This online meeting announced the company's financial report and business progress for the second quarter of 2025, highlighting future prospects and forward-looking statements, while also mentioning potential risks and uncertainties. Non-GAAP financial indicators are only used for comparison purposes, and detailed definitions and reconciliations have been provided in today's press release. Investors can access the meeting presentation and webcast replay on the company's official website.

In the second quarter of 2025, the company's revenue increased by 20% year-on-year to 730 million yuan, benefiting from strong performance in core gaming and advertising businesses. Advertising revenue increased by 20% to 240 million yuan, and gaming revenue grew to 160 million yuan. Due to improved operational efficiency, gross profit increased by 46% year-on-year, with a gross margin increasing from 29.9% to 36.5%. The company achieved a GAAP net profit of 218 million yuan, and an adjusted net profit of 561 million yuan. The average daily user active time on the platform reached 105 minutes, MAU increased by 8% to 363 million, and DAU increased by 9% to 31 million. The company also achieved great success in offline activities such as Billy Billy World, attracting 400,000 participants, demonstrating brand vitality and community potential. In the future, the company will focus on user experience and sustainable profitability to create long-term value.

In the second quarter of 2023, the average daily viewing time of users on Bilibili reached 105 minutes, an increase of 6 minutes year-on-year, especially significant growth in watching videos of 5 minutes or more. High-quality PGC content has driven the number of monthly paid users to increase to 31 million, a year-on-year increase of 9%. The official community membership has reached 270 million, an increase of 11% year-on-year, and the 12-month retention rate remains at 80%. Viewership of popular content such as ACG, games, AI has increased by 34%, 21%, and 150% respectively, showcasing Bilibili's influence as the preferred platform for Generation Z, with increasing commercial potential.

The platform helps content creators increase their income through various channels, advertising business has significantly grown, and revenue from gaming business has greatly increased year-on-year, showing strong performance.

The dialogue discussed the significant growth in business revenue, especially the strong performance of live streaming, membership services, and value-added services, as well as the foundation laid for long-term profitability through high-quality content and AI technology to improve operational efficiency, user experience, and global influence.

The financial performance for the second quarter was reported, showing a revenue growth of 20%, reaching 7.3 billion RMB, with outstanding performance in the advertising and gaming businesses. The gross profit margin increased to 36.5%, and both operating profit and adjusted operating profit turned losses into profits, reaching 252 million and 573 million RMB respectively. Operating cash flow remained strong, with cash and cash equivalents totaling 22.3 billion RMB as of June 30, demonstrating the company's good financial condition and profitability.

In the second quarter of 2025, the company implemented a large-scale stock buyback plan, repurchasing 5.6 million Class Z common shares, worth 783 million Hong Kong dollars or 100 million US dollars. All repurchased shares have been cancelled. Since the board approved a 200 million US dollar buyback plan in November 2024, the company has repurchased 6.4 million shares, spending 116 million US dollars, with 84 million US dollars remaining for future buybacks. The company will continue to advance the stock buyback plan to enhance shareholder returns.

The conversation discussed the significant growth of the company's user ecosystem in the first half of the year, including accelerated growth in DAU and MAU as well as the continuous increase in average daily usage time per user, emphasizing the importance of these changes for the company.

Discussed the success of the Philippine Woodcarving Festival and its opportunities for the BBB community, as well as prospects for future trends. Over the past 16 years, the festival has attracted 400,000 participants, showcasing its potential as a cultural exchange and economic activity, providing new directions for cooperation and development in the BBB community.

The dialogue emphasizes the importance of high-quality content and constructive, supportive community environment in the current internet environment. It is believed that among the many voices on the internet, the resonant voices from friendly and enthusiastic communities are particularly valuable, and are the cornerstone of building a positive online culture.

By continuously providing high-quality content and nurturing a friendly community environment, user engagement and metrics have significantly improved. In the past 16 years, a solid position has been established in specific fields such as animation and knowledge base content, and there are plans to expand into areas such as text content, AI virtual companions, etc., in order to meet the further development needs of the user interest network in the future.

High-quality content and a friendly community environment mutually promote each other, attracting and motivating content creators, forming a virtuous cycle. By creating a good environment, the platform enables excellent content creators to be discovered and grow, such as the Black Cat Sheriff series and the "Nobody Knows" animation, which have gained wide recognition and commercial success. High-quality content creators have high fan stickiness, and platform activities also attract a large number of external participants, proving the importance of quality content and community environment.

The large event held by Shanghai Huaxi has attracted a large number of young people, driving offline consumption, becoming a new cultural landmark in the city, reflecting the influence of the brand and the community, and integrating into the lifestyle of the younger generation in China.

