逐字稿

Good day, and welcome to the Bilibili 2022 First Quarter 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。

At this time, I would like to turn the conference over to Juliet Yang, Executive Director of Investor Relations. 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。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 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到的有重大差異。

The non-GAAP financial measures we provide are for comparison purpose only. Definition of these measures and the reconciliation table are available in the news release we issue 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調節表。

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

提醒一下，本次會議正在錄製中。此外，Bilibili IR 網站 ir.bilibili.com 上將提供投資者介紹和本次電話會議的網絡重播。

Joining us today from Bilibili senior management are Mr. Rui Chen, Chairman of the Board and Chief Executive Officer; Ms. Carly Lee, Vice Chairwoman of the Board and Chief Operating Officer; 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；董事會副主席兼首席運營官Carly Lee女士；以及首席財務官 Sam Fan 先生。

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

我現在將電話轉給范先生，范先生將代表陳先生宣讀準備好的講話。

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

謝謝你，朱麗葉。感謝大家參加我們的 2022 年第一季度業績電話會議。我很高興代表陳先生髮表今天的開幕詞。

In the first quarter, the unexpected outbreak of COVID-19 struck China nationwide, impacting people's everyday lives. Shanghai, where our headquarters are based, were particularly impacted by the strict lockdowns.

第一季度，COVID-19 的意外爆發襲擊了中國全國，影響了人們的日常生活。我們總部所在的上海尤其受到嚴格封鎖的影響。

During this challenging time, our top priority is to the health and the safety of our employees. Over 8,000 of our staff members have been working from home since mid-March, and we arranged essentials to be delivered to our employees in Shanghai when it was the most difficult to get supplies. In addition, we opened our documentary library to the public free of charge during the May holidays and donated 2 million premium Bilibili memberships to Shanghai Citizens. We are glad to see that the lockdown just ended last week and hope everyone's life and our daily business can return to normal order soon.

在這個充滿挑戰的時期，我們的首要任務是確保員工的健康和安全。自 3 月中旬以來，我們 8,000 多名員工一直在家工作，我們在上海最困難的時候安排了必需品送到我們的員工手中。此外，我們在五一期間免費向公眾開放了我們的文獻庫，並向上海市民捐贈了200萬個B站高級會員。我們很高興看到上周剛剛結束的封鎖，希望每個人的生活和我們的日常業務都能盡快恢復正常。

Confronting the challenges, our business foundation remains strong and resilient. In the first quarter, our vibrant community continued to grow at a fast pace. Total MAUs grew by 31% year-over-year to 294 million, and the DAUs grew even faster at 32% year-over-year, reaching 79 million.

面對挑戰，我們的業務基礎仍然強大而富有彈性。第一季度，我們充滿活力的社區繼續快速增長。總月活躍用戶同比增長 31% 至 2.94 億，日活躍用戶增長更快，同比增長 32%，達到 7900 萬。

Total user traffic, which we calculate as DAUs multiplied by daily time spent per user, grew 52% year-over-year. During this period, each user spent an average of 95 minutes on Bilibili per day, the longest we have seen in our operating history. These strong user metrics represent our solid business fundamentals, and we are seeing the momentum continue as we move through the second quarter.

總用戶流量（我們計算為 DAU 乘以每位用戶每天花費的時間）同比增長 52%。在此期間，每位用戶平均每天在 Bilibili 上花費的時間為 95 分鐘，這是我們在運營歷史上看到的最長的時間。這些強大的用戶指標代表了我們堅實的業務基礎，隨著我們進入第二季度，我們看到這種勢頭仍在繼續。

Despite the short-term impact from the COVID lockdowns, our total net revenue for the first quarter came in at RMB 5.05 billion, up 30% year-over-year. In the first quarter, both our paying ratio and MPUs reached a record high of 9.3% and 27.2 million, respectively. Live broadcasting was a major driver during the period with paying user numbers growing 60% year-over-year.

儘管受到新冠疫情封鎖的短期影響，我們第一季度的總淨收入為 50.5 億元人民幣，同比增長 30%。第一季度，我們的支付率和 MPU 分別達到了 9.3% 和 2720 萬的歷史新高。直播是這一時期的主要推動力，付費用戶數量同比增長 60%。

Despite soft industry demands, we continue to gain market share in advertising and grew our ad revenue by 46% year-on-year in Q1. Improving our ads efficiency and exploring new products, such as ads in Story Mode, are a few of the initiatives we expect to leverage as we work our way through the challenging macro environment in the coming quarters.

儘管行業需求疲軟，但我們繼續獲得廣告市場份額，第一季度廣告收入同比增長 46%。提高我們的廣告效率和探索新產品，例如故事模式中的廣告，是我們在未來幾個季度應對充滿挑戰的宏觀環境時期望利用的一些舉措。

User growth, effective spending control and improving our operating efficiency are our top goals. We have made some progresses on each of these fronts in Q1. Sales and marketing expenses decreased by 29% quarter-over-quarter, accounting for 25% of total revenue, down from 31% in the previous quarter. Server and bandwidth costs decreased by 2% quarter-over-quarter, which was no small feat given our daily video views increased by 36% sequentially. We continued to invest in R&D in Q1, which we believe is essential for long-term and sustainable growth.

用戶增長、有效的支出控制和提高我們的運營效率是我們的首要目標。我們在第一季度在這些方面都取得了一些進展。銷售和營銷費用環比下降 29%，佔總收入的 25%，低於上一季度的 31%。服務器和帶寬成本環比下降了 2%，鑑於我們的每日視頻觀看量環比增長了 36%，這是一個不小的壯舉。我們在第一季度繼續投資於研發，我們認為這對於長期和可持續增長至關重要。

Regardless of the pandemic impacts to our short-term financial metrics, we remain committed to our mid- and long-term goal of narrowing our loss ratio and reaching breakeven. Moving forward, we will further strengthen our commercialization capabilities, control costs and improve human capital efficiency.

無論大流行對我們的短期財務指標有何影響，我們仍致力於實現縮小損失率並達到盈虧平衡的中長期目標。展望未來，我們將進一步加強商業化能力，控製成本，提高人力資本效率。

With that overview, I'd like to go through some details of our first quarter operations across our content, community and commercialization. Bilibili's unique content and community offerings provide our users an irreplaceable experience in the online video space. Since 2021, we have successfully expanded to a multiterminal video community by launching our Story Mode and the Smart TV app. These have effectively brought our rich content to users in more formats that resonate with them across different viewing preferences.

有了這個概述，我想詳細介紹我們第一季度在內容、社區和商業化方面的運營。 Bilibili 獨特的內容和社區產品為我們的用戶提供了在線視頻領域不可替代的體驗。自 2021 年以來，我們通過推出故事模式和智能電視應用程序，成功擴展到多終端視頻社區。這些以更多格式有效地為用戶帶來了我們豐富的內容，從而在不同的觀看偏好中與他們產生共鳴。

User response to our short-form video Story Mode has been very inspiring. This short form video with Bilibili features provides a unique watching experience to satisfy users' on-the-go entertainment needs. Story Mode brought an incremental increase in total video consumption, contributing more than 20% of our total video views in the first quarter. And these numbers have continued to grow in Q2. In addition to more views and creating deeper community bonds, Story Mode has also opened up a new avenue for commercialization opportunities with advertisers as well as our live broadcasting services.

用戶對我們的短視頻故事模式的反應非常鼓舞人心。這款具有 Bilibili 功能的短視頻提供了獨特的觀看體驗，以滿足用戶在旅途中的娛樂需求。故事模式帶來了視頻總消費量的增量增長，在第一季度貢獻了我們總視頻瀏覽量的 20% 以上。這些數字在第二季度繼續增長。除了更多的瀏覽量和更深的社區紐帶，故事模式還為廣告商以及我們的直播服務開闢了商業化機會的新途徑。

During the period, users primarily engaged with content in the lifestyle, games, entertainment, ACG and knowledge categories. Across these top verticals and others, content creation remained robust. Monthly average content submissions were 12.6 million, increasing by 63% compared with the same period last year. Monthly active creators during the quarter were 3.8 million, up 75% year-over-year.

