Bilibili [BILI] Conference call transcript for 2022 q2
2022-09-08 12:44:05
Fiscal: 2022 q2
Operator: Good day, and welcome to Bilibili's Second Quarter 2022 Financial Results and Business Update Conference Call. Today's conference is being recorded. At this time, I'd like to turn the conference over to Juliet Yang, Executive Director of Investor Relations. Thank you. Please go ahead.
Juliet Yang : Thank you, operator. During this call, we'll discuss our business outlook and make forward-looking statements. These comments are based on our predictions and expectations as of today. Actual events or results could differ materially from those mentioned in today's news release and in this discussion due to a number of risks and uncertainties, including those mentioned in our most recent filings with the SEC and Hong Kong Stock Exchange. The non-GAAP financial measure we provide are for comparison purpose only. Definition of these measures and a reconciliation table are available in the news release we issued earlier today. As a reminder, this conference is being recorded. In addition, an investor presentation and webcast replay of this conference call will be available on Bilibili IR website at ir.bilibili.com. 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 will now turn the call over to Mr. Fan, who will read the prepared remarks on behalf of Mr. Chen.
Xin Fan : Thank you, Juliet, and thank you, everyone, for participating in our 2022 Second Quarter Results Conference Call. I'm pleased to deliver today's opening remarks on behalf of Mr. Chen. We confronted immense headwinds in the second quarter. During the period, we steadied our company by bringing users improved products, expanding our content and implementing further cost control measures. With lockdowns in Shanghai lifted in June, we believe the worst impact is behind us. Importantly, we expected to recover our operating margin in the second half of the year while continuing to grow our users and narrowing our net loss. Our total MAUs reached a new record of 306 million in the second quarter, up 29% year-over-year, representing another exciting milestone. While we remain committed to our MAU target, we are putting additional focus on the quality of users, looking at metrics such as DAUs and engagement levels. In Q2, our DAUs grew by 33% year-over-year to 84 million, outpacing the growth rate of our MAUs. This brought our D/M ratio to 27.3%, up from 26.4% in the same period last year. Daily average time spent was 89 minutes, a 9-minute increase compared with the same period last year. Longer user time spent and high user activity increased our total user traffic, which grew by 48% year-over-year. We believe our growing matrix of products, expanding content library and quality-driven growth strategy will strategically position us to continue our growth momentum. Impacted by the challenging macro environment, our total net revenues were RMB 4.9 billion, up 9% year-over-year in the second quarter. NPUs increased by 32% year-over-year to 27.5 million, and our paying ratio was 9%. Followed by a slower April and May, our advertising business rebounded nicely when the lockdowns lifted in June. With increasingly popular advertising products, such as ads in Story Mode, we grew our ad revenue by 10% year-over-year. We expect to continue gaining market share in the second half of the year. During the second quarter, we also put further cost control initiatives into effect. Specifically, we cut sales and marketing expenses by 16% year-over-year. Sales and marketing expenses as a total percentage of revenue decreased to 24% from 31% in the same period last year. Server and cast per video views also declined by 37% year-over-year. Other adjustments we made to improve our organizational efficiency, including canceling underperforming projects and reallocate resources to core business. We expect positive impact to our P&L will start to show in the second half of the year. In July, we also made some pivotal adjustments to our organization. Our goal was to be more congruent to our long-term sustainable growth. We have integrated the operations of live broadcasting with our video platform and made organizational changes that integrate our commercialization efforts across our content ecosystem, create synergies and improve efficiency. With that overview, I'd like to go through some details of our second quarter operations across our content, community and commercialization. We have seen many iterations of the online video space. Ours is the one that has remained expansive and trend-setting. The introduction of our different formats, such as Story Mode, PUGV, live broadcasting and Smart TV, significantly boost our signal of all the videos you like anytime, anywhere. Looking at Story Mode as an excellent example. Story Mode is one of our newest verticals covering users' on-the-go entertainment needs, which is more efficient in distributing video in shorter length of time. While video views from PUGV grew 53% year-over-year, video views from Story Mode increased by over 400% year-over-year, bringing incremental traffic to our platform. This is an ongoing trend that we are seeing throughout the second half of the year. Moreover, Story Mode presents a parallel commercial prospect as a gateway to different monetization opportunities, such as advertising and live broadcasting. MAU penetration in live broadcasting continues to grow across our user base. In July, we began to fully integrate our live broadcasting and PUGV ecosystems. Over time, we expect the combination of these 2 ecosystems to result in more efficient traffic execution and allocation and inspire more content creators to become live broadcasting hosts. During the second quarter, our users primarily gravitated to