Good day and welcome to the Bilibili 2021, Third Quarter 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..

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 measures we provide are for comparison purpose only.

Definition of this measures and our reconciliation table are available in the news release we issued earlier today. 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.

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. Xin 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..

Thank you, Juliet. Thank you everyone for participating in our 2021 Third Quarter Results Conference Call. I'm pleased to deliver today the opening remarks on behalf of Mr. Chen. Our strong third quarter results, once again, demonstrate our ability to execute and deliver our growth strategy in our peak summer season.

We added over 13 million MAU to our Bilibili community, bringing our total MAUs to 257 million, up 35% year-over-year. Mobile MAUs also rose to 250 million and the DAU coming at 72 million, representing growth of 36% and the 35% respectively, both on a year-over-year basis.

This solid growth makes us more confident than ever that we can reach our MAU growth target by 2023. Importantly, our community is becoming more engaged and even bigger. Expanded the video content across formats as new reels drove an increase in user's daily time spent on Bilibili, which reached 88 minutes in Q3.

The highest we have ever seen in our operating history. This is particularly impressive and really shows the quality of our old and new users, given how fast we have grown. Other key operating metrics also grew successfully. Daily video views were up 77% to $2.3 billion.

Monthly interactions were up 86% to $10 billion, and the monthly video submissions were up 18% to $10 million. Each of these measures represents all-time high and reflects the health of our community, as well as the strength of the engine that powers our growth.

Our efforts to grow our user base while maintaining a strong and tight needs community also had a very positive impact on our commercialization program. Total revenues in Q3 reached $5.2 billion, up 51% year-over-year.

Beating the high end of our previous guidance, and matching the right content to our growing number of Bilibili users, more traffic was converted to paying users. MPUs reached 24 million in the third quarter, up 59% year-on-year and now our paying ratio grow to 8.9%. Another factor driving our topline is our increasing appeal to business partners.

And this is particularly true for advertisers who are eager to gain visibility with the growing number of JNB Plus users on our platform. To reach an even broader number of users last year, we redefined our brand position with the face or the videos you like.

Today, more users recognize and view Bilibili as the go-to-destination for high-quality video content in recent report. Bilibili was ranked as the number 2 most valuable brand name in China in terms of growth rate.

With increasing recognition from advertisers across different industry verticals, our ad revenue grew by a 110% year-on-year in the third quarter, even with microeconomic challenges. Looking ahead, visualization trends continue to surge rapidly emerging as the preferred and the new norm.

As a premium video platform with broad content and community appeal, we expect to see continued benefit from increasing visualization movement. Carrying out our solid strategy to expand our content, community, and commercialization, we believe we are on the right path to becoming a valuable new gateway to the Internet.

We have also strengthened our commitment to social responsibility. Using our PowerPlus influence, we are further developing an inclusive community, promoting positive content and interacting better ESG practice. With that overview, I will now like to walk you through some details of our third quarter operations.

I will begin with the first part of our 3D model, our content. The key 12 user growth lie with our growth unmatched PUGV. At the center of our video ecosystem, PUGV continued to flourish, accounting for 93% of our video views in the third quarter.

We have capitally created an extensive platform for high-quality content creators to be recognized, appreciated, and valued. We continue to improve our tool kits and services to lower barriers of creation, including our involving video editing app, Bijian, as well as various creator support programs.

In the third quarter, monthly video submission hit a milestone of 10 million, up 80% year-over-year. The number of monthly active content creators also accelerated to 2.7 million, up 61% year-on-year. With our continuous efforts to improve our traffic distribution mechanism content creators can and attract fans more easily.

In the first quarter, content creators with more than 10,000 followers grew by 42% year-over-year. We continue to optimize and create new venues for them to realize their commercial value.

These include our advertising managing platform, Sparkle, and the live broadcasting platform, bringing more commercialization opportunities to content creators at all levels. Our ongoing cash incentive program is also motivating in an increasing number of mid - layer creator, encouraging their continuous content creation.

