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Bilibili (BILI) likely to post steeper losses in Q3 on Nov 18

Bilibili Inc. (NASDAQ: BILI) is heading to release its third-quarter earnings results on Monday, November 18, after the market closes. The bottom line will be hurt by its decision to invest in mobile active users growth as well as costs and expenses associated with the investments.

The top line will be driven by advertising and other services as well as live broadcasting. However, mobile game revenue will be weighed by the lack of new games. The margins are likely to be hit by the company’s current investments user acquisition. Meanwhile, there remained an unclear picture for the future monetization of new users.

earnings preview

The continued investments in content, talent, technology, and other initiatives could widen the losses. Also, the company could incur higher costs in order to provide users with interesting and useful content as well as increase the level of user engagement. The company continues to depend on online entertainment content to strengthen its business performance.

The expansion of the 5G network in China could aid in developing new entertainment products and services for the market. The competition in the Chinese mobile games market is getting stiff and Bilibili could turn beneficial after the partnership with Tencent or NetEase due to their dominance in the market.

Analysts expect the company to report a loss of $0.14 per share on revenue of $248.77 million for the third quarter. In comparison, during the previous year quarter, Bilibili posted a loss of $0.11 per share on revenue of $150.28 million. The company has surprised investors by beating analysts’ expectations thrice in the past four quarters.

Read: Fiverr Q3 earnings review

For the second quarter, Bilibili reported a wider loss due to higher costs and expenses but the bottom line was narrower than the analysts’ expectations. Revenues jumped by 50% driven by a 16% growth in mobile games revenue. Monthly active users grew by 30% to 110.4 million and mobile MAUs increased by 35% to 96.2 million.

For the third quarter, the company expects net revenues in the range of RMB1.74 billion to RMB1.77 billion. The company continues to focus on obtaining high-quality growth while securing adequate return on investments.

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