Bilibili Inc (NASDAQ: BILI) Q4 2022 earnings call dated Mar. 02, 2023
Corporate Participants:
Juliet Yang — Investor Contact
Sam Fan — Chief Financial Officer
Rui Chen — Chairman and Chief Executive Officer
Carly Lee — Vice Chairwoman and Chief Operating Officer
Analysts:
Daniel Chen — JP Morgan — Analyst
Xueqing Zhang — CICC — Analyst
Yiwen Zhang — China Renaissance — Analyst
Lei Zhang — Bank of America Merrill Lynch — Analyst
Presentation:
Operator
Good day, and welcome to Bilibili Fourth Quarter and Fiscal Year 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. Please go ahead.
Juliet Yang — Investor Contact
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 the SEC and Hong Kong Stock Exchange. The non-GAAP financial measures 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 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’s 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.
And I now turn the call over to Mr. Fan who will read the prepared remarks on behalf of Mr. Chen.
Sam Fan — Chief Financial Officer
Thank you, Juliet, and thank you everyone for participating in our 2022 fourth quarter and fiscal year financial and operating results conference call. I’m pleased to deliver today’s opening remarks on behalf of Mr. Chen.
In 2022, we proactively adjusted our strategies and then reprioritized our goal to better align ourselves with the new industry paradigm. Specifically, we placed our focus on DAU growth and how to reach profitability.
Digging into our progress on these two fronts, first, our users and their engagement with our community remain the foundation of our business. By focusing on DAU your growth, we are bringing higher quality users to our platform, which ties in more closely to our monetization potential.
In Q4, our DAUs increased due 93 million, up 29% year-on year. This brought our DAU to MAU ratio to 28%, a meaningful improvement from 26% in the same period last year. The average daily time spent per user on our platform reached 96 minutes, driving the total time spend on our platform, up by 51% year-on year. We will continue to accumulate our DAUs with optimized product offerings and algorithms and to further support our commercial prospects with controlled sales and marketing spending.
Second, we improved our commercialization efficiency and elevated our cross-reduction measures to bring us closer to our goal of profitability. Our total net revenues for 2022 were RMB21.9 [Phonetic] billion and total net revenues for Q4 were RMB6.1 billion, up 60% year-on year. Our gross margin improved to 20% in Q4 compared with 18% in the previous quarter.
We continue to take measures to control expenses and improve our organizational efficiency. Specifically, in the first quarter, we cut sales and marketing expenses by 28% year-on year. Sales and marketing expenses as a percentage of total net revenues reduced from 30% in the same period last year to 21% in the fourth quarter.
We have also streamlined our personnel and then trimmed our non-core and underperforming business. As a result, our non-GAAP net loss in the first quarter narrowed by 21% year-on year and 26% quarter-on-quarter.
As we move through 2023, our operational goal to become a more efficient company. We will centralize our resources to focus on last — but more important tasks. Specifically, we plan to continue to grow DAUs, improving our gross margin and tightening our expenses. As we are executing on these actions, we believe we are on the right track to achieve our breakeven target by 2024.
With that overview of our strategic approach and the progress, I’d now like to provide a brief update on our three core pillars of content, community and commercialization. Starting with content, our ever growing content ecosystem is our most valuable asset. In the fourth quarter, our platform hosted 3.8 million content creators, 25% more than the same period a year ago.
Creators submitted 17.6 million videos, up 62% year-on year, both on a monthly basis. To encourage more users to bring their ideas into creation, we will provide them with more easy-to-use tools to get what the creators started. At the same time, more traffic will be led toward mid and long-tail creators. Our goal is to turn more users into creators, driving both our content offerings and the user engagement.
Expanded content scenarios are also attracting more traffic to Bilibili. For the fourth quarter, total daily video views were up 77% year-on year to 3.9 [Phonetic] billion. In particular, Story Mode daily video views increased by 175% year-on year while PUGV video views increased by 56% in the fourth quarter. Story Mode has allowed us to expand into the vertical video market, bolstering our DAUs, increasing user time spent on our platform and opening more commercial opportunities for us to pursue.