期內，用戶主要參與生活類、遊戲類、娛樂類、ACG類和知識類的內容。在這些頂級垂直行業和其他垂直行業中，內容創作依然強勁。月均內容提交量為1260萬篇，同比增長63%。本季度每月活躍的創作者為 380 萬，同比增長 75%。

The deep value we place on our creators is one of the reasons we are able to maintain our robust content and healthy community. The key to motivate their continuous creation to help them gain recognition and provide monetary rewards. We are providing them with both. Content creators with more than 10,000 followers increased by 44% in the first quarter. Beyond our cash incentive program, content creators are encouraged to realize their commercial value more fully through multiple avenues, including live broadcasting, our Sparkle ad platform, creator-recommended ads and direct tips from users. In the first quarter, a total of 1.1 million content creators had received monetary compensation for their work, up 90% year-over-year.

我們對創作者的高度重視是我們能夠維持我們強大的內容和健康的社區的原因之一。激勵他們不斷創造的關鍵是幫助他們獲得認可並提供金錢獎勵。我們為他們提供了兩者。第一季度，擁有超過 10,000 名粉絲的內容創作者增長了 44%。除了我們的現金獎勵計劃外，我們還鼓勵內容創作者通過多種途徑更充分地實現其商業價值，包括直播、我們的 Sparkle 廣告平台、創作者推薦的廣告和來自用戶的直接提示。第一季度，共有 110 萬內容創作者因作品獲得了貨幣補償，同比增長 90%。

As for our community, we continue to foster an active environment for our users to get closer to the content and interact with creators and each other. We can see this not only with the record average daily time spent on our platform of 95 minutes in the first quarter, but also in the increased average daily video views, which grew by impressive 84% year-over-year to nearly 3 billion.

至於我們的社區，我們將繼續為我們的用戶營造一個積極的環境，讓他們更接近內容並與創作者和彼此互動。我們不僅可以從第一季度在我們平台上的 95 分鐘平均每天花費的時間上看到這一點，而且還可以從平均每日視頻瀏覽量的增加中看到這一點，同比增長 84%，達到近 30 億次。

The number of interactions in Q1 reached 12.3 billion, up an impressive 87% year-over-year. The bond between our users and community have continued to grow. By the end of March, we had 158 million official members, up 41% with a stable 12-month retention rate of 83%. Both our Story Mode and the Smart TV have played a positive roles in driving engagement levels.

第一季度互動次數達到 123 億次，同比增長 87%，令人印象深刻。我們的用戶和社區之間的紐帶不斷加強。截至 3 月底，我們擁有 1.58 億正式會員，增長 41%，穩定的 12 個月保留率為 83%。我們的故事模式和智能電視都在提高參與度方面發揮了積極作用。

Now let's take a look at our commercialization efforts. Accelerating our commercialization efforts is our most important target this year. Despite the macro headwinds, our business is resilient. While advertising and e-commerce businesses have and will be particularly impacted in the near term, we are paying more attention to the quality of our revenue growth, particularly the margin contribution of each business segment.

現在讓我們來看看我們的商業化努力。加快我們的商業化努力是我們今年最重要的目標。儘管存在宏觀逆風，但我們的業務具有彈性。雖然廣告和電子商務業務在短期內已經並將受到特別影響，但我們更加關注收入增長的質量，特別是每個業務部門的利潤率貢獻。

For our game business. In the first quarter, net revenues from our game business increased 16% year-over-year to RMB 1.36 billion. We continued to invest in in-house game development by acquiring a new studio in the first quarter. At the same time, we're closely monitoring our existing projects and conducting agile testing to keep our pipeline ahead of the fast-evolving industry. We're also working to improve our industrialized development capabilities, which is equally important in landing an idea that works.

對於我們的遊戲業務。一季度，我們遊戲業務的淨收入同比增長16%至人民幣13.6億元。我們在第一季度收購了一家新工作室，繼續投資於內部遊戲開發。與此同時，我們正在密切監控我們現有的項目並進行敏捷測試，以使我們的管道在快速發展的行業中保持領先。我們也在努力提高我們的工業化開發能力，這對於落地一個可行的想法同樣重要。

Turning to our pipeline. Three games have already been approved and some others are in the late approval stage. As for our game operation in the overseas market, we have 3 titles slated for launch in the second quarter, more for the second half of this year.

轉向我們的管道。三款遊戲已經獲批，還有一些處於後期審批階段。至於我們在海外市場的遊戲運營，我們計劃在第二季度推出 3 款遊戲，今年下半年還會推出更多遊戲。

Turning to our VAS business. Net revenues for VAS were RMB 2.05 billion, an increase of 37% year-over-year, beyond the pandemic, we see a lot of monetization opportunity in this segment, particularly in live broadcasting and other innovative community-related value-added services.

轉向我們的增值服務業務。增值服務的淨收入為人民幣 20.5 億元，同比增長 37%，在大流行之後，我們看到該領域有很多貨幣化機會，特別是在直播和其他創新的社區相關增值服務方面。

Our powerful PUGV video library and the pool of talented creators give us a unique advantage to leverage and reinforce our live broadcasting business. In the first quarter, the number of active live broadcasters on Bilibili increased by 88% year-over-year.

我們強大的 PUGV 視頻庫和才華橫溢的創作者庫為我們提供了獨特的優勢來利用和加強我們的直播業務。一季度，B站活躍直播主數量同比增長88%。

We continue to roll out more tools and functions to let creators showcase their talent, and introduce new forms of interactive virtual gifting programs. Meanwhile, the popularity of Story Mode opened a new gateway for users to discover interesting live broadcasting content. With these initiatives, a seamless and natural conversion to a paid user arises. In the first quarter, NPUs in live broadcasting increased by 60% year-over-year.

我們繼續推出更多工具和功能，讓創作者展示他們的才華，並推出新形式的互動虛擬禮物計劃。同時，故事模式的流行為用戶發現有趣的直播內容打開了新的大門。通過這些舉措，可以無縫自然地轉換為付費用戶。一季度，直播NPU同比增長60%。

As for our premium membership. By the end of the first quarter, we had 20.1 million premium members, a 25% increase year-over-year. Nearly 80% of these were annual or auto-renew packages subscribers, representing their strong trust in us. In 2022, we will continue to add exciting content to attract members, including series of Bilibili-produced Chinese anime, variety shows and documentaries.

至於我們的高級會員。截至第一季度末，我們擁有 2010 萬高級會員，同比增長 25%。其中近 80% 是年度或自動續訂套餐訂閱者，代表了他們對我們的強烈信任。 2022年，我們將繼續增加精彩內容來吸引會員，包括B站出品的系列中國動漫、綜藝節目和紀錄片。

Looking at our advertising services. Revenue from this segment were RMB 1.0 billion, an increase of 46% year-over-year. In the first quarter, our top 5 advertising industry verticals were games, skincare and cosmetics, 3C products, automobiles and food and beverage. In March, the unexpected COVID lockdown caused travel restrictions and logistics difficulties in major cities in China. Some advertising dollars were delayed or placed on hold. Confronting the headwinds, we are pressing forward to expand our advertising scenarios with more innovative ad products and increase our ad efficiency with a better conversion toolkit.

查看我們的廣告服務。該板塊收入為人民幣10億元，同比增長46%。一季度，我們的前5大廣告垂直行業分別是遊戲、護膚美妝、3C產品、汽車和食品飲料。 3 月，意外的 COVID 封鎖導致中國主要城市的旅行限制和物流困難。一些廣告費用被延遲或擱置。面對逆風，我們正在努力通過更多創新的廣告產品來擴展我們的廣告場景，並通過更好的轉換工具包來提高我們的廣告效率。

We launched our Story Mode ads in April, and the initial feedback is encouraging. Compared with text or picture-based ads, ads in the Story Mode has higher ROI to ad customers and bring an incremental increase to our ad inventory as well as our eCPM. We plan to allocate more resources to improve its performance, including algorithms and product abilities.