By the end of the third quarter, 481,000 creators have benefited from these platforms. Bilibili is a home to sell our interest-based content category. And we are excited by our roadmap to keep building great new content experience for our users.

In the third quarter, the top 5 populate PUGV categories of lifestyle, game, entertainment, ACG, and the knowledge continued to flourish. And we will welcome the more users across various demographics as emerging verticals, such as fitness, food, and then travel, are also gaining increasing interest.

In addition to expanding content categories, we are also expanding our content formats to meet the use of different needs. For example, story mode is short-form video content in our mobile air offers quick on-the-go entertainment, which is designed to.

Conversely, our Bilibili app on smart TV is the perfect solution for users seeking a high-quality, high-resolution, immersive video experience on largest way. We are encouraged by the strong momentum in user growth and engagement, and believe there's still a lot of room to grow ahead.

For our OGV department, our OGV content reinforces our leading PUGV verticals and introduces new worlds to broaden our reach and our community Leveraging both our platform and production capability, our OGV s are helping drive created-in - China content.

For example, Chinese enemy can breathe new life into classic tales, helping Chinese culture resonate with young generation.

In the second half of this year, we released multiple Bilibili produced enemy titles, including the second season of Reborn, 100 Monsters as The Daily lives of the immortal King f which were immediately revealed by anime lover. Similarly, all documentaries and the relative shows are occurring weaving areas of young Chinese interest.

These have achieved great success in promoting the Bilibili brand and building influence within these counter verticals. Our self-produced matchmaking heat, that deeply, recently, with our Gen Z plus users and has even less to discussion beyond the Bilibili community, trending on social media platforms for weeks.

We also released a music show in Q3. This show supplements our newer music content creations and appeals to music lovers in our community. In addition, we launched our or self-produced, widely welcome the full scene documentaries with more to come.

Including the upcoming season of the , which reflects the growing interest in Chinese cuisine, as well as our lifestyle categories. Turning to our community, our community shows the quality of our user growth. In the third quarter, daily video views increased by 77% year-over-year to $2.3 billion.

And the monthly interactions were up 86% reaching over 10 billion. Both matrices grow much faster than expected, and our users showed increasing engagement across our community. These interactions are essential elements that make Bilibili experience so unique.

At the same time, we are excited to see more casual users converting to official members by taking our unique community entrance exam. By the end of the third quarter, we grew the number of official members by 38% year-on-year to 133.6 million. For this co-user cohort, the 12 months retention rates remained at above 80% in the third quarter.

once again, showing the strength of our community. Now, let's look at our commercialization progress. Our diverse revenue streams have become more and more balanced, while revenue from each of our segments grew in the third quarter. Our advertising revenues have become our largest growth engine, followed by our vast and e-commerce offerings.

Let's look at these in more detail. Within our commercial live vision segments starting with our game. We see game as an advanced format of entertainment and as representation of culture, soft power.

Believing a positive power of group games, our goal is to bring you the more high-quality games growth domestically and internationally with a heightened focus on internal development.

Leveraging our deep understanding of user preference and our rich game operating experience, we have devoted to building our development capabilities for the new generation of players. At the same time, we are adamant from promoting exciting Chinese culture to the large gaming world.

Looking for , as our third quarter game performance, revenue from our mobile games increased by 9% year-over-year to RMB 1.4 billion. We added 3 new titles domestically to our roster of the exclusive licensed games all have been well received by their followers. We also celebrated the fifth-year anniversary of our legacy title FGO in September.

Additionally, we're successful in jointed publish more premium games, including Tencent, League of Legend, and the Netease, Harry Potter. Continuing to expand game offering in genre. And for our domestic game pipeline, games have acquired approval and are ready for domestic release in the coming quarter.

In the meantime, we are rolling out more Chinese game masterpiece to global game market. Following our success of deal, we continue to build our distribution capabilities with the successfully launched our biggest story down the shore platform in South Korea in September.

