Bilibili Inc. (NASDAQ:BILI) Q2 2025 Earnings Call Transcript

Bilibili Inc. (NASDAQ:BILI) Q2 2025 Earnings Call Transcript August 21, 2025

Bilibili Inc. beats earnings expectations. Reported EPS is $0.18, expectations were $0.17.

Operator: Good day, and welcome to the Bilibili Second Quarter 2025 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.

Juliet Yang: 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. A non-GAAP financial measure, we provide are for comparison purpose only. The definition of this measure and the reconciliation table are available in the news release we issued earlier today. As a reminder, this conference 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. I will now turn the call to Mr. Chen.

Rui Chen: Thank you, Juliet, and thank you to everyone for joining us today to discuss our 2025 second quarter results. We maintained strong momentum in the second quarter, delivering solid revenue growth alongside our thriving community of high-value, loyal young users. Total net revenues for the second quarter grew by 20% year-over-year to RMB 7.3 billion, driven by the continued strength of our Core Games and Advertising businesses. Games revenues rose 60% year-over-year to RMB 1.6 billion, propelled by new seasons of our popular SLG title, San Guo: Mou Ding Tian Xia — San Guo. Advertising revenues increased 20% year-over-year to RMB 2.4 billion, supported by greater AI integration that made our app more efficient and effective, underpinned by operating efficiency, our growth in games and advertising drove a 46% year-over-year increase in gross profit, with gross margin expanding to 36.5% from 29.9% in the same period last year.

As a result, we achieved GAAP net profit of RMB 218 million and adjusted net profit of RMB 561 million. Our performance reflects our growing influence among China’s Gen Z+ audience. By providing users with high-quality content they love, we foster deeper engagement that fuels our commercial ecosystem. In the second quarter, DAUs reached a new high of 109 million, up 7% year-over-year, and MAUs grew by 8% to 363 million. MPUs also grew by 9% to 31 million. The average daily time spent rose to 105 minutes, up 6 minutes compared to the same period last year, reflecting our continued focus on high-quality videos that capture and hold our community’s interest in meaningful and fulfilling content. Our growing influence among our core users is showing up both online and offline.

This year’s Bilibili World and Bilibili Macro Link grew in record crowds. Over 400,000 participants attended the 3-day event, 60% more than last year, making it one of the largest offline animation expos in China. The strong turnout reflects the vitality of our brand and the power of our community, showing the tremendous potential of our young users. Their tastes are already shaping mainstream trends and countless more interest within our community are waiting to be unleashed. Looking ahead, we will sharpen our focus on delivering the best PUGV community experience, attracting more users and growing alongside them. At the same time, we will continue to proactively invest in monetization initiatives to drive sustainable profitability. Through these efforts, we are confident in our ability to create long-term value for all of our stakeholders.

With that overview, let’s take a closer look at our core pillars of content, community and commercialization. Beginning with content and community, we remain firm believers that high-quality content and an engaging community are essential to the lives of today’s young generation. Gen Z+ comes to Bilibili, not for quick hits but for meaningful content they care about. And we’re seeing that translate into stronger influence, longer watch time and greater commercial potential across every corner of our platform. Driven by high-quality PUGV content, the average daily time spent reached 105 minutes in the second quarter, up 6 minutes year- over-year. Notably, the watch time for videos longer than 5 minutes increased nearly 20% year-over-year in Q2, proving Bilibili’s undeniable user mind share to consume mid- to long form meaningful content.

Not only are people spending more time but more people are paying for premium content. Monthly paying users increased by 9% year-over-year to 31 million, driven by membership, fan charging and live broadcasting. In the meantime, our community remains engaged and loyal. The number of official members was up by 11% year-over-year to 270 million. With a 12-month retention rate remaining around 80%. We maintained our dominant leadership in ACG content. Chinese anime content performed strongly during the second quarter, with watch time up 34% year-over-year, driven by popular titles such as A Record of Mortal’s Journey to Immortality, [indiscernible], The Tales of Herding Gods Mushen Ji and Link Click Season 2, [ Ling Long DRC ]. Game content remained one of our top categories with watch time increasing by 21% year-over-year, making Bilibili an essential platform for game developers to engage deeply with the gamer community and strengthen their IP.

