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What Did Bilibili Gain From the COVID-19 Crisis?

By Anders Bylund – May 20, 2020 at 9:23AM

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The popular video-sharing service won a ton of new users in Wuhan's coronavirus lockdown, even if management doesn't want to talk about it.

Chinese video-sharing specialist Bilibili (BILI -1.47%) reported first-quarter results after the closing bell on Monday, May 18. The company posted fantastic growth across the board, more helped than hindered by the COVID-19 health crisis.

Bilibili's first-quarter results by the numbers


Q1 2020

Q1 2019


Analyst Consensus


$327 million

$205 million


$309 million

GAAP net income (loss)

($76.1 million)

($29.2 million)



Adjusted earnings (loss) per diluted share





Data source: Bilibili. GAAP = generally accepted accounting principles.

Bilibili found itself at the epicenter of the novel coronavirus outbreak at the start of 2020. The company quickly emerged as a leading channel of communication from Wuhan to the rest of the world, and people under firm lockdown orders also turned to Bilibili as a source of entertainment. Offering some of its premium content for free to Wuhan's residents in February, Bilibili earned eyeballs and user engagement by the truckload.

The results were not subtle.

Bilibili's monthly active users (MAUs) skyrocketed from 130 million in the fourth quarter to 172 million in this report, which works out to a 70% year-over-year increase. Average daily users (DAUs) jumped 69% year over year to 51 million, including 13 million new users in the first quarter alone.

Like any high-growth business worth its salt, Bilibili didn't stuff the incoming revenues in the bank as retained profits. The sales and marketing budget more than tripled year over year as the company put the proverbial pedal to the metal.

What do you mean, COVID-19 helped?

The company largely dodged the issue of winning users and revenues based on the COVID-19 crisis. CEO Rui Chen didn't mention the pandemic in Bilibili's earnings call until analysts literally asked him about it.

"We believe the pandemic only helped us to accelerate our user growth process, but it will not change or become a main factor of how our users grow," Chen said. "We believe that user growth is based on two factors. One is 10 years of devotion and dedication in building a healthy content ecosystem and friendly community to ensure that we always have the highest quality content to offer to our users. And second of all, is our continuously raising brand awareness and our active impressive user acquisition strategy."

In other words, please stop suggesting that Bilibili gained anything from this terrible health crisis. This overnight success was built over the last 10 years. That's all.

Not so fast, Mr. Chen.

Two young Asian women share a bench, pointing and smiling at their smartphones.

Image source: Getty Images.

Let's hear it from Bilibili's peers

There's some truth to Chen's argument because luck favors the prepared. It still looks a bit silly when Bilibili's CEO swats away every suggestion that the COVID-19 situation might have anything to do with this quarter's stellar growth.

Maybe it's a cultural difference that I will never fully understand, but many Chinese business leaders have not been shy about gaining business from the coronavirus situation. For example, online retailer (JD 1.81%) crushed Wall Street's first-quarter expectations, and CFO Sidney Huang was quick to admit that the virus-fighting lockdown helped.

"When the pandemic situation was highly uncertain and social distancing was at the most strict time, there will be a huge spike in orders for fresh products and other daily necessities and as I mentioned earlier, we are now the largest omnichannel supermarket in China," Huang said. "So we are here to benefit from the increasing demand in this category."

Online services giant Tencent (TCEHY -0.28%) made it very clear that the lockdown situation helped in the first quarter, and that things are going back to normal now that the residents of Wuhan can leave their homes again.

"Whatever benefit that came through in the first quarter because people stayed at home more and thus have more time on the screen and spend more time on games and video and Internet services, we are seeing that normalizing, by and large, in April," said Tencent President Martin Lau in his company's first-quarter call.

The upshot: You can own the COVID-19 win, Mr. Rui

All of that being said, some of Bilibili's virus-related changes look like they'll stick around for a while. The company hired a lot of people during the first quarter with a particular focus on expanding the sales staff. Chinese consumers spent more time with Bilibili's apps and services than ever before and that moment of valuable market exposure should be sticky.

This was an impressive growth stock before COVID-19 came along and the rocket engines only gained more fuel from the crisis -- even if you have to twist Rui Chen's arm before he'll admit it.

Anders Bylund has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Bilibili,, and Tencent Holdings. The Motley Fool has a disclosure policy.

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