To unlock our commercial potential, in 2022 we further integrated our commercial channels within our content ecosystem. The combination has created more immersive advertising opportunities and various monetization channels for content creators, although 1.3 million content creators earned income through multiple channels on Bilibili in Q4, up 54% year-over-Year.
Looking at our community, our inclusive community environment and the interaction tools are creating tighter bonds between our users and our platform. In the fourth quarter, users’ average daily time spent on Bilibili reached 96 minutes. Monthly inductions also increased by 35% year-on year to 13.6 billion. And for the core members of our community, the number of official members reached a 195 million in the fourth quarter, up 34% year-on year. And the 12-month retention rate continued to exceed 80%.
Now, let’s review our commercialization progress and how we think about it moving forward. For the fourth quarter, our total net revenues reached RMB6,1 billion, up 6% year-over-year and our full year revenue grew by 13% to RMB21.9 billion. We are now more focused on improving our commercialization efficiency and specifically, improving our gross margin at a Company level.
Now, I’d like to share more color on each of our commercial business lines. First, our VAS business; revenues from VAS was RMB2.3 billion for the fourth quarter and RMB8.7 for the year, up 24% and 26% year-on year respectively. Live broadcasting in particular has shown solid growth. For 2022, revenues from live broadcasting increased by over 30%.
Our strategy, to integrate live broadcasting within our video ecosystem, has prompted more creators to tap into live broadcasting universe. This has helped to penetrate more video users, converting paying users and optimize our revenue-sharing structure organically. In the fourth quarter, the number of monthly active live broadcasting hosts increased by over 70% and NPUs for live broadcasting grew by over 40%, both on a year-on year basis.
Looking ahead, live broadcasting well continue to be one of our primary revenue grow drivers. We expect to optimize our revenue-sharing ratio and to further improve live broadcasting gross margin. By the end of the fourth quarter, we had added nearly 1 million premium members from the prior period, reaching a total of 21.4 million premium membership.
We launched multiple Chinese anime titles during the period, including the highly-anticipated sci-fi thriller, Three-Body Problem. In January 2023, our co-produced traditional Chinese tale, graphic anime Yao-Chinese Folktale, [Indecipherable], become a smash hit, generating over 200 million video views on our platform.
As for our advertising arm, we continued to gain market-share in 2022. Advertising revenues were up by 12%, reaching RMB5.1 billion in 2022 and RMB1.5 billing in Q4. Our top performing verticals in the fourth quarter were mobile games, E-commerce, digital products and home appliances, automotive, and skincare and cosmetics.
In 2022, we further open up our ecosystem to embrace more advertising opportunities across various video viewing scenarios. The new scenarios we introduced in Story Mode and improved sales conversion modules have proven success in performance-based ads and carried higher ROIs.
In the fourth quarter, our performance-based ad revenue grew by over 50% year-on year. In addition, as our users [Technical Issues] and into new life stages, the new consumption needs such as automotive and home appliances also attract more advertisers and their ad budgets have been allocated to our platform. Moving into 2023, we’re continuing to invest in and improve our ad infrastructure and further integrate our ad capabilities within our content ecosystem.
Turning to game, revenues for the year were RMB5 billion and RMB1.1 billion for the fourth quarter. We are committed to the strategy of development in-house, which we build globally. In Q4, we restructured our game development to effectively align with this goal. Specifically, we eliminated self-development projects and centralized our resources to focus on the areas where we are already experts. In 2022, our self-development games contributed 5% of our total game revenues. We expect this ratio will continue to expand in 2023, as we roll out more self-development games.
Looking at our pipeline, we are planning to launch two self-development games, [Indecipherable], as well as six exclusively licensed titles in the second quarter of this year. As game license approvals have gradually resumed in China, we expect to engage in more opportunities in the domestic market.