The game became an instant hit and we plan to replicate this success with more games overseas by leveraging our deep understanding of ACG lovers ' taste, our game selection know-how, and our strong distribution power. We are committed to operating responsibly to promote healthy game behavior, and protecting ages from gaming addiction.

As early as 2019, we launched the anti-addition measures for team players and have continued to strengthen control mechanisms. By the end of August, all Bilibili operating games, fully compelled with the latest regulation on restriction minor game playtime in China.

We will also like to note that revenues from players under 18 accounted for less than 1% of game revenues in September of 2021. Turning to our VAS business, our VAS business is the perfect illustration of our business to consumer B2C model. It represents our users trust in our brand and the willingness to pay for Bilibili content and services.

In the third quarter, our VAS business continues to be our largest earner, reaching RMB 1.9 billion, up 95% year-over-year. Unlike any other live broadcasting platform, Bilibili live broadcasting have been uniquely integrated with our content ecosystem from day 1.

As a natural extension of video content, it amplifies our leading content verticals, as well as the influence of our content creator. We continue to enrich our live broadcasting content during the period, providing more tools to facilitate our virtual host growth.

We're excited to see the increasing influence of various game live content from our community, including League of Legends, Honor of Kings, and Genshin Impact. For example, with our record-breaking level of popularity for this year's League of Legends World Championship at the 11th on Bilibili.

On the final game night, the peak concurrent viewers increased by over a 160% compared with S10 and that we achieved the highest DAU ever in our operating history. We are also diversifying within more entertainment-related offerings. Essentially for virtual uploader of V-Art related content.

In Q3, we had tripled digital year-over-year growth in both number of active V-Art and number of viewers in this category. We will continue to add and expand and strengthen our position as the world's leading virtual community.

Sent to our growing roaster of high quality OGV, as the user’s tendency to pay for content, our premium member growth to RMB 18.2 million by the end of third quarter, an increase of 42% year-over-year. For ACG , our comic, and all the drama content continued to attract more paying users.

Again, showing the high willingness of our users to pay for content they want. And the vast potential that offers and we had exciting new content. As far as advertising services of a tightening represents our business-to-business B2B model and is also serving.

Despite macroeconomics side, our advertising revenue continued to be robust in the third quarter, reaching total advertising revenues of RMB 1.2 billion, an increase of 110% year-over-year. Our enhanced great influence and our growing number of quality user function has the building growth of September growth.

As our integrated marketing campaign covers more industry customers, the creativity, and the commercial value of our content creators is gaining wider recognition. More native ad videos in Q3, making Bilibili the most sought-after platform in China for advertisers.

We continue to promote our integrated marketing campaign and introduce more ad products to our inventory, helping our content creator monetize their talent. During the third quarter, our top 5 advertising verticals, while mobile games, skin care, and the cosmetics, e-commerce, digital products, and the food and beverage.

As we move forward, we will continue to evolve our growth strategy and create value for our stakeholders. At the same time, we're committed to shouldering our social responsibility to make the world a better place. Including supporting blue whale education, disaster relief, reducing our carbon footprint, and furthering green initiatives.

Moreover, as a proud Chinese corporate with increasing reach, we dream that one day new art form such as games, anime, and PUGV, we will able to spread Chinese culture across the world. This concludes Mr. Chen's trends remarks.

I will now provide a brief overview of our financial results for third quarter of 2021 and the outlook for the fourth quarter. Total net revenues for third quarter were RMB 5.2 billion, up 61% from the same period of 2020. We continue to see a more balance revenue mix driven by our diversified commercialization channels.

Our total net revenues were down, our revenue stream was approximately 27% in mobile games, 37% VAS, 23% advertising, and the 13% e-commerce and other business. Cost of revenues increased by 70% year-over-year to RMB 4.2 billion.