Discussed the performance of the advertising business in the second quarter, analyzed the driving factors, and looked ahead to industry trends in the second half of the year. Management shared insights into market dynamics, including business development trends, plans for new products and technologies, aiming to seize future opportunities and enhance competitiveness.

In the second quarter, advertising revenue reached a record high of 24 billion yuan, a year-on-year increase of 20%. By strengthening infrastructure, product, and technological efficiency, further release of user value and traffic value is achieved. Specific measures include enhancing integrated marketing activities, improving advertising delivery efficiency, and optimizing deep conversion capabilities. In terms of industry, there is no significant change in the top five advertising sectors, and the number of advertisers has increased by more than 20% year-on-year.

The dialogue emphasized that game advertising, supported by blockchain technology, has created additional revenue opportunities by enhancing market share and expanding into new scenarios such as live streaming. At the same time, the in-depth content created by professional content creators has attracted advertisers, especially in the second quarter, where advertising revenue for home decoration targeting young consumers increased by nearly 70% year-on-year.

The conversation mainly revolves around deepening vertical marketing solutions, consolidating industry leadership positions, and expanding strategic expansion to a wider range of consumer categories. By implementing an open loop strategy, the platform has successfully attracted a large number of advertisers to participate, especially during the 618 promotion period, the number of advertisers increased by 60% year-on-year, and total GMV increased by over 33%, demonstrating the platform's strong consumer driving capabilities. In addition, categories such as digital appliances, home furnishings, mother and baby products, food and beverages, and watches have all shown significant growth in consumption, and user purchasing power has grown together with the platform.

The dialogue discussed the extensive application of products and technology, connecting advertisers with consumers, utilizing search and popular topics, building scene linkage, in the hope of achieving a broader market impact and commercial cooperation in the second stage.

Discussed the ongoing driving role of AI technology in the DeFi and advertising fields, including iterative recommendation algorithms, AI advertising tools generating covers and titles, as well as automated advertising products to improve advertisers' cost control capabilities. Currently, 30% of app covers are generated by AI, and this ratio will be increased in the future.

Discussed the trend of concentrating advertising budgets from multiple platforms to core platforms, as well as the phenomenon of advertisers focusing more on brand rather than pure conversion budgets under the evolving Chinese consumer market. Emphasized the importance of brand influence in the long term and short term perspective, predicting industry growth above average.

Discussed the performance of the game in the first anniversary celebration event, as well as the outlook for the second half of the year and next year. Emphasized optimization and innovation in the new game season, including new profit tools such as limited edition skins. Plans to activate old users, maintain a healthy gaming community, and expects the game to continue to contribute stable income.

Discussed the release of the traditional Chinese version of the Sano game at the end of this year or early next year, targeting the Hong Kong, Macau, and Taiwan regions, while also exploring the Japanese and Korean markets. Mentioned five games awaiting approval, planning to launch casual games based on non-fungible IP, continuously innovating game genres to attract a new generation of players.

The conversation revolves around the potential cost efficiency and discipline in improving the company's profit margins, looking ahead to the profitability prospects for the second half of the year, mentioning the path to achieving the midterm gross profit margin target, discussing cash utilization and shareholder return policies, including share buyback plans.

During the conversation, the host announced that they would move on to the next round of the Q&A session, specifically mentioning a journalist from China and stating that their question would be given priority, demonstrating respect and attention to international media.

Discussed the role of AI in increasing advertising revenue, optimizing content recommendations, and enhancing community interaction, including improving ad click rates through AI, identifying high-quality content, and promoting early content promotion to increase user engagement and community participation, which has been effective in user matrices and community interaction data.

The conversation revolved around the differences between the use of natural language and AI understanding, with participants discussing how common language practices in everyday speech can affect AI's interpretation of human intent. They emphasized the importance of improving AI's natural language processing capabilities.

AI has shown great potential in content creation and quality improvement by analyzing one million long user comments, identifying high-quality content, and promoting it. At the same time, with the help of top content creators on the platform, AI is committed to generating more natural and longer video content. It is expected to launch related products soon, achieving a perfect collaboration between humans and AI in long video production.

The dialogue emphasizes the role of AI technology in lowering the threshold for content creation, increasing production efficiency, and meeting specific needs, especially through providing high-quality virtual idol and virtual anchor solutions to enhance users' virtual companionship experience. The upcoming related products will further drive the development of this field.

The host of the meeting thanked the participants for joining the conference call on the financial results and business updates for the second quarter of 2025, reminded them to contact the Investor Relations department if they have any further questions, provided relevant contact information, and wished the attendees a pleasant day.