lifestyle, games, entertainment, ACG and knowledge categories. We continue to accumulate a massive amount of content through a growing pool of talented creators. In the second quarter, we had 13.2 million total monthly average content submissions, up 56% year-over-year. Our growth stems from our 3.6 million monthly active content creators, an increase of 50% year-over-year. In the second quarter, the number of creators with 10,000 followers grew by 46% year-over-year, and creators with over 1 million followers grew even faster at 58% year-over-year. Notably, over 60% of the content creators who gained 1 million followers during Q2 was benefited from the fast-growing Story Mode traffic. We continue to expand avenues to unleash content creators' monetization potential. In the second quarter, over 1.1 million creators received monetary rewards through live broadcasting, advertising programs or cash incentive program, up 97% from same period last year. Turning to our community. We continue to feature robust content that resonate with our users, along with a welcoming community environment. We saw this across our user metrics in the second quarter with impressive year-over-year gains. Daily video views grew by 83% to 3.1 billion, and the monthly interactions grew by 73% to 12.5 billion. As I previously mentioned, the average daily time spend also increased by 9 minutes year-over-year to 89 minutes. Now let's take a look at our commercialization efforts. Advancing our commercial prospects is one of our leading goals this year. In the second quarter, we continue to convert paying users and improved our advertising efficiency to gain more market share, maximizing our high-quality user base. Looking first at VAS business. Net revenues for VAS were RMB 2.1 billion, an increase of 29% year-over-year. We converted more traffic to paying users in the second quarter, driven primarily by our live broadcasting, where we hold unique advantages given this natural extension of our video universe. Despite the challenges of stricter regulations, our live broadcasting conversion rate remained strong in the second quarter. By integrating our PUGV ecosystem with live broadcasting, we have created a win-win solution. The number of active live broadcasters increased by 107% year-over-year in the second quarter. Our live broadcasting MAUs penetration rates continued to grow, and NPUs for live broadcasting increased by nearly 70% year-over-year. And at the same time, we improved the live broadcasting's gross margin by optimizing revenue-sharing plans. Premium membership for the second quarter reached 21 million, up 19% year-over-year. The majority of our users continue to be annual or auto-renewal subscribers. Looking at our advertising services. Revenues from this segment reached RMB 1.16 billion, an increase of 10% year-over-year. Despite the macro headwinds, our top 5 verticals in the second quarter were games, digital and 3C products, skin care and cosmetics, e-commerce and food and beverage. Optimizing our product offerings and the conversion efficiency remain our strategy for our ad business. In the second quarter, we continue to dedicate our resources to expand our advertising scenarios with diverse products and improved conversion modules. We also executed our integrated marketing campaigns as selling strategy to realize more cross-selling opportunities. The Story Mode app we launched in April have also been welcomed by our advertisers. Lastly, on games business. Net revenues was RMB 1.05 billion in the second quarter. The lack of supply for new game content in the domestic market was the main challenge in the first half of the year. As the domestic game approval process returned to normal, we look forward to seeing the approval for imported titles. Nevertheless, our game strategy remains focused on the in-house development and bringing exciting, high-quality games for both domestic and international markets. In the second quarter, our self-development game revenues contributed around 5% of total game revenue, mainly thanks to our successful launch of Artery Gear in many countries and regions. And for our pipeline. Domestically, we are actively applying for game licenses and have 4 titles approved for release. 6 games in our pipeline, including 2 self-development titles, are ready to hit overseas market in the second half of the year. As a 13-year-old company, our user numbers and revenues are still seeing robust growth, and we foresee a long runway of growth in this future. Our attention and resources are focused on improving both our top line and bottom line. With this in mind, we plan to further enhance our operational efficiency, tighten spending and strengthen our execution. We are committed to improving our gross margin and narrowing our operating loss in the second half of the year. This concludes Mr. Chen's remarks. I will now to provide a brief overview of our financial results for second quarter of 2022 and outlook for the third quarter of 2022. Total net revenues for the second quarter was RMB 4.91 billion, up 9% from the same period of 2021. Our total net revenue, broke down by revenue stream, was approximately 21% mobile games, 43% VAS, 24% advertising and 12% e-commerce and other business. Cost of revenues increased by 19% year-over-year to RMB 4.2 billion. Revenue-sharing cost, a key component of cost of revenues, was RMB 2.1 billion, representing an 18% increase from the same period in 2021. Server and bandwidth cost, as part of a relatively fixed cost component, decreased 9% quarter-over-quarter. Server and bandwidth cost per video views decreased 37% year-over-year, demonstrating the impact of ongoing efforts and progress in cost savings. Our gross profit in the second quarter was RMB 738 million, and our gross profit margin was 15%. We are