Revenue sharing costs, a key component of cost of revenues were RMB 2.2 billion, representing 83% increase from the same period in 2020. Gross profit increased by 34% year-over-year to RMB 1 billion. And our gross margin was 19.6% in the third quarter. Total operating expenses was RMB 2.9 billion, up 57% from the same period in 2020.

Selling and marketing expenses was RMB 1.6 billion, representing a 37% increase year-over-year. The increase was primarily attributable to increased channel and marketing expenses to promote our app and breadth, as well as promotional expenses for mobile games and the increase in our head count in sales and marketing personnel.

Q3 is our peak season in brand marketing and user acquisition efforts. We strategically allocated more resources and are pleased with the strong momentum showing both user growth, base growth, as well as the quality of our users in terms of engagement levels. G&A expenses was RMB 474.9 million representing an 87% increase year-over-year.

The increase was permanent due to increased headcount in general and administrative personnel increased share-based compensation expenses and higher rental expenses. R&D expenses were RMB 788.3 million representing a 97% increase year-over-year.

The increase was primarily due to increased headcount in research and development personnel and increased share-based compensation expenses. Net loss was RMB 2.69 billion for the third quarter of 2021, compared with RMB 1.1 billion in the same period of 2020.

Adjusted net loss, which a non-GAAP measure that excludes share-based compensation expenses, amortization expense in relation to intangible assets acquired through business acquisitions, income tax relates to intangible assets acquired to our business acquisition, and the loss of fair value change in public trade Company was RMB 1.62 billion compared with RMB 0.97 bidding in the same period of 2020.

Basic and diluted net loss per share were each RMB 6.90. Adjusted basic and diluted net loss per share were each RMB 4.16. As of September 13, 2021, we had a cash of cash equivalents from deposit as well as short-term investments of RMB 24.4 billion compared with RMB 12.8 billion as of December 31, 2020.

Our sufficient cash reserves give us great confidence in our ability to execute our growth strategy, which we believe will yield profitable return in the loan growth. With that in mind, we are currently projecting net revenues for the fourth quarter of 2021 to grow RMB 5.7 BILI and RMB 5.8 BILI. Thank you for your attention.

We will like now to open the call to questions. Operator, please go ahead..

For the benefit of all participants on today's call, if you wish to ask a question to management in Chinese, please immediately repeat your question in English. Please limit your question to one at a time. If your wish to have follow-up questions, please rejoin the queue. Please stand by while we compound.

first questions come from the line of Q - Alex Poon from Morgan Stanley. Please go ahead..

My first question is regarding user growth. The user growth in Q3 has exceeded previous guidance of RMB 260 million. And also, the record -- the time spend has reached a record high of 88 minutes per user per day.

I wonder if management can explain; What have we done in Q3 to achieve these results? And in Q4 and next year, what are our expectations? Thank you very much..

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So, for all these years, principal for Bilibili to grow our user has remained the same, which is driven by our very healthy content ecosystem. And those content ecosystem will continuously produce high quality content to attract users..

Poon Poon.

Every year we'll have evolved and precise to area. For example, last year, it was all about expansion and content categories. And for this year beside expansion of content categories, we also hope to achieve expansion of consumption scenarios, building a multi-use scenario, multi-content category, video community is our goal.

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I have always thought that video's main battlefield is beyond just mobile phones. Although nowadays mobile phone is the main consumption scenario. However, I think as the technology evolve in such as 5G adoption and the overall hardware's evolvement, in the future, more and more screen will carry the purpose of running a video.

For example, on a larger screen..

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So right now, our OTT smart TVs MAU has surpassed our MAUs on the PC side becoming our number 2 user component. And I still think there's plenty of room for to and in those areas..

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So not only that we have more users on the smart TV side. Actually, the time spend on the smart TV is also much longer than the rest of the -- the rest of the terminals.

t Yang Bilibili probably has the greatest number of video status in 4K. And that is also the reason why Bilibili 's content is most suitable for the screens..

t Yang Another example would be our story mode. Within the story mode, our content creator can upload video stats in the horizontal mode, which was also well-loved by our users. And within the scenario, our user could enjoy those quakes on entertainment content. .