In summary, the new industry dynamics call for more efficient operations. In 2023, we will continue to centralize our resources to grow our DAUs, increase our gross margin and narrow our losses. Throughout this process, we will continue to strengthen our execution and tighten our spending while selectively investing R&D as well improve our commercialization efficiency. With these measures in place, we believe we are on the right track to reach our financial goals and become a stronger, more resilient and efficient organization.
This concludes Mr. Chen’s remarks. I will now provide a brief overview of our financial results for the fourth quarter of 2022 and outlook for the fiscal year of 2023. For a review of our fiscal-year 2022 results, please see our press release issued earlier today.
Total net revenues for the fourth quarter were RMB6.1 billion, up 6% from the same period of 2021. Our total net revenues breakdown by revenue streams were approximately 38% VAS, 25% advertising, 19% mobile games and 18% from our E-commerce and other business.
Cost of revenues increased by 4% year-over-year to RMB4.9 billion. Our gross profit in the first quarter was RMB1.2 billion and our gross margin was 20.3%, up 2. 1 percentage points sequentially. With our tightly controlled cost structure, we expect to show continued margin improvement throughout 2023.
Total operating expenses were RMB3.6 billion, up 15% from the same period in 2021. As we work on increasing our commercial prospects, we are also keeping a lean cost structure. We grew sales and marketing expenses in Q4 by 28% year-on-year to RMB1.3 billion while DAU grew by 29% year-over-year. Sales and marketing expenses as a percentage of total revenues was also down to 21% compared to 30% in the same period last year. We will continue to control our sales and marketing expenses while delivering solid DAU growth in 2023.
G&A expenses were RMB870 million, up 52% year-over-year. The increase was primarily due to the one-off severance paid of RMB252 million related to our organizational restructuring. R&D expenses were RMB 1.5 billion, representing an 87% increase year-over-year, which was primarily due to increase of R&D personnel and a one-off consolidation cost of RMB470 million related to our certain game projects. As we move through 2023, we will take additional actions to reduce our operational expenses. We think our overall operating expenses peaked in 2022 and will start to decline in 2023.
Net loss and adjusted net loss was RMB1.5 billion and RMB1.3 billion, narrowing by 29% and 21% year-on-year, respectively. Our net loss ratio in the fourth quarter was 24%, a very notable improvement from 36% for the same period a year ago. We expect to continue to narrow our losses in 2023.
Turning to our capital allocation and liability management, we are keenly aware of our cash reserves and have taken steps to improve our balance sheet, which gives us the flexibility we need to reach our breakeven target by 2024. We are actively managing our liabilities and to improve our balance sheet.
In the fourth quarter, we repurchased and retailed a total principal amount of $547 million notes for a total cash consideration of $420 million. As a part of our liability management plan, in January 2023 we completed $409 million equity offerings and note exchange program. We retailed a principal amount of $385 million of convertible notes for a consideration of $331 million cash funded by this offering. The remaining $69 million in proceeds were used to replenish our cash reserve. After these transactions, we currently have three outstanding CBs that totaled $1.6 billion.
As of December 31, 2022, we had a cash and cash equivalents, time deposits and short-term investments of RMB19.6 billion or $2.8 billion. We believe this amount is sufficient to cover all of our remaining convertible bonds and fund our future operations, while we take further action to narrow our losses and reach non-GAAP breakeven by 2024. With that in mind, we are currently projecting net revenues for the full year of 2023 to be between RMB24 billion and RMB26 billion.
Thank you for your attention. We would now like to open the call to your questions. Operator, please go ahead.
Questions and Answers:
Operator
Thank you. We will now begin the question-and-answer session. [Operator Instructions] For the benefit of all participants on today’s call, if you wish to ask your question to management in Chinese, please immediately repeat your question in English. Please limit your questions to one at a time. If you wish you have follow-up question, please rejoin the queue.
Our first question comes from the line of Daniel Chen from JP Morgan. Please ask your question, Daniel.
Daniel Chen — JP Morgan — Analyst
[Foreign Speech] Thanks, management, for giving me the opportunity to ask question. So my question is on the 2023 outlook. So with the macro economy gradually recovering, so what’s our core business strategy in 2023 and what are the key focus point from a management point of view? Thank you.