actively tightening our cost control measures and improving our operating efficiency. We expect our gross profit margin will start to recover beginning this quarter. Total operating expenses was RMB 2.9 billion, up 17% from the same period in 2021. Sales and marketing expenses was RMB 1.2 billion, representing a 16% decrease year-over-year. Sales and marketing expenses as a percentage of total revenue was 24%, down from 31% in the same period last year. The year-over-year decrease was primarily attributed to decreased promotional expenses for our mobile games as well as lower user acquisition costs. G&A expenses were RMB 626 million, representing a 44% increase year-over-year. The increase was primarily due to increased headcount in general personnel, higher rental expenses and nonrecurring expenses related to optimizing our organizational structure. R&D expenses was RMB 1.1 billion, representing a 68% increase year-over-year. The increase was primarily due to increased headcount in research and development, increased share-based compensation expenses and nonrecurring expenses related to adjustment of certain game projects. Net loss and adjusted net loss was RMB 2.0 billion and RMB 1.96 billion for the second quarter of 2022, respectively. Turning to our capital allocation and liability management. In aggregate, we repurchased a total of 2.6 million ADS for a total cost of USD 53.6 million at the end of June 30, 2022. In addition, we repurchased a total of USD 275 million 2026 notes for a total cost of USD 198 million with total future cash savings of USD 84 million at the end of June 30, 2022. And as of June 30, 2022, we had cash and cash equivalent, time deposits and short-term investments of RMB 24.9 billion, compared with RMB 13.2 billion as of December 31, 2021. As for our intent to convert to a primary listing on the Main Board of Hong Kong Stock Exchange. With respect to the proposed conversion, we successfully obtained all the necessary shareholders' approval at our company's Annual General Meeting, which was held on June 30, 2022. The Hong Kong Exchange has also acknowledged our application, setting October 3, 2022, as the proposed effective day. Our endeavor will expand our access to a wider investor base, and we expect to concurrently maintain our listing status on NASDAQ. With that in mind, we are currently projecting net revenues for the third quarter of 2022 to be between RMB 5.6 billion and RMB 5.8 billion. Thank you for your attention. We would now like to open the call to your questions. Operator, please go ahead.
Operator: Our first question comes from the line of Lei Zhang from Bank of America Merrill Lynch.
Lei Zhang : My question is mainly on the margin profile. We noticed that we have taken some cost control measures in first half, especially on sales and marketing expenses. So do we see any room in other cost items? And how should we see our gross margin and net profit margin trend in the second half?
Rui Chen : Let me share some of my thoughts about cost control and efficiency improvement. We believe this slogan is not just about cost control. It's not about not to spend money, but spend our money more wisely, spend money on the right places. Under the current extremely challenging macro environment and the COVID impact that's causing business everywhere a very challenging environment. And I have been telling our employees, our business under this environment needs to be more focused. Focused means that we need to allocate our best resource to our core business to be exceedingly good at our core. And if it's noncore, we should put less effort and focus on the -- what matters the most. What's our core? Video and growth. And the growth is not just about user growth, but also our top line growth. So in the first half of this year, we have been allocating all of our resources, including our capital, into the areas that is our core, that is our video business, user growth, in areas that can help us to expand our top line. Even though it's a challenging environment -- macro environment, but I'm still emphasizing the importance of growth within the company because growth, we believe, is the most important priority within our community. Bilibili runs a very typical Internet platform business. The value of our platform really comes from our -- the value of our users. We value the user growth, but we are also emphasizing on improving the user growth efficiency and lowering the user growth cost. As you can see, we have achieved -- new user acquisition costs continue to decrease. And our sales and marketing expense decreased by 16% year-over-year in the second quarter. And sales and marketing expense as a percentage of revenue came down from 31% same period last year to 24% in the second quarter. And also at the same time, as our costs go down, our user engagement, our user retention, has continued to improve. And improving the efficiency also comes -- goes with the technology side. In this quarter, we have optimized the allocation of our technical resources and unified investment in technology, infrastructure and concentrated our resource on solving key problems. For example, in the second quarter, our DAU grew 33% year-over-year. Our video views grew 83% year-over-year. As you may aware, the resolution of our videos has become more and more premier. And we are using everything we can, and on the technology side, improving the algorithm, resulted in the unit VV cost came down by 37% year-over-year. I'm expecting, for this year, as our DAU growth significantly -- and our time spent also grow simultaneously, our total investment that the server and bandwidth cost, the overall expense, will not be exceeding last -- what we spent last year. This is a perfect example of how we use technology to improve efficiency.