我們在 4 月推出了故事模式廣告，最初的反饋令人鼓舞。與基於文字或圖片的廣告相比，故事模式的廣告對廣告客戶的投資回報率更高，並為我們的廣告庫存和 eCPM 帶來了增量。我們計劃分配更多資源來提高其性能，包括算法和產品能力。

E-commerce is another area deeply impacted by the logistic disruption caused by the pandemic. As we believe our customer trust is our most valuable asset, we offered our customers our free delivery delay services and [automatic] (corrected by company after the call) refund option. As recovery begins, our May GMV sales were again on the rise. Going forward, we will continue to explore new innovative models to maximize our IP value and achieve synergy with our leading content verticals.

電子商務是另一個深受疫情造成的物流中斷影響的領域。由於我們相信客戶的信任是我們最寶貴的資產，因此我們為客戶提供免費的送貨延遲服務和[自動]（由公司在致電後更正）退款選項。隨著復甦的開始，我們 5 月份的 GMV 銷售額再次上升。展望未來，我們將繼續探索新的創新模式，以最大限度地提高我們的 IP 價值，並與我們領先的內容垂直領域實現協同效應。

Confronting the macro challenges, our action plan is clear for the rest of the year. First, we aim to take all necessary steps to resume normal business operations. Second, we will be focusing on the quality of our users and our revenue growth, particularly DAU metrics and our business segments' margins. Lastly, we will take essential action to further control our cost and expenses.

面對宏觀挑戰，我們今年剩餘時間的行動計劃很明確。首先，我們的目標是採取一切必要措施恢復正常的業務運營。其次，我們將關注用戶質量和收入增長，特別是 DAU 指標和我們業務部門的利潤率。最後，我們將採取必要的行動來進一步控制我們的成本和開支。

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

陳先生的發言到此結束。我現在將簡要概述我們 2022 年第一季度的財務業績和 2022 年第二季度的展望。

Total net revenue for the first quarter was RMB 5.05 billion, up 30% from the same period of 2021. Cost of revenues increased by 43% year-over-year to RMB 4.2 billion. Server and bandwidth cost as part of the relative fix cost component decreased 2% quarter-over-quarter. Server and bandwidth cost per video views decreased 27% quarter-over-quarter, showing our ongoing efforts and progress in cost saving.

一季度總淨收入為人民幣50.5億元，較2021年同期增長30%。收入成本為人民幣42億元，同比增長43%。作為相對固定成本組成部分的服務器和帶寬成本環比下降 2%。每個視頻觀看的服務器和帶寬成本環比下降 27%，顯示了我們在節約成本方面的持續努力和進展。

Our gross profit in the first quarter was RMB 807.2 million and gross margin was 16%. Total operating expenses was RMB 2.8 billion, up 42% from the same period in 2021, which represents a 9% quarter-over-quarter decrease from Q4 2021.

一季度毛利潤為人民幣8.072億元，毛利率為16%。總營業費用為人民幣 28 億元，較 2021 年同期增長 42%，較 2021 年第四季度環比下降 9%。

Sales and marketing expenses were RMB 1.3 billion, representing a 25% increase year-over-year and RMB 507.7 million decrease quarter-over-quarter. Selling and marketing expenses as a percentage of total revenue was 25%, down from 30% in previous quarter. G&A expenses were RMB 535.3 million, representing a 38% increase year-over-year and keep flattish quarter-over-quarter. R&D expenses was RMB 1.0 billion, representing a 74% increase year-over-year. The increase was primarily due to increased headcount in research and development and share-based compensation expenses. We will closely monitor the progress and ROIs of our investments and make ongoing adjustment when necessary.

銷售及營銷費用為人民幣13億元，同比增長25%，環比減少5.077億元。銷售和營銷費用佔總收入的比例為 25%，低於上一季度的 30%。 G&A 費用為人民幣 5.353 億元，同比增長 38%，環比持平。研發費用10億元，同比增長74%。增加的主要原因是研發人員增加和股權激勵費用。我們將密切關注我們投資的進展和投資回報率，並在必要時進行持續調整。

Net loss was RMB 2.3 billion for the first quarter of 2022 compared with a net loss of RMB 904.9 million in the same period of 2021. Adjusted net loss, which is a non-GAAP measure, was RMB 1.65 billion compared with RMB 891.0 million in the same period of 2021. Basic and diluted net loss per share for the first quarter was RMB 5.80 compared with RMB 2.54 in the same period of 2021. Adjusted basic diluted net loss per share was RMB 4.20 compared with RMB 2.50 in Q1 2021.

2022 年第一季度淨虧損為人民幣 23 億元，而 2021 年同期淨虧損為人民幣 9.049 億元。按非公認會計原則衡量的調整後淨虧損為人民幣 16.5 億元，而 2021 年同期為人民幣 8.91 億元。 2021 年同期。第一季度基本和攤薄每股淨虧損為人民幣 5.80 元，而 2021 年同期為人民幣 2.54 元。調整後的基本每股攤薄淨虧損為人民幣 4.20 元，而 2021 年第一季度為人民幣 2.50 元。

Turning to our capital allocation and the liability management. We announced our USD 500 million share repurchase program in early March. As of March 31, 2022, approximately 1.4 million ADSs have been purchased under this program for a total cost of USD 30 million. We are also optimizing our liability level. In Q1, the Company repurchased and cancelled an aggregate principal amount of USD 204 million of convertible senior notes with a total cash consideration of USD 147.9 million and recorded cash saving of RMB 338.8 million.

轉向我們的資本分配和負債管理。我們在 3 月初宣布了 5 億美元的股票回購計劃。截至 2022 年 3 月 31 日，已根據該計劃購買了約 140 萬個 ADS，總成本為 3000 萬美元。我們也在優化我們的責任水平。第一季度，公司回購註銷本金總額為2.04億美元的可轉換優先票據，現金對價總額為1.479億美元，節省現金3.388億元。

As of March 31, 2022, we had cash and cash equivalents, term deposits and short-term investment of RMB 24.7 billion. As for our intent to convert to do primary listing on the Main Board of Hong Kong Stock Exchange and the NASDAQ, the Hong Kong Exchange had acknowledged our application, setting October 3, 2022, as the proposed effective date for our conversion to primary listing. It will expand our access to a wider investor base while we expect to maintain our listing status on NASDAQ.

截至 2022 年 3 月 31 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 247 億元。至於我們轉為在香港聯交所主板和納斯達克進行第一上市的意向，香港交易所已確認我們的申請，將 2022 年 10 月 3 日定為我們轉為第一上市的建議生效日期。它將擴大我們接觸更廣泛投資者基礎的渠道，同時我們希望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 second quarter of 2022 to be between RMB 4.85 billion and RMB 4.95 billion.

考慮到這一點，我們目前預計 2022 年第二季度的淨收入將在人民幣 48.5 億元至人民幣 49.5 億元之間。

Thank you for your attention. We will like now 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 Lei Zhang with Bank of America.

（操作員說明）我們的第一個問題來自美國銀行的張磊。

(foreign language) My question is mainly about the of COVID lockdown impact to our business in first half. And then how should we look at our second half user trend and overall business outlook post the lockdowns?

（外語）我的問題主要是關於上半年COVID鎖定對我們業務的影響。那麼我們應該如何看待我們下半年的用戶趨勢和鎖定後的整體業務前景？

(foreign language)

（外語）

[Interpreted] Well, I believe the pandemic is one of the question that most people cared about for the first half of this year. And it indeed has bought severe impact to macro economy and people's everyday life, especially in Shanghai, as one of the cities was particularly impacted.