Rui Chen — Chairman and Chief Executive Officer
[Foreign Speech] Starting from last year, we’ve noticed that the Internet industry has entered into a new era. Every company is more focused on the quality of the growth, the quality of revenue as well as improving gross margin and focus on cash flow, not just Chinese Internet company, we noticed many US companies are doing the same thing.
[Foreign Speech] As for us, our key objective for 2023 would be to grow our topline, narrow our losses and focus to achieve higher quality of user growth.
[Foreign Speech] This will be our long-term strategy. It will not — changing because the change of the environment, but of course, as you mentioned, the recovery of the overall economy will help us better executing on this strategy.
[Foreign Speech] Overall, our business will be more focused. There will be two important tasks. One is to increase our topline and narrow our loss. Number two is to increase our DAU.
[Foreign Speech] Number one task, increase our topline. When I say increase our topline, I’m referring to the increase of topline as well as our gross profit. We’ll be focusing on improving our gross margin and narrowing our losses. In the fourth quarter, we’ve achieved gross margin improvement from a year-over-year and quarter-over-quarter basis. We also narrowed our net loss by 29% year-over-year. We expect that in 2023, our overall net loss will narrow more meaningfully, and to achieve our breakeven target by 2024.
[Foreign Speech] On the user aspect, we will no longer just pursue the absolute number of MAU but rather to focus on the growth of our DAU as well as the sales conversion of each DAU that can bring to the Company.
[Foreign Speech] In 2023, we are expecting our DAU to MAU ratio will continue to improve. Currently, we’re at 28%. We expect to increase to 30% level.
[Foreign Speech] This will mean better engagement, better stickiness of our Company as well as higher commercialization potential.
[Foreign Speech] I still want to emphasize that our community and content ecosystem is the cornerstone of our business. No matter what kind of strategy, the community and the content ecosystem is the foundation of the business.
[Foreign Speech] In this year, we will be celebrating our 14th anniversary. And in the past 14 years, we have experienced three industry cycles, which are the mobile PC era, mobile era and as we’re going through the AI-powered era. No matter how the technology industry is evolving, for Bilibili, the community and the PUGV content ecosystem aspect is what has kept us going while others come and go.
[Foreign Speech] We believe in the value of high quality content. We also believe in the value the high talented content creator can bring. That is the biggest moat for our business. It is also the biggest competitive advantage that we own in this ever-changing landscape.
[Foreign Speech] We believe in that our unique content ecosystem can continuously generate high-quality content and talented content creator. And the value of this content that bring to Bilibili is our core competitiveness. We’ll continue to cultivate that and continue to build on that and bring high-quality growth to our Company.
Juliet Yang — Investor Contact
Operator, next question, please
Operator
Thank you. Next question comes from the line of Xueqing Zhang from CICC. Please ask your question, Xyeqing.
Xueqing Zhang — CICC — Analyst
[Foreign Speech] Thank you, management, for taking my question. And my question regards to financial outlook. As Rui mentioned before, we see the Company’s gross margin has continued to increase in the past few quarters. So, how does management think about the change [Phonetic] of margin in 2023? And since we give the full-year revenue guidance, what’s the growth of each segment that it imply? And lastly, on the bottom line, what’s the outlook for [Indecipherable] in detail? Thank you.
Sam Fan — Chief Financial Officer
Yes, this is Sam. I will take your question. As Mr. Chen mentioned, the key objective of the Company for this year is to improve our gross margin and to narrow our loss. So, that’s why for 2023 revenue guidance, we are cutting down low-margin business such as e-sports content supplying revenue business and certain low-margin e-commerce business. As a result, we expect our e-commerce and other revenue line for 2023 to decline by mid 20% to 30%. However, we expect the gross margin and the gross profit for e-commerce and other business to improve year-over-year. And for the non-e-commerce business revenue, including our Game, VAS and advertising if we combat these together, we still expect to grow by 20% plus year-over-year in 2023.