Xin Fan: Okay. I will take the question about the gross profit trend. We believe our Q2 results has already reflected the impact of the COVID lockdowns. And we estimate our revenue will regain a sequential growth momentum in the second half of this year in Q3 and Q4. So our gross margin will gradually improve to around, like, let's say, 20% in Q4. And we will continue to adopt strict expense control measures, as mentioned by Chairman Chen. At the same time, so we expect our non-GAAP net loss ratio will also narrow down from around like 40% in Q2 to around 30% in Q4.
Operator: Our next question comes from the line of Daniel Chen from JPMorgan.
Daniel Chen : I will translate myself. So my question is on the user side. BILI's MAU have surpass over 300 million this quarter. And we also noticed that, in the second quarter, the DAU actually outgrows MAU, and the average time spent per user also grow quite nicely. So I was wondering, what's the driver behind? And also what's management's expectation for the DAU and MAU metrics for the second half and also in 2023?
Rui Chen: I will share 3 points. As you may all aware, there has been a significant change of macro environment globally. However, we think the fundamentals of Bilibili remain unchanged. Here are 3 points that's supporting our growth. Videolization, for a start, is a global phenomenon. And we think the videolization movement will continue for 3 years at least. And this will also support Bilibili's growth, not for just 1 year, to 2 years, 3 years, as this will continue to support us. The second thing is the young generation needs their own culture and entertainment content. We have half of our users are below 25 years old. Why they're using Bilibili? Because we are providing their own cultural and content product. Third point is the consumption upgrade is still the largest driving force within the consumption sector, and the content consumption will be a major part of it. The Z generation, the Z+ generation, are more willing to spend their money into spiritual and cultural products, cultural consumption. I believe Bilibili is on the front line of this movement. That's why these 3 points is supporting our continued sustainable growth in the future. As you mentioned, indeed, for the past 2 quarters, our DAU growth rate has outpaced the MAU growth rate. That's because we have keep emphasizing that we will focus on the quality of the growth, which means the DAU and engagement level, time spent. And not only our DAU has surpassed the MAU growth rate, our daily user time spent has also improved sequential year-over-year for many quarters. And our daily video views grew over 80% and our user engagement, multiuser engagement numbers, has also grown significantly. So this is a very healthy model that the video views and engagement outpaced the DAU, and the DAU itself outpaced the MAU, means the community has become more sticky and engaged. On top of spending our money more wisely, we believe that our business model, which is the content ecosystem-driven business model, is more healthy. As for our content categories, it has been very healthy across different verticals. Our traditionally strong anime, music, food, it's growing very healthily. We are also witnessing a lot of new category expansion. Because we have such a healthy ecosystem, you can continuously discover new content creator, very high-quality content. And we have many, many new titles that went viral. For example, the phenomenal Second Uncle PUGV has been a perfect example of how Bilibili can continuously create high-quality content. And you can discover very talented content creator on our community. And secondly is our multi-scenario, multi-content category approach, is also helping us to grow healthily. As you may see from our platform, the PUGV live broadcasting, OGV and even the newly emerged Story Mode, they are all growing very nicely. And we are actively supplementing those video scenarios that's helping our users become more engaged. Here, I wanted to lastly to -- wanted to really emphasize our MAU target, which is 400 million by end of next year. And we won't be achieving this number just for the sake of achieving a number, but we will be more focused on the quality of the user growth. As you can see, we're putting more emphasis on the DAU growth. We wanted to achieve a healthy and sustainable growth going forward. Thank you.
Operator: Next question comes from Brian Gong from Citi.