It is also no surprise that AI-related content continues to be a breakout category. Watch time grew 61% year-over-year, cementing Bilibili’s role as the go-to platform for Gen Z+ to learn, explore and create with AI. Likewise, AI advertiser demand increased by about 150%, highlighting the great synergy between content value and commercial potential. Meanwhile, consumption-related content categories continue to grow, driven by evolving user behavior. As our Gen Z+ users become more financially independent, they increasingly rely on peer creators for trusted reviews and tutorials when making purchase decisions. This has boosted engagement across verticals. Watch time for home appliance content rose 14% year-over- year, parenting and early education rose more than 50% and travel and lodging saw an 11% increase, reflecting growing interest in experience-driven consumption.

We continue to enhance our products and services to help creators make more money. In the first half of the year, about 2 million creators earn income on Bilibili through various channels. Creators total income from our fan charging program more than doubled in the first half of the year, once again showing users increasing willingness to pay for quality content. The number of creators monetizing through Sparkle ads and video and livestream e-commerce also grew 19% and 49% year-over- year, respectively, in the first half of the year. Now let’s talk about our commercial businesses and their progress. Our commercial growth demonstrates how our growing influence among younger users is directly translating into commercial value. Advertising is one of the most direct business lines that shows this.

In the second quarter, our ad business grew 20% year-over-year, reaching RMB 2.4 billion, and continuing to outpace the industry’s average growth rate. During the second quarter, we continued to advance our ad infrastructure, improving ad conversion efficiency through recommendation algorithms, creative generation and smart ad placements. Through deeper LLM integration with multimodal content understanding, we are capturing user intent more precisely and delivering smarter more personalized ad recommendations. The upgrades we’ve made to the AIGC tools are also helping advertisers generate high-performing creative at scale. In the second quarter, roughly 10% of new ad titles and over 30% of ad covers were created using these tools, helping advertisers reach users more effectively with content that resonates with their target audiences.

We also offer smart ad placement tools to allocate sequence and monitor ad performance in real time, significantly reducing manual operations at the same ad spend. These enhancements are boosting both efficiency and scalability improving ECPM by more than 10% year-over-year and fueling around 30% year-over-year growth in performance-based advertising revenue in the second quarter. Revenues for brand and native advertising also maintained healthy momentum. Industry-wise, games, digital products and home appliances, e-commerce, internet services and automotive were our top 5 advertising verticals in the second quarter. The number of advertisers increased by over 20% year-over-year, reflecting our growing appeal to brands, leveraging our dominant user mind share.

Game developers are allocating larger ad budgets to Bilibili to engage more deeply with young gamers. Demand for 3C and digital products remained robust, supported by our leadership in these categories and national subsidy tailwinds. In e-commerce, Bilibili delivered an average new customer acquisition rate of about 60% for advertisers across industries under the [ Simple ] plan during this year’s 618 season. GMV from products priced above RMB 1000 increased nearly 50% year-over-year, further demonstrating our users’ strong purchasing power and our ability to convert user engagement into high-intent transactions. Turning to our games business. In the second quarter, revenues increased by 60% year-over-year to RMB 1.6 billion owing to San Mou’s enduring strength in its first year and evergreen titles FGO and Azur Lane, which recently celebrated their ninth and eighth anniversary, respectively.

To Mark San Mou’s first year anniversary, we rolled out and upgraded Season 8 on May 31, featuring new gameplay, characters and in-game events, backed by a targeted marketing push. Both engagement and retention have been solid as we enhance onboarding, monetization path and returning user experiences. Building on this strong momentum, we are developing new game seasons piloting mini program offerings and preparing for San Mou’s international rollout later this year. Looking at our game pipeline, we have a number of games in the approval process, including multiple ACG titles and casual games. Once approved, we are prepared to bring them to our community and further expand our presence in the gaming space. And finally, let’s look at our VAS business.