【解讀】嗯，我相信疫情是今年上半年大家最關心的問題之一。它確實對宏觀經濟和人們的日常生活造成了嚴重影響，特別是在上海，因為其中一個城市受到的影響尤為嚴重。

(foreign language)

（外語）

[Interpreted] Taking Bilibili, for example. Over 8,000 of our Shanghai employees have been working from home since 14th of March, and we are just now starting to gradually returning back to office this week. Until 13th of June, all the employees will be fully back to work. This is a total 3 full months. You can imagine how it does to every day -- people's everyday life in Shanghai.

【解讀】以嗶哩嗶哩為例。自 3 月 14 日以來，我們上海的 8,000 多名員工一直在家工作，而本週我們才剛剛開始逐步返回辦公室。至6月13日，所有員工將全面復工。這總共是整整3個月。你可以想像它對日常生活的影響——上海人們的日常生活。

(foreign language)

（外語）

[Interpreted] And how do we see this impact -- COVID impact to Bilibili? Indeed, it has bought short-term impact to our business, particularly for advertising and e-commerce. However, we do not think -- we don't think there's any impact to Bilibili's long-term growth.

[解釋] 我們如何看待這種影響——新冠病毒對 Bilibili 的影響？事實上，它對我們的業務產生了短期影響，尤其是對廣告和電子商務而言。但是，我們不認為——我們認為這對 Bilibili 的長期增長沒有任何影響。

(foreign language)

（外語）

[Interpreted] For example, for our advertising business, there are some short-term impact. For example, in many cities in China in the first half of this year, people are in some sort of lockdown or stay-at-home mode, making a lot of the advertisers, putting their advertising plan on hold or delaying their advertising dollars. And that's the facts.

【解讀】比如我們的廣告業務，有一些短期的影響。例如，今年上半年，在中國的許多城市，人們處於某種封鎖或居家模式，這使得很多廣告商，他們的廣告計劃被擱置或延遲了他們的廣告收入。這就是事實。

(foreign language)

（外語）

[Interpreted] As for Bilibili's e-commerce business, because starting from March, especially in April and May, a lot of logistics disruption due to the lockdowns or staying at home measures across different cities in Shanghai -- in China, and that's impacting people's willingness to purchase as well as the deliver services. So we do expect this impact will continue in second quarter.

【解讀】關於嗶哩嗶哩的電商業務，因為從3月份開始，特別是4、5月份，由於中國上海不同城市的封城或者居家措施，很多物流中斷，影響了人們的生活。購買意願和提供服務。因此，我們確實預計這種影響將在第二季度繼續存在。

(foreign language)

（外語）

[Interpreted] And all this impact to our ad business and e-commerce business, we do think it's temporary. Especially after June, when we reach certain milestones, to combating the COVID situation, a lot of the impact is starting to mitigate and disappear.

[解釋] 所有這些對我們的廣告業務和電子商務業務的影響，我們確實認為這是暫時的。尤其是在 6 月之後，當我們達到某些里程碑時，在抗擊 COVID 的情況下，很多影響開始減輕和消失。

(foreign language)

（外語）

[Interpreted] As for Bilibili's fundamental, we don't think there's any impact brought by the pandemic. For example, the visualization is an unstoppable trend. And we see the young generations, their needs towards entertainment and cultural products, is still very, very strong, and their comfunction towards cultural-related product has become even stronger. So that's why we do not -- we do think that there's no impact to our fundamentals.

【解讀】關於嗶哩嗶哩的基本面，我們認為疫情不會帶來任何影響。例如，可視化是不可阻擋的趨勢。而我們看到年輕一代，他們對娛樂和文化產品的需求還是非常非常強烈的，他們對文化相關產品的組合更加強大。所以這就是我們不這樣做的原因——我們確實認為這對我們的基本面沒有影響。

(foreign language)

（外語）

[Interpreted] And looking at the specific user metrics, for example, in Q1, our MAU grew 31% year-on-year, DAU grew 32% year-on-year. Both of the metrics is accelerating compared to Q1 last year.

【解讀】再看具體的用戶指標，比如第一季度，我們的 MAU 同比增長 31%，DAU 同比增長 32%。與去年第一季度相比，這兩個指標都在加速。

(foreign language)

（外語）

[Interpreted] As for the quality of our user growth for this quarter, our DAU's growth rate outpaced the MAU growth rate. And for our paying user growth rate, outpaced the DAU's growth rate. And we achieved a record-high paying ratio of 9.3. So we have not only experienced a very fast user growth rate, the quality of those user is also very strong. And this is all done under the scenario that we have not increased any of our sales and marketing budget.

【解讀】就本季度我們的用戶增長質量而言，我們的 DAU 增長率超過了 MAU 增長率。而對於我們的付費用戶增長率，超過了 DAU 的增長率。我們實現了創紀錄的 9.3 的薪酬比率。所以我們不僅經歷了非常快的用戶增長速度，這些用戶的質量也非常強。這一切都是在我們沒有增加任何銷售和營銷預算的情況下完成的。

(foreign language)

（外語）

[Interpreted] Bilibili have the business model of a typical platform, Internet platform business model. Whether it's DAU or paying ratio or this record-high time spent of 95 minutes, and the engagement level grew 87% year-on-year. All those metric can be translated to commercialization. And that's why we think the COVID, for Bilibili, has no long-term impact.

【解讀】嗶哩嗶哩有典型平台的商業模式，互聯網平台的商業模式。無論是 DAU、付費率還是這一創紀錄的 95 分鐘時間，參與度同比增長 87%。所有這些指標都可以轉化為商業化。這就是為什麼我們認為 COVID 對 Bilibili 沒有長期影響。

(foreign language)

（外語）

[Interpreted] As for the outlook for the second half of this year, for Q2, there's still impact lingering and perhaps the impact to Q2 is even greater than Q1. But since June this year, we can see there's a sudden change of the environment, different cities in the country starting to recover from the lockdowns. And that's why we do think, for the second half of this year, things will start to recover.

【解讀】對於今年下半年的展望，對於Q2來說，影響依然揮之不去，或許對Q2的影響甚至比Q1還要大。但自今年 6 月以來，我們可以看到環境突然發生變化，全國不同城市開始從封鎖中恢復。這就是為什麼我們確實認為，在今年下半年，情況將開始復蘇。

(foreign language)

（外語）

[Interpreted] As for the user growth, we have delivered step-by-step of our user growth target. At the same time, we're playing more -- we're paying more attention to the quality of the user. At the same time, closely monitor the expense we spend on sales and marketing.

【解讀】在用戶增長方面，我們已經逐步實現了用戶增長目標。同時，我們玩得更多——我們更關注用戶的質量。同時，密切監控我們在銷售和營銷上的支出。

(foreign language)

（外語）

[Interpreted] As for the business side, as I mentioned, June is the month we're starting to walk out of the COVID impact. And we also believe this is the time we're starting to pick up our growth rate for each of our business line.

[解釋] 至於業務方面，正如我所提到的，6 月是我們開始擺脫 COVID 影響的月份。我們也相信這是我們開始加快每個業務線增長率的時候了。

Our next question comes from even Yiwen Zhang with China Renaissance.

我們的下一個問題甚至來自於華興資本的張一文。

(foreign language) So my question is regarding Story Mode. So can management share more color or its latest update? Such as what role it plays in our broader content ecosystem? And what's the progress on the commercialization ratio around that?

（外語）所以我的問題是關於故事模式。那麼管理層可以分享更多顏色或其最新更新嗎？比如它在我們更廣泛的內容生態系統中扮演什麼角色？圍繞它的商業化率有什麼進展？

(foreign language)

（外語）

[Interpreted] Indeed, since we released earnings, a lot of people are asking about the progress of Story Mode because the Story Mode total video views has now contributing more than 20% of our total video views. This is a very tangible new format of content that's playing a bigger role.

