Bilibili - $BILI - Earnings Analysis: Achievement of first quarter of GAAP profitability.
Business Model
Bilibili generates revenue through value-added services (VAS), advertising, mobile games, and IP derivatives and others.
Revenue Sources
- Value-added services (VAS): Includes revenues from live broadcasting, premium membership, and other value-added services.
- Advertising: Revenues from advertising services offered on the platform.
- Mobile games: Revenues from mobile games, including exclusively licensed games.
- IP derivatives and others: Revenues from IP derivatives and other sources.
Income Statement Analysis
- Total net revenues increased by 5.87% from Q3 2024 to Q4 2024, driven by growth in VAS, advertising, and mobile games revenues.
- Gross profit increased by 9.46% from Q3 2024 to Q4 2024, indicating improved monetization efficiency.
- Bilibili achieved profitability in Q4 2024 with a net profit of RMB88.93 million, compared to a net loss of RMB79.81 million in Q3 2024.
- Operating expenses slightly increased by 1.83% from Q3 2024 to Q4 2024.
Balance Sheet Analysis
- Cash and cash equivalents increased significantly by 42.51% from the end of 2023 to the end of 2024, indicating improved liquidity.
- Total assets decreased slightly by 1.39% from the end of 2023 to the end of 2024.
- Total liabilities decreased slightly by 0.86% from the end of 2023 to the end of 2024.
- Total stockholders' equity decreased slightly by 2.08% from the end of 2023 to the end of 2024.
- Total Liabilities was derived by subtracting Total Stockholders' Equity from Total Assets. The change shows a slight decrease, correlating with a similar reduction in Total Assets
Cash Flow Analysis
- Net cash provided by operating activities increased significantly by 118.77% from Q4 2023 to Q4 2024, indicating improved operational efficiency and cash generation.
Capital Allocation
Bilibili is allocating capital towards share repurchases and repurchase of convertible senior notes to enhance shareholder returns. The company announced a share repurchase program of up to US$200 million and repurchased a total of approximately 0.84 million ADSs under this program for a total cost of US$16.4 million as of December 31, 2024. They also completed the repurchase of US$419.1 million of December 2026 Notes.
Management Commentary
We closed 2024 on a strong note, achieving our first quarter of GAAP profitability—a milestone reflecting the value of our community and our relentless effort to enhance our commercialization efficiency.
Strong growth in our high-margin advertising and mobile games businesses drove total net revenues up by 22% year over year in the fourth quarter.
We are also very encouraged by the emergence of new open-source AI models, making AI solutions accessible and cost-effective.
Overall Sentiment: Positive, reflecting confidence in the company's community, commercialization efforts, and the potential of AI to drive future growth.
Disclaimer: This report is for informational purposes only and not investment advice. The analysis is based on limited information and subject to change. Investing in securities involves risks, including potential loss of principal. Past performance doesn't guarantee future results. Always conduct your own research, understand the risks, and consult a financial professional before making investment decisions.