Revenues grew 11% year-over-year to RMB 2.8 billion, driven by steady momentum across live broadcasting, premium memberships and other value-added services. Our focus remains on refining live broadcasting operations by fostering more quality content and diversifying monetization features to support steady growth. Through refined operations, gross profit margin for live broadcasting continued to improve in the second quarter. Premium memberships maintained stable growth, reaching 23.7 million at the end of the period with over 80% on annual or auto renewal plans, demonstrating their loyalty and commitment to our platform. Meanwhile, our other VAS products continued to grow rapidly in the second quarter especially our fan charging program, which increased by more than 100% year-over-year with more users showing their support for the creators and high-quality content they love.

Looking ahead, our focus remains on what sets Bilibili apart, high-quality content that resonates with China’s Gen Z+ generation. This is the foundation of our growing influence and the engine behind our expanding commercial opportunities. At the same time, we are actively embracing the transformative opportunities brought by AI from enhancing operational efficiency to elevating user experience, accelerating monetization and expanding our global reach. These advancements further strengthen our foundation for sustained growth and long-term profitability. With that, I will turn the call over to Sam to share more financial detail. Sam, please go ahead.

Xin Fan: Thank you, Mr. Chen. Hello, everyone. This is Sam. In the interest of time on today’s call, I will review our second quarter highlights. We encourage you to refer to our press release issued earlier today for a closer look at our results. In the second quarter, we continued to grow revenues, expand our margins and grow our profitability driven by growth across our commercial businesses particularly in our high-margin advertising and games businesses. Total net revenues for the second quarter were RMB 7.3 billion, up 20% year-over-year. Our revenue breakdown for Q2 was approximately 39% from VAS, 33% from advertising, 22% from games and 6% from our IP derivatives and other businesses. Our cost of revenues increased by 9% year-over-year to RMB 4.7 billion in the second quarter, while our gross profit rose 46% year-over- year to RMB 2.7 billion.

Our gross profit margin reached 36.5% in Q2 compared with 29.9% in the same period last year. Our expanding gross profit and margin show that our model is built to scale. Our total operating expenses were RMB 2.4 billion, remaining stable compared with the same period last year. S&M expenses increased 1% year-over-year to RMB 1 billion. G&A expenses were RMB 510 million, up 4% year-over-year. R&D expenses were RMB 866 million, down 3% year-over-year, mainly related to R&D efficiency improvements. These efforts allowed us to maintain positive operating results. Our operating profit was RMB 252 million, and our adjusted operating profit was RMB 573 million, both compared with losses in Q2 2024. Adjusted operating profit margin reached 7.8% in the second quarter.

Net profit was RMB 218 million and adjusted net profit was RMB 561 million versus losses in the prior year period. Our adjusted net profit ratio in the second quarter was 7.6% compared with an adjusted net loss ratio of 4.4% in the same period a year ago. Cash flow-wise, we generated about RMB 2 billion in operating cash flow in the second quarter. As of the 30th of June 2025, we had cash and cash equivalents, time deposits and short-term investments of RMB 22.3 billion, or USD 3.1 billion. During the second quarter, we enhanced our shareholder return by repurchasing approximately 5.6 million Class Z ordinary shares, each equal to 1 ADS for a total of HKD 783 million or USD 100 million as part of our ongoing share repurchase program. These shares have all been canceled as of the end of the second quarter of 2025.

Under our USD 200 million share repurchase program approved by the Board in November 2024, we’ve repurchased a total of 6.4 million shares so far at a total cost of USD 116 million leaving about USD 84 million available for future buybacks as of June 30, 2025. Thank you for your attention. We would now like to open the call to your questions. Operator?

Q&A Session

Operator: [Operator Instructions] We will now take the first question. from the line of Xueqing Zhang from CICC.

