Bilibili likely to report weak Q2 earnings on Aug 26

Bilibili Inc. (NASDAQ: BILI) is set to report its second-quarter earnings results on Monday, August 26 after the market closes. The results of the Chinese video-sharing service will be hurt by channel and marketing expenses related to app and brand, promotional expenses for mobile games, increased headcount, expense related to intangible assets, and research and development expenses.

The company generates revenues primarily by providing its users with valuable content, such as mobile games and live broadcasting, as well as from advertising and other services. Bilibili is expected to introduce new products and services to expand its revenue streams. Also, for generating sustainable revenues, the company could start focusing on developing or implementing existing or new monetization strategies.

In the past, the company has incurred significant losses due to the continued investments in technology, talent, content, and other initiatives. The company’s ability to achieve profitability depends in large part on its ability to manage costs and expenses. It also includes those which are beyond the company’s control including macroeconomic and regulatory environment or competitive dynamics in the industry.

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Bilibili’s business depends on its ability to provide users with interesting and useful content. As growing user base and increase the level of user engagement, the company is likely to incur increasing costs, such as licensing fees and royalties for licensed content and hosts’ compensation to further expand the content library to meet the growing and diversified demands of its users.

Analysts expect the company to report a loss of $0.12 per share on revenue of $211.57 million for the second quarter. In comparison, during the previous year quarter, Bilibili posted a loss of $0.01 per share on revenue of $147.92 million. The company has surprised investors by beating analysts’ expectations thrice in the past four quarters.

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For the first quarter, Bilibili reported a wider loss due to higher costs and expenses. However, the top line jumped by 58% driven by a 27% growth in mobile game revenues. The company has been attracting more users to its platform and gaining substantial traction. Monthly active users grew by 31% to 101.3 million and mobile MAUs increased by 39% to 88.6 million.

Looking ahead, the company’s focus for 2019 remains on continued user growth and enhancing its commercialization capabilities. Bilibili has a number of initiatives underway to support this goal, including rolling out new and diversified games titles, further advancing live broadcasting and value-added service streams, and progressing new business initiatives for the growing community.

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