Here, I wanted to point now that in the third quarter, we not only have a fast-growing number of user base. The quality of those users is also very, very good. For example, the time spend 88 minutes is the highest we've seen in our operation history. And also, the user engagement number also experienced very fast growth.

All of those indicate that we have grown with quality. That's very important..

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Our monthly user interactions -- average monthly user interaction in Q3 has reached 10 billion milestone..

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And also, on the paying conversion in Q3, our paying user reached 24 million and our paying ratio continues to rise, reaching 8.9% in the third quarter..

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Back in 2017, I predicted that Bilibili 's paying ratio could reach double-digit, and I still believe that. Even though our users growing extremely fast, the quality of the user is also extremely high. Those users love our content and are very willing to pay for this content.

We believe that in the end of the day, our -- revenue generated from our users will be faster than the increase of our users’ number..

preter As for Q4's outlook,.

similar with our traditional seasonality, we expect Q4 seizures space to be stable or a slight increase. As for our user target for 2022 we raised our three-year MAU target of 400 million users by 2023. And for next year, we will continue to execute on that strategy and to -- step-by-step achieving that target.

And we're still very, very confident to be able to achieve that user goal by 2023..

t Yang 1 thing I would like to add is about our smart TV users. And originally, we thought this TV user versus our app user would have relatively higher overlap. As a matter of fact, to the overlap is only about 20 %. And lot of the Smart TV users, are users coming from third quarter of this city.

So, this instance gives us great confidence in terms of further penetrating our target cohort, and we believe with Bilibili's vast content library and the evolving scenario, we should be able to achieve our user target..

Thank you. Our next question comes from Daniel Chen from JP Morgan. Please go ahead..

I was translating myself. My question is related to advertising, so we have seen such a strong growth in the third quarter, our triple-digit year-over-year growth.

So, what's our expectation into the fourth quarter of this year and also 2020? And also, are we seeing the impact from a weak macro environment and also data security policies? Are we seeing those implications to our advertising revenue? Thank you..

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In Q3, our ad revenue reached RMB 1.17 billion, up over 110% year-on-year. This is the 10th executive quarter of beating expectation level of growth..

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So, we have repeatedly discussed the theory of Bilibili, our business logic, and our efforts in building our infrastructures as well as strategies in the past few quarters, which I will not going further details at this time. However, I will share some of the data and new changes we've seen so far in the fourth quarter and also in the third quarter..

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First of all, we see continuous improvement in our ad efficiency thanks to our deep learning model’s involvement, as well as the further adoption of more innovative app scenarios. The click-through rate of our feet improved by 30% and we expect this will further our fourth quarter and next year add revenue growth..

t Yang Second is we further integrated multiple app scenarios, as we have mentioned, from our mobile app, on our mobile phones, to iPad, smart TV, and PC. We continue to add new ad inventory, including ad products like inline stories and moments. And as our user continues to expand, our ad can follow..

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The third point is on Sparkle ad platform, we have over 150,000 content creators joined, this is up 25% year-on-year. And we also have repeated repetitive ad customers over 75 %, and Bilibili's content creator produced more and more highly creative native Ad content and it's becoming the new beacon in China Ad market.

and we'll continue to build on that success and further to integrate on 1-stop solution of native ads, brand-outs, feed-outs, including our project takeoff, which all have been widely acknowledge in the added industry..

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And the fourth point is during this year's Singles ' Day, our daily add GMV was over RMB 25 million, ranking number 5 in terms of ad budget market share, and overall conversion ROI ranked number 1 in the space. This further proves the high quality of our user and their potential consumption power.

We expect next year in the overall, our consuming advertising -- consumers at the industry will continue to raise our performances and achieve greater success..

t Yang And the fifth and the sixth point is -- first of all, on our Ad clients, besides our traditional strong vertical like game, food and beverage,.