Xueqing Zhang: [Interpreted] Congratulations on the strong quarter. My question is about the user ecosystem. We have noticed that the company’s DAU and MAU growth accelerated in the first half of this year. And the average daily time spend has also continued to increase. So what are the main drivers? And what’s your outlook for the future? In addition, this summer Bilibili would set a record with 400,000 solid participants. So what opportunities can we see for the Bilibili community strong BW’s success.

Unidentified Company Representative: [Interpreted] In the past 16 years, we have been focusing on providing the highest quality content and fostering a thriving and welcoming community culture. And under the current Internet environment, we think the high-quality content and supportive constructive community environment, is what’s in scarcity. In the current video landscape, we think there’s an oversupply of video content. People are not liking content to watch, but they’re liking high-quality content to watch. The same thing goes with the content, the feedback, the voice from the netizens. There is plenty of voices across all apps, but what truly missing is those supportive resonating voice from welcoming friendly communities.

So that’s what Bilibili will continue to focus on by curating the highest quality content and also fostering a welcoming community environment that allow people to connect over the same interest and resonate with each other. We believe that by mastering both high-quality content and a thriving community culture, user will naturally come, they will be drawn into this unique experience. And the user statistics in second quarter, our DAU grew by 7%, MAU grew by 8%. That’s a result of us focusing on the quality content as well as the welcoming community environment. Just like the upgrade we see in lifestyle consumption, content consumption is also evolving and more importantly, the upgrade in content consumption, particularly in aesthetics and taste is largely one way.

Once someone received and have been watched high- quality content, it’s very hard for them to go backwards. And over the past 16 years, we have really established a strong presence in users’ mind shares in categories like anime, games and knowledge-based content. And there’s still a lot of things we can do to further expand surrounding the users interest network. And in addition to that, we think there are more to be done beyond just PUGV, for example, podcast, picture and text-based content, AI-based virtual companionship, there are lots of potential and a tremendous room for us to expand into. So to summarize, we think that it’s an integral part for high-quality content as well as a good and welcoming community environment that’s actually self-sustaining and ever evolving.

For example, we think the high-quality content can attract those people who can truly appreciate this type of content and the friendly welcoming supportive from the users will continue to motivate the content creator to continuously create good content. That’s why unbelievably, we’ve noticed that a talented content creator can be easily discovered and by our users. And at the same time, they can quickly adapt and evolve into a larger, more influential content creator. And even for the same content, I can see everywhere, but the number of interactions and the quality of that interaction is always the best on Bilibili. And also for those high-quality content creators, their fan base, their stickiness is the highest and the strongest on Bilibili, and that is a well-established and common knowledge among the content creators in China.

And that’s why you see many high-quality content has been discovered on Bilibili platforms. For example, a few years ago, the first PV of Black Myth: Wukong was discovered by Bilibili user and quickly become viral and so influential across the Internet. And also a few years ago, we coproduced the mini-animation Nobody Lang Lang Shan Xiao Yao Guai that was also discovered by Bilibili user and become viral and popular recognizing by Bilibili’s community. And now we are very glad to see that as big movie is now getting even more wide recipients from audience and it’s boxing grossing has exceeded RMB 1 billion. And another example would be Black — yesterday at 4:00 a.m., Black Wukong — Black Myth: Zhong Kui was pioneered — premiered on Bilibili platform and within less than 2 days, its total video views has already exceeded 12 million.

And that’s why you see many, many good content will be the most appreciative and be discovered by Bilibili users because we have established that environment that allows high-quality content to thrive. This year’s Bilibili World has broke many records. We have attractive audience from more than 20 countries and regions with over 400,000 people who attend the events. Among them, 70% came from outside of Shanghai and 11% of the tickets were purchased by foreign passports. And it’s safe to say that Bilibili has become the largest ACG event in China, both in terms of scale and influence. And even for the Shanghai City has invented the word of ACG consumption or Bilibili because the event drew a large number of young people to Shanghai, boosting local offline consumption and even become a new cultural landmark for the city.

And at its core, Bilibili is a real-world reflection of Bilibili brand and community offline. People not only use Bilibili product, they also come to offline events named after Bilibili. This shows and reaffirms the influence of IP as well as our community. It’s safe to say that Bilibili brand has become a part of the lifestyle of the young generation in China.