Brian Gong: I will translate myself. My question is regarding the progress on Story Mode. The viewership has shown strong growth. Can management give more colors of the positioning and the strategy of the Story Mode? And how is the progress on Story Mode, like its ecosystem and the commercialization?
Rui Chen: For the past 2 quarters, we've seen a lot of attention being placed on the Story Mode. Indeed, we have delivered a very outstanding result of how Story Mode expanding its traffic. And the reason why behind that is partially because this is from 0. We're growing this from 0. However, I wanted to emphasize here is that overall -- our overall traffic is also growing very significantly. And Story Mode is the incremental traffic add on to our total traffic. For example, if you look at the total VV, we grew by 83% year-over-year. And the PUGV video views also grew over 50% year-over-year. Our Story Mode rose 400% from a very low base. But I just wanted to emphasize, this is indeed a very nice incremental traffic growth to our ecosystem. But don't forget, our overall traffic is also growing very nicely. Here, we always talked about the strategy of growing multi-scenario, multi-content category, and Story Mode is the representation of that strategy. And Bilibili's video ecosystem is a comprehensive, full bodied, well-rounded content ecosystem that centers around PUGV. And along with live broadcasting, story and our smart TV application, all of that is a natural extension of our original PUGV ecosystem, whether it's adding a new scenario for users' fragmented time or allowing the original content creator to become live broadcasters, this comes from the original PUGV ecosystem. As for the Story Mode, we believe it's a very important supplement to our original content ecosystem. This product satisfy users' on-the-go entertainment needs for their fragmented time and satisfies users' kill-time need for a 1- or 2-minute video. Probably there's 10 times of that need will come up during the day. And combined together, it would be a certain longer period of time. And more importantly, we believe the Story Mode has been very beneficial for us to improve the engagement level of those users that are less active. Some of them might think some of the video on Bilibili is too long or is more difficult to comprehend. The launch of Story Mode is helping them to quickly adapt into the Bilibili community, to help them understand, to give them a quick start to blend into our community. Additionally, Story Mode has been very beneficiary to the newly joined content creator or the content creator with fewer followers. In the past, for them to grow their followers, they have to spend a lot of time to create high-quality, longer period of PUGV. Now we are providing there a new option to create a lighter, shorter creation. And this smaller creation comes together, will help them to grow their followers more quickly. We are also noticing that this launch of Story Mode is helping those content creators who originally are good at creating short-form videos, are providing them additional opportunity to grow and expand their influence on Bilibili. In the second quarter, we've noticed that the number of content creators who achieved 1 million followers, 60% of them will benefit from the traffic growth of Story Mode. Lastly, I wanted to emphasize that even though it's a shorter, vertical video, but if you browse through the content, you can tell immediately this is Bilibili featured, high-quality video. The algorithm, the recommendation system behind the Story Mode, is identical to the PUGV algorithms. We put same amount of weighting and emphasize the content quality and users' positive feedback towards the content. And additionally, our users are very inclined to engage within the Story Mode. From -- the data shows that the user who cast light in the Story Mode has been significantly higher than the Story Mode total percentage of revenue. That means that our users are recognizing the quality of the Story Mode videos. I believe, in the future, they will be definitely very typical and very popular Story Mode video born and went viral in the space, and there will also be original Bilibili Story Mode video content creator emerging. And we are already noticing that. For example, the content creator named , would be a perfect example for the Story Mode typical high-quality content creator.
Operator: Next question comes from Xueqing Zhang from CICC.
Xueqing Zhang: And I will translate myself. And my question relates to advertising. Given the macro headwinds and the resurgence of COVID-19, what measures do we take to make the advertising business grow? And how does management think about the trend of the advertising scene in the second half of the year? Also a follow-up question on Story Mode. We have launched advertising. How much utilization in Story Mode since April? So could you share more details about it?
