Bilibili: In the future, focus on health revenue growth and sustainable profit expansion strategy, confident in achieving medium to long-term profit margin targets

AASTOCKS
2025.11.14 06:51

Bilibili (09626.HK) (commonly known as B Station) CFO Fan Xin stated during the earnings call that third-quarter revenue grew by 5% year-on-year, and gross profit increased by 11%. The company's gross margin has improved for 13 consecutive quarters, and this trend is expected to continue this year, reaching 37% in the fourth quarter. The company's mid-term gross margin target of 40% to 45% remains unchanged. Additionally, adjusted operating profit (i.e., profit before other income) grew by over 150% year-on-year, and the adjusted operating profit margin increased from 3.7% to 9%. The company expects this figure to further rise to around 10% in the fourth quarter of this year, steadily moving towards the mid-term adjusted operating profit margin target of 15%. The company has observed the resilience of the B Station business model and will focus on healthy revenue growth and sustainable profit expansion strategies in the future, confident in achieving its medium to long-term profit margin targets.

Regarding cash usage, Fan Xin indicated that the company will allocate resources prudently and act cautiously. Currently, the free cash flow has reached $1 billion each quarter. Therefore, the company will continue to use funds to support high-quality revenue growth businesses, such as advertising; secondly, the company will also invest in new opportunities, such as expanding its business scope. Management also mentioned that they will create more new games for the younger generation of players, such as the recently launched "Escape from Duckkov"; it was previously announced that "Escape from Duckkov" will be expanded to mobile platforms in the future; finally, the company will seize important industry trends, as it has been seeking suitable talent in fields such as artificial intelligence.

Regarding shareholder returns, Fan Xin revealed that the company has issued stocks worth over $100 million this year, and there is a two-year stock repurchase plan approved by the board, with approximately $83 million in funds remaining, which is expected to be fully utilized within the remaining term of the plan

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