Operator: We will now take the next question from the line of Miranda Zhuang from Bank of America Securities.

Xiaomeng Zhuang: My question is about the advertising business. So second quarter ad business beat expectation again. Can management share what are the drivers? And looking ahead into second half, what are the trends you are seeing for the industry and what’s your expectation about companies at business strength? And what kind of new products and technologies will you roll out?

Unidentified Company Representative: [Interpreted] In the second quarter, our advertising business maintained a strong growth outpacing the overall industry. Quarterly revenue reached a record high of RMB 2.4 billion, up 20% year-over-year. Speaking of the driver behind that growth, we continue to focus on the one horizontal and vertical strategy. In this quarter, we continue to be strengthening our ad infrastructure, product and technology efficiency allow us to further unleash our users value and traffic value. The following 3 points will support that. One is during the quarter, we further enhanced our integrated campaign combining seeding and conversion. In the second quarter, over 50% of the Sparkle ads also leveraged our Qifei program, which is the traffic acquisition program we have in our ad system.

Number 2 is that we continue to strengthen our marketing data infrastructure, leveraging the multi- model large model to significantly improve our ad delivery efficiency. Last thing is we continue to optimize the deep conversion capabilities. The share of deep conversion doubled in the second quarter year-over-year, and there’s still room for us to improve, and that directly leads to an uplift in our overall ad eCPM. And from an industry standpoint, in the second quarter, our top 5 advertisers verticals, there’s a slight change, which are paying digital products and home appliances, e-commerce, online services and automotive, and the number of advertisers increased over 20% year- over-year in the second quarter. Looking in more details, game remains our largest verticals.

We continue to leverage our high-quality full-chain conversion capability. We further strengthened our market share in premium game advertising, while expanding to new scenarios such as Bilibili mini games and game live streaming, creating incremental revenue opportunities. And professional reviews by our professional content creators and in-depth content from those creators continue to attract advertisers to target the young consumers. In the second quarter, home decorations ad revenue grew nearly 70% year-over-year. We will continue to deepen our vertical marketing solutions, while consolidating our leadership in key industries. At the same time, we’re looking to expanding into broader consumer categories. I wanted to add some June 18 data for your reference.

First of all, we continue to press on our open loop strategy and attracting more advertisers to come to Bilibili and see us as a must-invest platform during major sales seasons. The number of advertisers during the June 18 campaign increased 60% year-over-year. And the engagement between creators and consumers continue to rise. During the June 18 campaign, the total GMV grew over 33% year-over-year and the number of creators exceeding RMB 10 billion, GMV grew over 60% year-over-year. And here’s some data points to show the consumers trend on Bilibili. Digital appliance grew over 50% during the season. Household up 85%, even for categories such as maternity and child care, food and beverage and even watches, all grew over 60% year-over-year, showing Bilibili users, strong consumption power as they grow with the platform.

For the second half outlook, there are 2 points we are inviting to take a closer look. One is a broader application and linkage of products and technologies across multiple endpoints and scenarios, including but not limited to PC, OTT, story mode, live streaming, search and trending topics. And then scenario that we can link the consumer with the advertiser. We will be putting more effort into. The second point will be on AI. We believe that AI will continue to drive improvement, not only on efficiency but also delivering actual advertising revenue. One thing is that we’ll continue to implement ongoing iteration of our recommendation algorithm enabling deeper content understanding and more precise app targeting based on our user interest and historical behavior.

Another point would be the AIGC advertising tools to help our advertisers to generate ad covers and titles or even content tailored to Bilibili’s users language and creative style at scale. Currently, about 30% of the ad covers are AI generated and there will be more room for us to push the number forward. And lastly is on AI-powered automated ad deliver products. We will be launching more of those products to improve our advertisers’ cost control capability as well as scaling capabilities. From industry vertical standpoint, in the near term, we think the advertisers’ budget are migrating from multiple platforms to a few core platforms, platforms that are indispensable and unique will capture larger shares of the client budget. And in the longer term, as China’s consumer market involves advertiser will be placing more emphasizing on building their brands on top of the pure sales conversion budget because no advertiser can afford to ignore the influence and purchasing power of young people.