And in regarding to the gross profit, overall, the increase of the revenue will drive the increase of the gross margin, especially for certain fixed costs, such as server and bandwidth, staff costs and content costs. In 2023, as I mentioned, we will be more selective and ROI-focused in terms of the content investment. We also expect the percentage of the server and the bandwidth cost and staff cost will decline.
In terms of the revenue sharing cost, we expect each business line’s gross margin will improve year-over-year. As high-margin business gradually increase their contribution, there will be more meaningful improvement on revenue sharing cost.
For opex, total opex had peaked in 2022. We expect opex will start to decline in 2023. We cut sales and marketing expenses by 15% in 2022. We expect further cost cuts down [Phonetic] for sales and marketing in 2023. Meanwhile, G&A and R&D expenses in terms of the absolute dollar amount will also decline slightly in 2023. We expect our gross margin to gradually improve to mid-20 throughout 2023, and we also expect to meaningfully narrow our non-GAAP operating loss in 2023.
Juliet Yang — Investor Contact
Thank you. Operator, next question please.
Operator
Thank you. Next question comes from the line of Yiwen Zhang from China Renaissance. Please ask your question, Yiwen.
Yiwen Zhang — China Renaissance — Analyst
[Foreign Speech] So, my question is on the advertisement. Can you discuss about the outlook — as market in 2023? And what kind of changes have we seen? And secondly, on the product side, can you give us the latest update on the story mode and what kind of development should we expect on our business on the product side? Thank you.
Carly Lee — Vice Chairwoman and Chief Operating Officer
[Foreign Speech] Firstly, on the story mode, our multi-screen multi-scenario is one of our key strategies that’s driving Bilibili’s user growth. The 28% DAU to MAU ratio and 96 minutes daily user time spend means the strategy is working effectively.
[Foreign Speech] Story Mode as a newly added scenario is an important supplement to our existing PUGV, OGV like broadcasting and big screen OTT scenario. We noticed that since the launch of Story Mode, it has played a vital role in terms of increasing user engagement, especially for users who are not as active. It has also helped us to attract new content creators across the video industry. At the same time, it has driven better than expected increase in terms of video views as well as user time spend. Story Mode has essentially allowed users to access their favorite Bilibili content anytime anywhere.
[Foreign Speech] Bilibili has always put high quality content and content creator at top priority. Since inception, PUGV ecosystem has maintained a very healthy growth. When we are mentioning the Story Mode grow at a fast pace, don’t forget that PUGV also grew by 50% year-on-year and maintained a very healthy growth rate.
[Foreign Speech] Whether as content creator or content consumer, their need for high-quality content will evolve, so will the sense of style. We think that Story Mode has served a very good vessel to carry PUGV content to support our ever-growing ecosystem. In addition, the combination of Story Mode traffic and our existing ecosystem has helped us to increase our ad efficiency, and this has also brought new commercial opportunity for live broadcasting and advertising.
[Foreign Speech] As you may already be aware, it has been a very challenging market for advertising in 2022. The overall ad market only had low single-digit growth. And under this challenging market, we are continuing to gain market share. For Bilibili’s full-year advertising revenue, we have reached RMB5 billion.
[Foreign Speech] As for 2023, there has been a recovery of confidence for advertisers. Maybe, overall industry can achieve a double-digit growth. We will see that. However, we also noticed that for all advertisers, they will be more conscious and they’ll be focusing more on the core value of their ad investment and their ad investment efficiency.
[Foreign Speech] The key reason for advertisers to invest in ads, we have categorized for three main areas. One is new product launch. Number two is brand rejuvenation. Number three is continuously to increase their brand perception and drive sales conversion. The advantage for Bilibili advertising is that we can cover all above three core needs and we are confident our ad growth rate will beat the industry growth rate.
[Foreign Speech] In 2023, we will be looking to upgrade our sales model for different industry verticals. We believe the integrated marketing will continue to be our long-term growth driver. For our leading industry verticals, we’ll continue to build high barriers and upgrade for ad product matrix such as for games, 3C, and digital product.