, skincare, and cosmetics. We see emerging growth vertically, such as automotive, handbag and apparel are also growing rapidly. Last but not least, is on our -- we see new format of video-based Ad has also driving the improvement of our Ad efficiency and forming one-stop absolution on Bilibili.

Our Q3 number shows that video-based Ad is 2 times more efficient than the traditional picture and tax-based Ads. And we expect the ECPS will have the potential to further grow by a 100 %.

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The lastly feed on whether there's going to be impact of the recent data security regulations We still think there will be any visible impact to our app business. And we still have confidence to deliver our house the ad fast-growth in our ads segment in Q4 and in next year..

Thank you. The next question comes from the line of Brian Gong from Citi. Please go ahead..

I will translate myself. Our ecosystem, our streaming video loves screening, and actually, we already have our virtual community. BILI seems to be among those few platforms in China that explored at a worst opportunity.

So, my question is that how those measurements see BILI 's positioning in these things, and how will BILI to seize this opportunity? Thank you..

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As I mentioned in an investor conference earlier this year, metaverse is a concept. It's not a product. And before this concept emerged, actually many of the elements associated with Metaverse already existed. Whether it is virtual reality, a tight social community, or a system -- a social system, or self-reinforcing ecosystem.

It's already existed and there are a lot of Company is already -- developing products on those concepts. For example, Facebook and Tencent. And actually, Bilibili is one of them..

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So that's why I think that if someone hears the concept of Metaverse and decided to get into this business, probably would be a little bit too late. That is because those elements such as social system, self-reinforcing ecosystem, all of which cannot be done in a couple of months or even years..

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And I believe there is a very, very important element within the Metaverse concept, which is a self-reinforcing content ecosystem. When we talk about Metaverse, we think this is not something that can be done by a singular Company. You need to have massive content production capability to produce another world.

So that's why we believe it requires someone deeply connected into this system, and through creating content they will achieve benefit hence, bonding tighter -- even tighter within the system itself..

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And Bilibili has a very large base of content creator are creating content in Bilibili system. And they are benefiting from this creation process. That makes Bilibili the ideal platform to further explore in this Metaverse concept. Actually, this is something Bilibili has always been practicing and believed in.

And we have many examples that link to this concept for example, virtual off-loader. Our content creator can leverage technology like motion capture, virtuality, augmented reality. Turning themselves into another character in another world and creating content such as singing and dancing, talking jokes.

All of that attracting user and make user fall in love with them. And itself, it is a perfect example of implementing the creation system into this Metaverse concept..

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When we're talking about metaverse; Independent, separate universe that attracting hundreds of millions of users who are getting attached to this. It requires way more than what we have. Now, those content creators to continuously create content and keep them attracted.

And that's the exact reason why we believe the Metaverse requires a self-reinforcing, deep content-creation ecosystem..

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And Bilibili has a very outstanding and healthy content creation ecosystem. And surrounding that ecosystem, we have already attracted a tight community of over 267 million.

267 million MAUs. And within that 267 MAUs, a vast majority are the most creative, most energetic young Chinese. So that's why I do think Bilibili is probably one of the best companies to practice or to get into the Metaverse business..

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However, I do think Metaverse is the concept in a long-time horizon. And it's also a future objective with -- must heard a lot of discussion about Metaverse but I think it's mostly on a capital level or on the media level. I barely heard anything on the product level, because it does require breakthrough in product and technologies.

So that's why I do think this is still far ahead, but it's the future..

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I do believe this is a very, very beautiful vision in the future which brings elevated user experience. The scenes that we seeing in the movie Ready Player One, or in the anime sort out online. This Metaverse concept does bring a very beautiful experience to users..

an.

I read a recent report -- media report criticizing Metaverse, using examples like movie Ready Player One. However, I disagree. I believe technology is tool. It's the person that matters to make this tool to be beneficial to the society or make bad influence on the society. And Metaverse represents a new choice, not a replacement of the existing reality.