And on that aspect, Bilibili is at a very unique position. So in summary, whether in long term or short term, as long as our community continue to thrive, the value of Bilibili’s advertising business will become increasingly evident over time. We remain confident in our ability to sustain the growth above industry average.

Operator: We will now take the next question from the line of Felix Liu from UBS.

Felix Liu: My question is on the game business. Can management share any color on the recently concluded San Mou first anniversary season 8. How should we think about the second half trend for San Mou as well as for next year? And on your new game pipeline, what are the key games that you would like to highlight?

Unidentified Company Representative: [Interpreted] On June 13, San Mou celebrated its first anniversary. And during that season, the DAU broke a record — a new record within the year of 2025. The achievement of San Mou on its first anniversary to demonstrate that the game has established itself and laid the foundation to become a long-lasting title. We are confident that San Mou will become a lifestyle with a life cycle of over 5 years and continue to contribute solid game revenue for us. During the season 8 and anniversary celebration event, we have launched multiple new monetization tools such as the limited edition skins, which is well received by our users. We believe, for example, like the skin sales during the anniversary has met with our expectations and shows that we have explored a new monetization tool that’s even more healthier and sustainable compared to other tools.

Going forward, we will have the new card monetization combining with the skins as well as new innovative monetization model that will help us to make San Mou even more sustainable and healthy. The most important thing for us is to focusing on making every game season, the best game season. As long as we continue to provide that experience, we think the users will naturally stay and continue to play with this game. On the one hand, we think the overall development capacity for San Mou has improved quite a lot. And each new game season will be featuring richer content. And moving forward, we will continue to optimize the game play, make it more fun, more balanced and make the game even more engaging. On top of the new user acquisition going forward, we’ll be putting more emphasis on retaining and activating the old users because this game has sustained 8 game seasons and there will be a lot of old user or dormant users.

It’s very important for us to activate and weaken those existing users who have played San Mou but have left the game for some reason. This will be a very important channel for us to maintain a healthy game communities. So as far as we see so far, the user retention rate has been maintained at very healthy level. We are expecting to launch the traditional Chinese version of San Mou in the end of this year or early next year, to the players in Hong Kong, Macau and Taiwan. And we are also going to explore potential releases in overseas markets such as Japan and Korea. Looking at our pipeline, we currently have 4 to 5 games that’s waiting for licensing approval. And once the approval is being obtained, the game will be releasing accordingly. In short term, we will be expecting to release a casual game based on [ non-fangu ] IP, which I believe is quite fun and entertaining to look forward to.

And going forward, we’ll continue to execute on the strategy of creating games, reinventing games for the new generation of gamers and we’ll be exploring new game genres and making innovation across different genres and there are a number of potential categories in our pipeline and we’re quite looking forward to.

Operator: We will now take the next question from the line of Lincoln Kong from Goldman Sachs.

Lincoln Kong: My question is about our profit margin. We have seen our group profit margin continued to trend high. So what are the potential areas of our cost efficiency and the cost discipline going forward? How should we think about the second half in terms of profitability outlook? And any time line to achieve our media targets, they are 15% above our operating margin. And in terms of use of the cash, so what are the future areas of capital allocation? How should we think about our shareholder return policy?

Xin Fan: Thank you, Lincoln. This is Sam. I will take your question. In Q2, our top line grew by 20%. Our gross profit increased by 46%. So we saw a very strong operating leverage here. Our gross margin has increased sequentially for 12 quarters. We expect the same trend to continue in the second half of this year, reaching around 37% by Q4, let’s say. So we still maintain our midterm gross profit margin target 40% to 45%. And for the OpEx, we have continued to improve our efficiency of the operation. So if you look at the absolute dollar amount of our OpEx in the second — in the first half of this year, it’s flat year-over-year. So we expect to achieve the year-over-year decline of the OpEx in the second half because in the second half of last year, we have more marketing spending on San Mou at the first 2 quarters.