Take games for an example. Bilibili has the largest gamer and game content community in China and with near 90 million unique users consume content gain content on a monthly basis. We think the recent regularization of Banhao is also a favorable tailwind for us.
In Q1, we have unified the OKRs for three key game teams, including game distribution, game ads and gain content, in order to provide a more comprehensive service to game companies and improve the efficiency for game distribution. Our goal is to enable every game company to reach their target audiences in time and also achieve long operation cycle and higher conversion rate on Bilibili.
[Foreign Speech] Secondly, we expect to further gain market share and attract larger budget from areas like e-commerce, automotive and general FMCGs. Take e-commerce, for example. Bilibili is…
Juliet Yang — Investor Contact
Hello, operator?
Operator
Please carry on.
Carly Lee — Vice Chairwoman and Chief Operating Officer
Yes, we were disconnected for a second. We were saying that Bilibili is the only [Technical Issues] community who is open about e-commerce collaboration.
Last year, together with Alibaba, Pinduoduo and JD, we have optimized our brand-leading conversion model on top of our traditional brand and performance apps. In 2022, over 1,000 new brands and over 10,000 SKUs have debuted on Bilibili through [Indecipherable] function, which also recorded better-than-expected performance-based as revenue. We will continue to integrate video and e-commerce live — live broadcasting e-commerce system and explore Bilibili’s unique open loop transaction model. We also expect to quickly expand our market share in e-commerce apps and their budget this year.
[Foreign Speech] On top of all that, we are also working to improve our algorithm infrastructure and invest in AIGC application and also improve our data capacity to provide our customers with more scientific marketing data point. Also, we’ll continue to explore more ad scenario, intense ad-friendly atmosphere in our community, all of which are the right thing to do, and we have — that’s what we have done in 2022 and we’ll continue to carry into 2023.
Juliet Yang — Investor Contact
Operator, next question please.
Operator
Thank you. Next question comes from the line of Lei Zhang from Bank of America Merrill Lynch. Please ask your question, Lei.
Lei Zhang — Bank of America Merrill Lynch — Analyst
[Foreign Speech] Thanks management for taking my question. My question is mainly about the game business. Can you share with us your in-house game strategy and outlook? And any new game we can expect after the resume of game licensing? Thank you.
Rui Chen — Chairman and Chief Executive Officer
[Foreign Speech] We believe we have entered a new era for game business last year. Banhao is one of the reasons. Another reason was the increasing penetration rate for mobile gamers in China. And also gamers involving taste and their increasing demand for higher-quality games are also shaping the overall games industry. As production cost rises, the success rate for games is declining.
[Foreign Speech] In the era of lower gamer penetration rate it’s easy to make money for game company as long as they have good quality of titles. However, we believe in this new era there will only be — two kinds of games can make money and succeed. One is the super mega titles. Number two would be the number one title in the segment genre, because it will have a longer life cycle. And only these two kinds of games will be able to gain market share and survive in this new era.
[Foreign Speech] Bilibili’s game strategy is designed to serve the market — the next market trend — the market trend in the next few years. We will be firmly executing the strategy of developing house and distribute globally. This will be the month to use for the next industry cycles because only global distribution can cover the increase in production cost and only the highest quality of games have — will have long operation cycle, hence to achieve higher ROI.
[Foreign Speech] In terms of genre, we will be more focused, whether it’s a jointly operated game or our self-development game, we will be focused on the area that we hold the most advantage. The ACG [Indecipherable] will be one of the three same genes will be focusing on. And also, we’ll be looking to cut down the number of projects we will be developing and focus our best resources on the unlimited spot.
[Foreign Speech] From a results perspective, the investment we made in self-development games is starting to bear fruit. In 2022, our self-development games revenue is already contributing about 5% of total game revenue. We expect this ratio will continue to increase in 2023.
[Foreign Speech] As for the Banhao, we believe the releasing of Banhao has already been normalized. There has been quite a [Indecipherable] for domestic Banhao to be released on a monthly basis. We’ve also guess [Phonetic] that in the imported titles there has also been a batch that’s been approved. So, we believe that this has been an industry tailwind favorable to Bilibili, not only our self-developed games, it’s also being — it will also be favorable for our game jointly — operation as well as for our game advertising business.