【解讀】確實，自從我們發布財報以來，很多人都在詢問故事模式的進展，因為故事模式的總視頻瀏覽量現在已經占到我們總視頻瀏覽量的 20% 以上。這是一種非常有形的新內容格式，正在發揮更大的作用。

(foreign language)

（外語）

[Interpreted] First of all, I have 3 points I wanted to emphasize on Story Mode. First of all, it is a pure incremental traffic for Bilibili. It's not like the Story Mode traffic is replacing some of the old PUGV traffic. But while users are watching more few PUGVs, they are watching even more Story Mode.

[解釋] 首先，我想在故事模式上強調 3 點。首先，對於嗶哩嗶哩來說是純增量流量。故事模式的流量並沒有取代一些舊的 PUGV 流量。但是，當用戶觀看更多 PUGV 時，他們正在觀看更多故事模式。

(foreign language)

（外語）

[Interpreted] And from a statistic perspective, our video views has grown 84% year-on-year and Story Mode is contributing over 20% of the total traffic. And if we are excluding the Story Mode contribution, the PUGV growth rate is still around 50% to 60%, which is the similar rate we have kept in the past. That means the Story Mode is a pure incremental addition to our Bilibili ecosystem.

[解讀]從統計數據來看，我們的視頻觀看量同比增長 84%，故事模式貢獻了超過 20% 的總流量。而如果我們排除故事模式的貢獻，PUGV 的增長率仍然在 50% 到 60% 左右，這與我們過去保持的相似。這意味著故事模式是對我們 Bilibili 生態系統的純粹增量補充。

(foreign language)

（外語）

[Interpreted] As for the Story Mode, the vertical short form -- short video format, this is not something new. As a matter of fact, we have this type of content starting from 2 to 3 years ago. And to our daily operation, the most important thing is to make sure, for this type of content, is adding an incremental traffic instead of replacing old traffic. And from the results, we have done a very good job.

【解讀】故事模式，垂直短片形式——短視頻形式，這不是什麼新鮮事。事實上，我們從 2 到 3 年前就有這種類型的內容。而對於我們的日常運營來說，最重要的是要確保對於這種類型的內容，是增加流量而不是替換舊流量。而且從結果來看，我們做得非常好。

(foreign language)

（外語）

[Interpreted] Why we can build an incremental user traffic growth from Story Mode? Because we have built the Story Mode, a very Bilibili, unique flavor, type of content. If we look at the Story Mode's video creator, many of those are our content creator. And for the consumer of the Story Mode are Bilibili existing users. But those user are consuming this type of content during their fragmented time on a more light scenario.

【解讀】為什麼我們可以從故事模式中構建增量用戶流量增長？因為我們打造了Story Mode，一個非常Bilibili、獨特風味、類型的內容。如果我們看看故事模式的視頻創作者，其中許多是我們的內容創作者。而故事模式的消費者則是 Bilibili 的現有用戶。但是那些用戶在他們零散的時間裡在一個更輕鬆的場景中消費這種類型的內容。

So we believe, for the Story Mode, actually, it is comprehensive as a whole product, supplement to our original PUGV content. And it's actually expanding a new consumption scenario for our users.

所以我們認為，對於故事模式，其實它是一個綜合性的產品，是對我們原有的PUGV內容的補充。它實際上正在為我們的用戶擴展一個新的消費場景。

(foreign language)

（外語）

[Interpreted] And for our content creator who's very good at making long-form videos, it's actually very easy for them to create a short vertical format of content. It's like asking Yu Hua to post a Weibo, but it's very difficult to ask a Weibo user to write a long article.

【解讀】對於我們這個非常擅長製作長視頻的內容創作者來說，他們其實很容易就可以製作出短的垂直格式的內容。好比讓余華髮微博，但要讓微博用戶寫長文就很難了。

(foreign language)

（外語）

[Interpreted] And asking our content creator to make more shorter vertical format of content, it actually help us to increase the video submission and also is helping our user to expand their video consumption scenario, making them more -- become more active and engaged on our platform. It's a win-win situation for us.

[解讀] 並要求我們的內容創作者製作更短的垂直格式內容，這實際上有助於我們增加視頻提交，也幫助我們的用戶擴展他們的視頻消費場景，讓他們更加 -- 變得更加活躍和參與我們的平台。這對我們來說是一個雙贏的局面。

(foreign language)

（外語）

[Interpreted] And thirdly, I want to emphasize, for Bilibili, we are not a tool type of product. It's very easy for people to see some of the Internet platform or product as a tool. This particular product is for player for long-form video. This is a product for a short video player. This is a platform for live broadcasting. But for Bilibili, we have it all. Because instead of being a tool, Bilibili is actually a content, a community platform that gathers people.

【解讀】第三，我想強調一下，對於嗶哩嗶哩來說，我們不是一個工具類的產品。人們很容易將一些互聯網平台或產品視為一種工具。此特定產品適用於長視頻播放器。這是一款短視頻播放器產品。這是一個直播平台。但對於 Bilibili，我們擁有一切。因為B站不是一個工具，而是一個內容，一個聚集人的社區平台。

(foreign language)

（外語）

[Interpreted] For the industry player, we are used to separate users by the product names. However, from a user perspective, they choose product by the content verticals, not by their industry categories.

【解讀】對於行業玩家來說，我們習慣用產品名稱來區分用戶。但是，從用戶的角度來看，他們是根據內容垂直選擇產品，而不是根據他們的行業類別。

For example, a game lover will not only watch the PUGV, game PUGV, they will watch the game-related live broadcasting. He or she might also play Bilibili produced or licensed games.

比如游戲愛好者不僅會看PUGV，遊戲PUGV，還會看遊戲相關的直播。他或她也可能會玩 Bilibili 製作或授權的遊戲。

As for our knowledge sector users, he or she might both consume the knowledge-related PUGV and also watch the documentary on Bilibili.

至於我們知識界的用戶，他或她可能既會消費與知識相關的PUGV，也可能會觀看關於B站的紀錄片。

(foreign language)

（外語）

[Interpreted] And so as for story, there are massive content supply on story, is related to lifestyle, foodie, pet. And those content category are actually mirroring the PUGV categories on Bilibili.

【解讀】故事方面，故事內容供應量很大，與生活方式、吃貨、寵物有關。而這些內容類別實際上是在反映 Bilibili 上的 PUGV 類別。

(foreign language)

（外語）

[Interpreted] Many years ago, when Bilibili started to do live broadcasting business, people would ask if we want to compete with certain live broadcasting platform. The answer has been no. Because this is expanding our users' needs and expanding our content offerings. And so as for Story Mode, we're not competing with the short-form video platforms out there. We're actually satisfying our users' existing need and expand their content consumption scenario, giving what they need.

【解讀】很多年前，當嗶哩嗶哩做直播業務的時候，有人會問我們要不要跟某個直播平台競爭。答案是否定的。因為這正在擴展我們用戶的需求並擴展我們的內容產品。至於故事模式，我們不會與那裡的短視頻平台競爭。我們實際上是在滿足用戶現有的需求，並擴展他們的內容消費場景，提供他們需要的東西。

(foreign language)

（外語）

[Interpreted] Lastly, on commercialization. The beauty of the short-form videos are -- its model has been very, very mature. And there are so many very successful precedents in the industry. It has been proven to be -- have very high efficiency of ad conversion rate. And its conversion for live broadcasting is also very good. And from our practice, it's also being proven, this model works. And this will bring incremental commercialization opportunity to Bilibili.