Ni Li : A combination of global macro economic challenges and repeated COVID outbreaks in China are not only causing significant impact on our advertising industry in the short term, but also will be a lasting impact in the next 1 to 2 years. We've noticed that the budgeting is shrinking, advertisers have become more conscious when thinking about investing in brand advertising. And emerging industries are also struggling. So all of these factors are actually the status quo. At the same time, we've also noticed that the platform with high user value and high conversion efficiencies will stand out. However, it will still be tougher to do business, especially in ad business, if we are comparing to 2021 or prior years. Within this challenging macro environment for Bilibili's ad business in the second quarter, we grew our business 10% year-over-year. We are one of very few names that achieved year-on-year growth in the advertising sector and also achieved a market share gain. What we'll do to cope with this change, we believe in every crisis lies great opportunity. In cope of the current challenges and opportunities, we raised our strategy for the next 3 years, which is growth-centered; community-prioritized; and content ecosystem plus commercialization, dual-engine powered. This is the first time we're putting commercialization and community ecosystem at an equally important position. We have completely integrated the live broadcasting and video community on the organizational structure level and achieved live broadcasting plus video all in one structure. This helped us to create a closed loop ad in multi-scenarios. At the same time, we further integrate our commercialization system with our content ecosystem. Namely, we created two middle platforms, plus two business center structure. The two middle platforms, two business center. One is a large middle platform serving all commercialization efforts with the goal of improving traffic-linked monetization efficiency. This will be the infrastructure of our ad business and will also empower many income business segments. Another one is a smaller middle platform. Its main purpose is to serve and help our content creator to increase their earning power and improve their overall earning experience. And the two products will be, investors are familiar, Sparkle ad platform and the live video e-commerce product. And above mentioned adjustment will help our team bond together on a strategic thinking and execution level to create barrier-free self-reinforcing and positive cycle that stimulates our content ecosystem, user growth and business growth. Our advertising methods will be further iterated in the second half of this year, but the two following things will remain unchanged. One is focused on the infrastructure. Strengthen this construction of our algorithm and data power, optimizing -- optimize the realization of different scenarios and help improve efficiency of our products. We'll also look to build a scientific marketing system that's based on data construction. And the second thing remains unchanged, is to provide a well-rounded one-stop solutions for industry verticals, such as games, e-commerce, FMCG and automotive industries and et cetera. So that's the key accounts and industry -- different industry budgets we can fully absorb. To see the trend for the second half revenue trajectories, we do expect that the overall app grossing will grow about 20% year-over-year in the third quarter, thanks to the ad efficiency improvement and the iteration of our integrated marketing solutions. And for the second half of this year, we do notice that the budget from brand advertisers remain largely uncertain due to the macro environment. However, our multi-scenario ad approaches, including the Story Mode ad, transaction-based ads, will help us to gain new market share. In Q3, we are looking to further open our ecosystem with our industry partners. We have already established initial partnerships with e-commerce platform, like Taobao, Tmall, Jingdong, Pinduduo. And we'll make active trial in models like making sales recommendation in our native ads and context transaction execution. Going forward, we'll also conduct various collaboration with brand advertisers and consumer goods players. In the short term, we can -- we believe we can achieve revenue growth driven by products like and . In the mid- to longer term, the above-mentioned collaboration will help us to establish a commercial environment and build user consumption behavior we believe we want it to. This can help us to create an ever-growing commercialization environment within our ever-growing content ecosystem. From an industry perspective, we will remain our edge in leading verticals, such as games, 3C and digital products, food and beverage, skin care and cosmetics. Among which, we believe we have standout in the mobile games, automotive and digital products. We've seen that in the first half of this year, our mobile games -- ad revenue from mobile games sector grow near 90% year-over-year, and ad revenue from automotive industry grew over 110% year-over-year.
Rui Chen: You mentioned about the Story Mode. Indeed, it's a new ad scenario, and it's incremental traffic growth for our company. And we've also witnessed that the eCPM for Story Mode ads is also much higher compared to the traditional text and picture-based ads. This will help us to grow our advertising revenue in the short term. But if we look at a longer period of time, from 2023 to 2024, '25, the ad business growth will largely depend on our ability to build a well-rounded ecosystem that's ecosystem-based, industrialized, integrated marketing solution. Under the current challenging macro environment, we still hope and believe our ad revenue growth can be as healthy and as sustainable as our user and community growth. We are also confident to deliver and achieve win-win situation with our business partners. Thank you.
Operator: Thank you. And that concludes the question-and-answer session. I'd now like to turn the conference back to management for any additional or closing comments.
Juliet Yang : Thank you once again for joining us today. If you have further questions, please contact me, Juliet Yang, Bilibili Executive IR Director, or TPG Investor Relations. Our contact information for IR, both in China and in the U.S., can be found in today's press release. Okay. Thank you.
Operator: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.