It's always good to have additional choice, such as the invention of television and the invention of mobile phones. It provides alternative for you to choose not to replace the old thing. And I recently visited Shanghai Auditorium that has the space.

museum. And actually, a lot of the scene that in the museum can be achieved in a much greater effect in virtual reality or in the Metaverse.

Let's imagine all those things that you're seeing in an auditorium and in the museum can be spread in the internet, allowing all the children, all the kids in China to physically see, get a touch of how the sun is looking like, how the is looking like. So, I believe that we will bring great benefit to the society.

It really depends on the people itself..

Thank you. The next question comes from the line of Lei Zhang from Bank of America, Q - Lei Zhang, please go ahead..

Thanks management for taking my question. My question is mainly regarding live-streaming business. Notice that we have a good performance in elaborate recently. So, looking forward, how should we look at your live-streaming business, especially in content and monetization strategy? Thank you..

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Indeed, for this year's S11, on the final game night, we have record high peak concurrent user. And our platform's DAU also reached record high in our operating history.

I discussed this with our internal team and we are predicting that as Bilibili 's S11 final game night has probably the highest concurrent user in China 's internet live broadcasting history..

Poon.

At the same time, I wanted to emphasize that the S11 is not a 1-way content output. Actually, during the S11, we have massive live broadcasting hosts. It's doing as game-related live broadcasting. We also have tons of content creator s, creating derivative content associated with S11.

For those videos alone we have a total video play of 2.8 billion times. And all these data points support the argument that Bilibili's live.

broadcasting is a natural extension of our video community. And it is for -- it is forming a self-reinforcing ecosystem or a positive feedback loop within our community..

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And years ago, investors would ask me why Bilibili would do live broadcasting. My answer was live broadcasting is not content vertical, rather, a capability, and for Bilibili is an important component of our content ecosystem..

With us without S11, our live broadcasting has already deeply embedded into our video communities. For example, we see tons of knowledge, lifestyle, and entertainment-related live broadcasting, provided by our content creators. And we believe this has really integrated in our community.

And live broadcasting on Bilibili is spreading its wings and making multiple times of influence and impact to our content community..

an.

Again, that -- I think Bilibili's live broadcasting is actually breaking a lot of people's stereotypes about live broadcasting. While in the past, when people start thinking about live broadcasting it is showroom for eSports.

However, for Bilibili's live broadcasting, our content category covers a wide array of vertical is basically what content verticals we have on the video platform, we have it on live broadcasting. And most importantly, we are forcing layers of positive feedback loop in terms of content verticals and as well as our content creators.

For example, our content creator in games, they can also do games-related live broadcasting. And we're also helping our content creator to expand their content creations category. For example, there's content -- there's a food content creator who is also very good at playing games.

He is actually ranked in the top, a live broadcasting host in Genshin Impact content creator. And most importantly, I do believe that live broadcasting is a very healthy mechanism to help our content creator to make money.

For example, to charge people from watching videos, it's kind of not not positive feedback it's probably not the best monetization method.

But if you love a content creator so much, you would be very willing to watching his live broadcasting, buying his recommendation product, or just simply tip him to showcase your appreciation and that's also in the exact we using that we believe that live broadcasting is a very important component within Bilibili's community.

and the chemistry that is playing in the community is creating very benefit -- has very large benefit to all the participants..

t Yang And as we look ahead,.

we will continue to implement our content ecosystem driven business model, will continue to integrate live broadcasting with our video business, will continue to penetrate the -- to user groups, content creator, and live broadcasting host. And also, we do believe that all the user could have potentially become live broadcasting users.

Secondly, as that would really to discover and develop Bilibili's unique live broadcasting category. And one of the reasons that our video platform is so successful is that we have our own unique content category, such as auto tune remix and knowledge sector. Those content verticals have Bilibili's unique taste to it.

And so, as what we planned for our live broadcasting business, we want to develop our own unique content categories that has Bilibili's flavor to it..

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

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