[解釋] 最後，關於商業化。短視頻的美妙之處在於——它的模式已經非常非常成熟了。業內有很多非常成功的先例。它已經被證明是——具有非常高的廣告轉化率效率。而且它對於直播的轉化也很不錯。而且從我們的實踐中也可以證明，這種模式是有效的。而這將為嗶哩嗶哩帶來增量的商業化機會。

(foreign language)

（外語）

[Interpreted] We're starting to make a lot of trial runs with Story Mode product. Until now, so far, the progress has met with our expectations. And we'll continue to allocate more resource to develop Story Mode. And we believe it will bring incremental traffic to our Bilibili ecosystem. Essentially, it could be even bigger than the incremental PUGV traffic that bring -- has brought to Bilibili.

[解釋] 我們開始對故事模式產品進行大量試運行。到目前為止，進展情況符合我們的預期。我們將繼續分配更多資源來開發故事模式。我們相信它將為我們的 Bilibili 生態系統帶來增量流量。從本質上講，它可能比為 Bilibili 帶來的增量 PUGV 流量還要大。

(foreign language)

（外語）

[Interpreted] And rest assured, the launch of Story Mode will not change how the Bilibili ecosystem works. It will actually become a new highlight of the Bilibili ecosystem.

【解讀】請放心，故事模式的上線不會改變嗶哩嗶哩生態的運作方式。它實際上將成為嗶哩嗶哩生態的新亮點。

As like many years ago, we started to do live broadcasting, and some of the user expressed concern whether we're going to change to a live broadcasting platform. As a matter of fact, now live broadcasting has become an essential element embedded within our ecosystem. I believe the same thing will happen with the Story Mode.

和很多年前一樣，我們開始做直播，一些用戶表示擔心我們是否要轉為直播平台。事實上，現在直播已經成為我們生態系統中必不可少的元素。我相信故事模式也會發生同樣的事情。

Bilibili will not become a short video platform. However, this will be part of our ecosystem, serving users' different needs and expanding our content offerings, bringing incremental traffic.

B站不會變成短視頻平台。然而，這將成為我們生態系統的一部分，服務於用戶的不同需求並擴展我們的內容產品，帶來增量流量。

(foreign language)

（外語）

[Interpreted] We believe, in the near future, we'll have more and more high-quality mid- to longer-form video being born on Bilibili. There will be even more high-quality short-form video born and spread on Bilibili.

【解讀】我們相信，在不久的將來，我們會在嗶哩嗶哩上誕生越來越多的高質量中長視頻。將有更多優質短視頻在B站誕生和傳播。

That concludes Mr. Chen's answer.

陳先生的回答到此結束。

Our next question comes from Alex Yao with JPMorgan.

我們的下一個問題來自摩根大通的 Alex Yao。

(foreign language) I would like to ask some questions on advertising. Fundamentally, we agree with Mr. Chen Rui. The long-term determinator to advertising monetization includes: Number one, the total platform usage; number two, user demographic; and number three, the ad tech, none of which has anything to do with the short-term COVID impact. But we, as the investment community, follows the company and track the company on a quarterly basis. So we would like to understand the near-term trends of our advertising.

（外語）我想問一些關於廣告的問題。基本上，我們同意陳睿先生的看法。廣告變現的長期決定因素包括： 第一，平台總使用量；第二，用戶人口統計；第三，廣告技術，這些都與 COVID 的短期影響無關。但我們作為投資界，會關注公司，每季度跟踪公司一次。所以我們想了解我們廣告的近期趨勢。

For example, what are the advertiser categories that are more vulnerable to the COVID impact? And what are the categories who are more resilient?

例如，哪些廣告客戶類別更容易受到 COVID 影響？哪些類別更具彈性？

Similarly, what are the advertising formats that are more resilient? And what are the more vulnerable advertising format?

同樣，哪些廣告形式更具彈性？更易受攻擊的廣告形式是什麼？

Now that Shanghai has reopened, how do we see the advertising revenue growth rate into the next couple of quarters?

現在上海已經重新開放，我們如何看待未來幾個季度的廣告收入增長率？

(foreign language)

（外語）

[Interpreted] Thank you, Alex. I think you mastered the very essential advantage of Bilibili's advertising business. Like you said, due to macro economy slowdown and the pandemic impact, many advertisers' budget were delayed or placed on hold in the first half. At the same time, this is also making the advertising market reflecting the various reasons to invest for advertising.

[解釋] 謝謝你，亞歷克斯。我想你掌握了嗶哩嗶哩廣告業務最本質的優勢。正如您所說，由於宏觀經濟放緩和疫情影響，上半年許多廣告主的預算被推遲或擱置。同時，這也使得廣告市場反映了投資廣告的各種理由。

We believe the platform that we have is -- the platform has high user value and the ability to influence users' mindset. And we've also continued to invest in technology that improve our conversion rate. We believe, in the longer term, Bilibili will be more favored by advertisers.

我們相信我們擁有的平台是——該平台具有很高的用戶價值和影響用戶心態的能力。我們還繼續投資於提高轉化率的技術。我們相信，從長遠來看，B站會更受廣告商的青睞。

(foreign language)

（外語）

[Interpreted] The average age of Bilibili user is 23.5 years old, and 86% of our users are below 35 years old. More than half of our users are from first- and second-tier city. All of which metric represents the main cohort that's driving all kinds of consumption in China. By mastering this population, we have become the platform that all the advertisers crave.

【解讀】嗶哩嗶哩用戶平均年齡23.5歲，我們86%的用戶年齡在35歲以下。我們一半以上的用戶來自一二線城市。所有這些指標都代表了推動中國各種消費的主要群體。通過掌握這個人群，我們已經成為所有廣告商渴望的平台。

And if you look at past 2 to 3 years, our ad load has stayed 5%. We haven't increased any of our ad load. Our advertising has maintained relatively higher growth rate throughout the last 2 to 3 years. And this is an evidence that the advertiser really values Bilibili's user as well as the Bilibili brand. Even though that the ad dollar in the market might reduce in the short term, but we remain optimistic about Bilibili's advertising long-term growth.

如果您查看過去 2 到 3 年，我們的廣告負載一直保持在 5%。我們沒有增加任何廣告負載。在過去的 2 到 3 年中，我們的廣告一直保持相對較高的增長率。而這也證明了廣告主真的很看重嗶哩嗶哩的用戶和嗶哩嗶哩的品牌。儘管市場上的廣告收入短期內可能會減少，但我們仍然看好嗶哩嗶哩的廣告長期增長。

(foreign language)

（外語）

[Interpreted] As for the industry vertical that's especially resilient in the first quarter, game, 3C, food and beverage, skincare and cosmetics, has been pretty strong and resilient, especially for games and automotive. In first quarter, without any game approval being issued, we have delivered a better-than-expected game advertising dollar increase.

【解讀】一季度表現尤為強勁的垂直行業，遊戲、3C、食品飲料、護膚品、化妝品等行業表現強勁，尤其是遊戲和汽車行業。第一季度，在沒有發布任何遊戲批准的情況下，我們實現了好於預期的遊戲廣告收入增長。

As for automotive, because Bilibili's user is growing with the platform, their consumption power is also growing. This has been captured by a lot of the automotive advertisers. They are willing to spend more advertising dollars to attract and influence Bilibili users.

至於汽車，因為嗶哩嗶哩的用戶隨著平台的增長而增長，他們的消費力也在增長。這已經被很多汽車廣告商捕捉到了。他們願意花費更多的廣告費用來吸引和影響 Bilibili 用戶。

(foreign language)

（外語）

[Interpreted] Confronting the macro uncertainties and short-term fluctuations, we will be focusing on doing the right things, the right thing that serves for long term. We will be focusing on developing more standardized and industrialized, integrating marketing ability. This will be our long-term growth engine. And relying on the rapid iteration of our product capabilities and data capabilities, we'll continue to strengthen the construction of our middle platform for commercialization.

【解讀】面對宏觀不確定性和短期波動，我們將專注於做正確的事，做對的事，為長遠服務。我們將著力發展更加標準化、產業化、一體化的營銷能力。這將是我們的長期增長引擎。並依托產品能力和數據能力的快速迭代，不斷加強商業化中台建設。

And among the ad customers who invested in Q1, [47%] (corrected by company after the call) of them bought across different products -- across different ad products. Ad customer who brought integrated marketing campaign, namely brand performance and native ads, also grew significantly year-over-year.