[Foreign Speech] And also, we are looking to launch two self-development titles in the second quarter this year. [Technical Issues]
Operator
Please remain on the line. Your conference will resume shortly. [Technical Issues]
Juliet Yang — Investor Contact
Hello. Operator, next question, please. Can you hear me?
Operator
Thank you. Our next question comes from Lincoln Kong from Goldman Sachs. Please ask your question, Lincoln.
Rui Chen — Chairman and Chief Executive Officer
[Foreign Speech] So, thank you for taking my question. So my question is about AIGC. So basically, this is a pretty hot theme for this year. Can management elaborate a bit more how we think Bilibili can ply in the whole AIGC front and the potential on the product and monetization opportunity? Thank you. [Foreign Speech] I believe that the opportunity that AIGC can bring is a mega event, not only for the industry players, but for the whole society to pay attention. We believe we’ll bring a huge productivity increase in terms of content generation. First, an analogy would be the invention of mobile phone camera. It has allowed everyone to record video every — anytime, anywhere. And the AIGC can help to increase the productivity of those content and significantly lower the production cost. [Foreign Speech] We believe it has brought very big opportunity for Bilibili as well as for many other players in this industry, but especially so for Bilibili is because, for one, we are a massive content platform. Number two, we are our UGC platform. [Foreign Speech] First, as that would be on the search front, the ChatGPT similar experience will help users to find the video that they want more efficiently, such as product reviews. Let’s say, people want to look for a new Airpod review, for Bilibili who has our own data, we can easily accumulate up and find and organize and structure the useful information and present to the user and — whether it’s in the format of video clips or in a format of text, it will largely enhance the user experience when they use the search function. [Foreign Speech] As for Bilibili, because we have a massive amount of knowledge-related content and knowledge content in a constructive way, it has more time value. Even after a few years back, we can still find that historical videos that continues to generate views and bring value to users, which ChatGPT like search experience will help us to enlarge the value of our historical video content, at the same time to improve the consumption efficiency for our users. [Foreign Speech] In terms of content creation tools, we believe the AIGC can bring revolutionary experience that allows more users to start creating content. For example, the same material can be presented in different formats in different videos and also allow many users who used to just be content consumers. Now, they can easily create content like a professional. [Foreign Speech] Lastly, on virtual content creators, as you may know, Bilibili is already currently the largest virtual content creator platform in China. We have tens of thousands virtual content creators, virtual live broadcasters on Bilibili. AIGC can bring more automatic and more efficiency, more — higher user experience to the virtual characters. For example, our virtual content host, Luo Tianyi, what AIGC can bring is transform her to a real person. And that will bring revolutionary experience for people who are fans. And this is — this has a massive imaginary space that — what we can do with it. So, we believe AIGC will serve very positive effects in terms of the virtual content creator, virtual live broadcasting host and the virtual idols that Bilibili can offer. [Foreign Speech] As a platform who’s connecting content creator with users, the evolution of production tool will serve very positive — bring very positive change to our platform. The change probably will be similar to the PC to mobile era. That’s allowing more people to access Internet, allow more users to be able to create content easily. And that’s why our users have increased by tenfold in the past few years. And I’m personally very looking forward to the — the evolvement of AIGC tools in terms of improving the video production efficiency, allowing more people to create content more easily, that will definitely serve Bilibili as a content platform, the most.
Juliet Yang — Investor Contact
Okay. I think that’s the time we have for today. Operator, we can wrap up the call.
Operator
Thank you. I would now like to turn the conference back to management for any additional or closing comments.
Juliet Yang — Investor Contact
Well, thank you, everyone, for joining us today. If you have further questions, please feel free to contact our IR team or TPG Investor Relations. Our content information was presented in the news released earlier — that we issued earlier today. Thank you, everyone, and have a great day. Bye-bye.
Operator
[Operator Closing Remarks]