Shares of Bilibili (NASDAQ: BILI) fell 18% this past week, according to data from S&P Global Market Intelligence, after the video-sharing site reported mounting losses and issued a tepid sales forecast.
Bilibili’s revenue rose 9% year over year to 4.9 billion yuan ($732.9 million) in the second quarter. The China-based company saw its average monthly active users jump 29% to 305.7 million, while its daily active users increased 33% to 83.5 million. Its average monthly paying users meanwhile, leaped 32% to 27.5 million.
“We grew our advertising market share, bucking broad industry trends,” CEO Rui Chen said in a press release.
Still, coronavirus-related lockdowns slowed Bilibili’s expansion, while higher costs drove larger losses. It generated an operating loss of 2.2 billion yuan (US$327.1 million), compared with 1.5 billion yuan in the prior-year quarter. Bilibili, in turn, posted an adjusted net loss of 2 billion yuan (US$293.8 million), or 4.98 yuan ($0.74) per American depositary share. That was below analysts’ estimates, which had called for adjusted per-share profits of 4.42 yuan.
Bilibili guided for revenue of 5.6 billion to 5.8 billion yuan, or roughly $822 million, in the third quarter. That, too, was below analysts’ expectations, which had been for revenue of approximately 6 billion yuan.
Yet Chen offered a ray of hope for disheartened investors. “We believe the largest impact of the pandemic is behind us, and we are poised to regain our growth momentum and improve our margins in the second half of 2022,” he said.