在第一季度投資的廣告客戶中，[47%]（在電話會議後由公司更正）購買了不同的產品——不同的廣告產品。帶來整合營銷活動的廣告客戶，即品牌表現和原生廣告，也同比顯著增長。

(foreign language)

（外語）

[Interpreted] On top of what we are good at, that area, we're also expanding our ad scenario, integrate multiple products and multiple scenario, including PC, mobile apps, iPads, Smart TV as well as PUGV, OGV, live broadcasting and moment pages, making sure, whenever the users are, our advertiser can reach them.

【解讀】除了我們擅長的那個領域，我們也在拓展我們的廣告場景，整合多產品多場景，包括PC、手機APP、iPad、Smart TV以及PUGV、OGV、直播和時刻頁面，確保無論何時用戶，我們的廣告客戶都可以聯繫到他們。

And for the smart TV devices in Q1, the total MAU has reached over 50 million. And for those TV user, it serves a nice addition to our existing user base. It's a supplement to our existing user cohort. A lot of them are from third- and fourth-tier city and their time spend has been very good. And we'll continue to invest in those smart TV and help us to convert more living room and family scenarios. And we aim to further enhance this multiterminal integration to optimize our marketing solutions.

而在第一季度的智能電視設備方面，總月活躍用戶已超過 5000 萬。對於那些電視用戶來說，它為我們現有的用戶群提供了很好的補充。這是對我們現有用戶群的補充。他們中的很多人來自三四線城市，他們的時間花得很好。我們會繼續投資那些智能電視，幫助我們轉換更多的客廳和家庭場景。我們的目標是進一步加強這種多終端集成，以優化我們的營銷解決方案。

On top of all that, we will further expand and invest in the Story Mode commercialization initiatives. And from our initial data for the Story Mode, advertising eCPM has been quite significantly higher compared to our traditional advertising scenarios, and its conversion rate is also improving.

最重要的是，我們將進一步擴大和投資故事模式商業化計劃。而且從我們最初的故事模式數據來看，廣告eCPM與我們傳統的廣告場景相比已經有了相當大的提升，轉化率也在提升。

So on top of that, we will first do what we are good at and add more scenarios and continue to invest in the Story Mode commercialization.

所以在此之上，我們會先做我們擅長的事情，增加更多的場景，繼續投入故事模式的商業化。

(foreign language)

（外語）

[Interpreted] And further leveraging our content creators' creativity, we'll launch more ad products that fits with Bilibili ecosystem. Now more than 24,000 content creator and more than 6,500 advertisers has joined our Sparkle ad platform. We believe this number will double this year.

【解讀】我們將進一步發揮內容創作者的創造力，推出更多適合B站生態的廣告產品。現在，超過 24,000 名內容創作者和 6,500 多名廣告商加入了我們的 Sparkle 廣告平台。我們相信這個數字今年會翻一番。

And for Sparkle ad platform, is one of the advantageous Bilibili advertising has, it essentially is a reservoir for advertisers. Content creators' creative ideas will help us to retain advertisers to stay in our ecosystem.

而對於Sparkle廣告平台來說，是B站廣告的優勢之一，本質上是廣告主的蓄水池。內容創作者的創意將幫助我們留住廣告商留在我們的生態系統中。

For the second half of this year, we will aim to expedite the process of connecting native ads with more standardized ad products. For example, in the first quarter, more than 40% of our ad customer purchased other standardized ad product to pair with their Sparkle orders.

今年下半年，我們的目標是加快原生廣告與更加標準化的廣告產品的對接。例如，在第一季度，超過 40% 的廣告客戶購買了其他標準化廣告產品來搭配他們的 Sparkle 訂單。

(foreign language)

（外語）

[Interpreted] Lastly, we aim to combine the industry trends with our ecosystem advantages. Riding on the waves of visualization trend and leveraging the power of our content ecosystem, we have achieved healthy and quality growth of users. And we've also discovered the video-based ad has much better conversion rate than the traditional ads. Over 65% of our performance ads revenue came from video-based ads. And our eCPM has grown significantly year-over-year in the quarter. And the Story Mode, on the other hand, also serves a very incremental traffic and revenue growth for advertising business.

【解讀】最後，我們的目標是將行業趨勢與我們的生態系統優勢相結合。順應可視化趨勢，借助內容生態的力量，我們實現了用戶的健康優質增長。而且我們還發現基於視頻的廣告比傳統廣告具有更好的轉化率。我們超過 65% 的效果廣告收入來自基於視頻的廣告。我們的 eCPM 在本季度同比顯著增長。另一方面，故事模式也為廣告業務提供了非常增量的流量和收入增長。

So for the -- as we look for the second half of the year, we'll continue to do the right thing and to invest for the future, and the results will speak for itself.

因此，在我們展望下半年時，我們將繼續做正確的事情並為未來投資，結果將不言而喻。

Our next question comes from Alex Poon with Morgan Stanley.

我們的下一個問題來自摩根士丹利的 Alex Poon。

(foreign language) My question is related to live streaming business. Regarding the recent new regulation, can management share with us the impact of this regulation? And what's our expectation for development of this in future?

（外語）我的問題是關於直播業務的。關於最近的新規定，管理層能否與我們分享該規定的影響？我們對未來的發展有何期待？

(foreign language)

（外語）

[Interpreted] So for the recent regulation update, it actually has no impact to Bilibili's live broadcasting business. And the full year target for our live broadcasting business remain unchanged.

【解讀】所以最近的監管更新，其實對B站的直播業務沒有影響。直播業務全年目標不變。

(foreign language)

（外語）

[Interpreted] We've always mentioned that live broadcasting serves a very important part of our ecosystem. It's a natural extension of our video platform. Our growth will not be relying on attracting outside live broadcaster to the platform, attracting outside user to Bilibili's live broadcasting. As a matter of fact, there's a very strong overlap between the live broadcasters and content creators, a lot of the overlap with the video users and live broadcasting users. So my confidence in live broadcasting long term and sustainable growth remain unchanged.

【解讀】我們一直都提到，直播是我們生態系統中非常重要的一部分。這是我們視頻平台的自然延伸。我們的增長將不依賴於吸引外部直播者到平台，吸引外部用戶到 Bilibili 的直播。事實上，直播者和內容創作者之間有很強的重疊，視頻用戶和直播用戶有很多重疊。所以我對直播長期可持續增長的信心沒有改變。

Our next question comes from Xueqing Zhang with CICC.

我們的下一個問題來自中金公司的張學清。

(foreign language) I would like to ask questions related to gross margin and the cost control and the ongoing COVID-19 pandemic.

（外語）我想問有關毛利率和成本控制以及正在進行的 COVID-19 大流行的問題。

Firstly, with the latest strategic focus, will you place higher priority on gross margin improvement and cost control? And we proposed a target to achieve a breakeven point on a non-GAAP basis by 2024 in last quarter's earnings call. Is there any change? And how do you balance the target with user growth?

首先，隨著最新的戰略重點，您會更加重視毛利率的提高和成本控制嗎？我們在上一季度的財報電話會議上提出了到 2024 年在非公認會計原則基礎上實現盈虧平衡點的目標。有什麼變化嗎？您如何平衡目標與用戶增長？

And last, what's the gross margin trend for the second quarter and the second half of the year? Appreciate a lot if you could share more color on the segment gross margin trend.

最後，第二季度和下半年的毛利率趨勢如何？如果您能在細分市場毛利率趨勢上分享更多色彩，將不勝感激。

(foreign language)

（外語）

[Interpreted] So the target of achieving non-GAAP operating breakeven by 2024 remain unchanged. As I mentioned, the COVID impact for Bilibili is short term and temporary. It doesn't hurt our fundamentals or -- nor our long-term target.