So for the profitability over the past 2 years, our gross profit margin grew very well, and our operating policy has grown even faster, outpacing our gross margin improvement. In Q2, the OP margin was 7.8%. So we are confident that we can achieve quarter-over-quarter improvement to achieve like 10% adjusted operating margin in Q4 this year. So again, we maintain our midterm target of 15% to 20% for our OP margin. And regarding to the cash usage to enhance our shareholder returns, we already repurchased USD 100 million shares in our Hong Kong line in Q2, and we have canceled all those repurchase shares. So under the current USD 200 million buyback program, we still have USD 83 million remains available as we have sufficient U.S. dollar cash reserves offshore, the repurchase will continue based on the market conditions.

So thank you for your questions.

Operator: We will now take the next question from the line of Yiwen Zhang from China Renaissance.

Yiwen Zhang: So my question is on AI. Can you discuss what kind of AI application we have on platform? And what is the latest progress?

Unidentified Company Representative: [Interpreted] As a matter of fact, the AI application adoption across multiple scenarios on Bilibili has already started to generate value. For example, the advertising revenue grew by 20% year-over-year, and Carly mentioned AI has played an important role behind that number. For example, the AIGC cover title generation has meaningfully improved the click-through rate. And also from behind the MAU and DAU number increases, AI also played a vital role in terms of delivering the right content to the right users. And on the topic of providing high-quality content and fostering a friendly community, we have also leveraged AI capability to amplify Bilibili’s strength through early identification of high quality content through understanding the user’s commentary section.

And that has helped us to promote high-quality content at a very early stage and allow that content to be seen by more people. And this has already shown in our user matrix and community engagement. I’ll elaborate on 3 aspects of how AI is helping Bilibili to become better. One is that AI can really amplify Bilibili strength from one aspect. One example would be every day, there will be over 1 million long comments generated by our users. In the era of AI that means about 1 million people helping the AI to mapping the content to identify the content as good content, good data points. In this asset, this type of long comment generated by real Bilibili user is a truly unique data asset for us to identified high-quality content at a very early stage and promote that across our platforms, and we already have a specific tools to help us to amplify that strength and we will be adopting that technology going forward across multiple content categories and scenarios.

And the second is on AI-assisted content creation for mid- to longer-form video. We’ve seen other players have made even for open source tools for short video creation, but that’s merely just on the video material itself, a little longer than 30 seconds. Whether AI can make mid- to longer-form video, the question we think the answer is yes. On the one hand, we’ve seen other players in the market have that tools to make mid- to longer-form videos, but it just seems that first outlook is produced by AI. However, we think we have the ability to make a human-like mid-to longer form video because we have the best and most talented content creators on our platform who can help us to make this into reality. And we will be launching that product very soon and we think it might be the best human-like mid- to longer-form AI video creation tool that’s out there.

Well, the purpose of that tool, of course, goes back to help our content creator to lower their barriers and improve their production efficiency and contributing to overall content supply rather than making an AI produced video. So we think another analogy is to make a very good Chinese food, you will have the Chinese ingredients, not just to offer them microwave, and we are here to offer the ingredients. And on areas that Bilibili has key advantage on, for example, such as animation, virtual idle and be it virtual streamers, AI also have a strong potential to help us to meet the demand of those ACG lovers. It can — for example, the virtual companionship by a virtual streamer or virtual idle that can be very effectively resolved by the help of AI.

And we have already tapped on that area, and there will be product launch soon to the market.

Juliet Yang: All right. Thank you, operator. That concludes the question-and-answer session. Back to you.

Operator: And that concludes the question-and-answer session. Thank you once again for joining Bilibili’s Second Quarter 2025 financial results and business update conference call today. If you have any further questions, please contact Juliet Yang, Bilibili Executive IR Director or Piacente Financial Communications. Contact information for IR in both China and the U.S. can be found on today’s press release. Thank you, and have a great day. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]