[解讀]因此，到 2024 年實現非公認會計準則營業盈虧平衡的目標保持不變。正如我所提到的，新冠病毒對 Bilibili 的影響是短期和暫時的。它不會損害我們的基本面或——也不會損害我們的長期目標。

(foreign language)

（外語）

[Interpreted] The margin pressure you see in first quarter is mainly due to COVID that resulted in slowdown of our revenue growth. And if you look at the expense side, we're actually not spending more money.

[解釋] 您在第一季度看到的利潤率壓力主要是由於 COVID 導致我們的收入增長放緩。如果你看一下費用方面，我們實際上並沒有花更多的錢。

(foreign language)

（外語）

[Interpreted] And you asked about the relationship between user growth and expense control. As a matter of fact, Bilibili's user growth model was never purely driven by the sales and marketing expense. It's actually driven by our content ecosystem, by this in natural brought good content. Those good content is essentially attracting user growth.

【解讀】還有你問到用戶增長和費用控制之間的關係。事實上，B站的用戶增長模式從來都不是單純的銷售和營銷費用驅動的。它實際上是由我們的內容生態系統驅動的，由此自然帶來了好的內容。那些好的內容本質上是在吸引用戶增長。

And the expense we spend on sales and marketing is only helping people to quickly realize there's a very good platform called Bilibili. So it's never about just spending sales and marketing to drive user growth. As a matter of fact, our users' engagement level and retention level has remained a very healthy nature. And in the future, we'll be paying more attention on the sales and marketing ROI. And -- but for this effort, it will not impact our user growth trend as well as the retention rate.

而我們花在銷售和營銷上的費用只是幫助人們快速意識到有一個非常好的平台，叫做嗶哩嗶哩。因此，這不僅僅是為了推動用戶增長而僅僅花費銷售和營銷費用。事實上，我們用戶的參與度和留存度一直保持非常健康的狀態。未來，我們將更加關註銷售和營銷的投資回報率。而且——但對於這項工作，它不會影響我們的用戶增長趨勢以及保留率。

(foreign language)

（外語）

[Interpreted] As to the question whether we're going to put expense control on top of the everything else. I had mentioned in last earnings call, starting from 2022, there's a lot of macro changes domestically and internationally, even though there's, in addition, COVID impact. But a lot of the difficulties we're facing is not just brought because of the COVID. And in nature, to control costs and improve efficiency, is the most important job for Bilibili and also for the industry as well.

[解釋] 至於我們是否要將費用控制置於其他一切之上的問題。我在上次財報電話會議中提到，從 2022 年開始，國內和國際都發生了很多宏觀變化，儘管此外還有 COVID 影響。但我們面臨的許多困難不僅僅是因為新冠病毒。從本質上講，控製成本和提高效率是B站最重要的工作，也是行業最重要的工作。

And for the specific action points, we wanted to be very, very focused strategically to go deep with our business, not go broad. And yes, this is -- this has come to a stage for Bilibili, as well as the industry player, to be all focused on cost control and efficiency improvement.

對於具體的行動點，我們希望在戰略上非常、非常專注於深入開展業務，而不是擴大範圍。是的，這是 - 這已經到了 Bilibili 以及行業參與者都專注於成本控制和效率提升的階段。

(foreign language)

（外語）

[Interpreted] As for the gross margin, the margin pressure that we're facing in first quarter is mainly because the COVID impact resulted in the revenue growth slowdown. As I mentioned, as the COVID starting to ease in the second half of this year, our revenue growth rate will return to a normal trajectory. And also, the gross margin level will come along with it.

【解讀】毛利率方面，我們第一季度面臨的利潤率壓力主要是因為新冠疫情影響導致收入增長放緩。正如我所提到的，隨著今年下半年 COVID 開始緩解，我們的收入增長率將恢復正常軌跡。而且，毛利率水平也會隨之而來。

Yes. I just want to add some points. First of all, when we were talking about the breakeven, everyone prioritize the cost control, efficiency improvement. But we think, for Bilibili, as mentioned by Mr. Chen, it's equally important to expand our top line.

是的。我只想補充幾點。首先，我們在講盈虧平衡的時候，大家都優先考慮成本控制、效率提升。但我們認為，對於 Bilibili 來說，正如陳先生所說，擴大我們的收入同樣重要。

So first of all, we still believe there's still room for us to improve our monetization efficiency. So we are aiming to improve our paying ratio and expand our ad market share to improve our segment margin throughout the second half of this year. Even in the first quarter, we still saw the gross profit margin for live broadcasting and our ad business improve quarter-over-quarter. So that trend will continue in the remaining of this year.

所以首先，我們仍然相信我們仍有提高貨幣化效率的空間。因此，我們的目標是提高我們的支付比率並擴大我們的廣告市場份額，以提高我們今年下半年的細分市場利潤率。即使在第一季度，我們仍然看到直播的毛利率和我們的廣告業務環比增長。因此，這一趨勢將在今年餘下時間繼續。

And for the cost control side, we also made some progress in the first quarter. But in the second quarter, there are some pandemic. So the result of the cost control actually will be more reflected in the second half of this year.

而在成本控制方面，我們在一季度也取得了一些進展。但在第二季度，有一些流行病。所以成本控制的效果實際上會在今年下半年得到更多體現。

And we -- there are some highlights to the numbers. First of all, you saw the selling and marketing expenses decrease by 29% quarter-over-quarter. Now it's just flat to 25% of total revenues. Last quarter was 30%. And for the server and bandwidth cost, it's down like 2% quarter-over-quarter while our total user traffic grow like 28% quarter-over-quarter. And for R&D expenses, we primarily invest in game development, data, ad efficiency and product-related abilities.

我們 - 這些數字有一些亮點。首先，您看到銷售和營銷費用環比下降了 29%。現在它僅佔總收入的 25%。上一季度為 30%。服務器和帶寬成本環比下降了 2%，而我們的總用戶流量環比增長了 28%。而對於研發費用，我們主要投資於遊戲開發、數據、廣告效率和產品相關能力。

We still believe it's essential to improve our productivity and to improve our monetization efficiency. But we thought it's also important to invest in the future and also look at the ROI of those investment. So this year, we plan to continue and selectively invest in this area, but we will very closely monitor the progress of each product -- project and make adjustment if necessary, and to improve our total capital efficiency.

我們仍然認為提高我們的生產力和提高我們的貨幣化效率至關重要。但我們認為投資未來並查看這些投資的投資回報率也很重要。所以今年，我們計劃繼續並有選擇地在這一領域進行投資，但我們將非常密切地監控每個產品——項目的進展，並在必要時進行調整，以提高我們的總資本效率。

So we expect the selling and marketing, G&A and R&D as a percentage of total revenue will be gradually decline from Q3 as our top line expand, and the loss margin will be naturally narrow.

因此，我們預計隨著我們收入的擴大，銷售和營銷、G&A 和研發佔總收入的百分比將從第三季度開始逐漸下降，虧損幅度自然會縮小。

For Q2, yes, the overall spending will be flat quarter-over-quarter. So that will be the outlook for the margin side. Yes, that's all.

對於第二季度，是的，總體支出將環比持平。因此，這將是邊際方面的前景。是的，僅此而已。

And that concludes the question-and-answer session. I would like to turn the conference call back over to management for additional or closing comments.

問答環節到此結束。我想將電話會議轉回管理層，以徵求其他意見或結束意見。

Well, thank you once again for joining us today. If you have further questions, please contact me, Juliet Yang, Bilibili's Executive IR Director, or TPG Investor Relations. Our contact information for IR in both China and U.S. can be found on today's press release. Have a great day. Bye-bye.

好吧，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。祝你有美好的一天。再見。

This concludes the program. You may now disconnect.

程序到此結束。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朗讀。]