Participants

Yang Juliet; Investor Relations; Bilibili Inc

Xin Fan; Chief Financial Officer; Bilibili Inc

Unidentified Company Representative_2

Daniel Chen; Analyst; JPMorgan Chase & Co.

Felix Liu; Analyst; UBS Securities

Thomas Chong; Analyst; Jefferies LLC

Xueqing Zhang; Analyst; China International Capital Corporation Limited

Yiwen Zhang; Analyst; China Renaissance Securities Hong Kong Ltd.

Presentation

Operator

Good day, and welcome to the Bilibili second quarter 2024 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.

Yang Juliet

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 the Hong Kong Stock Exchange.
The non-GAAP financial measure we'll provide are for comparison purpose only. The definition of these measures and our 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 Lee, Vice Chairwoman of the Board and Chief Operating Officer; and Mr. Xan Fan, Chief Financial Officer.
I will now turn the call over to Mr. Fan, who will read the prepared remarks on behalf of Mr. Chen.

Xin Fan

Thank you, Juliet, and thank you, everyone, for participating in our second quarter 2024 conference call to discuss our financial and operating results. I'm pleased to deliver today's opening remarks on behalf of Mr. Chen. We delivered solid second quarter results with accelerated top line growth. improved margins and healthy community development.
In the second quarter, our total revenues increased by 15% year-over-year to RMB6.13 billion. Our advertising business led this growth with ad revenue growing by 30% year-over-year, revenue from our games and value-added services also increased by 13% and 11% year-over-year, respectively.
The momentum across business lines is a strong testament to our execution in increasing our commercialization efficiency and unlocking the value of our community. Increased revenues from our higher-margin advertising and games business boosted our gross profit by 49% year-over-year.
Gross profit margin rose to 29.9% in the second quarter, up from 23.1% in the same period last year, marking the eighth consecutive quarter of margin improvement. Consequently, we significantly narrowed our adjusted operating loss and adjusted net loss by 69% and 72%, respectively, year-over-year. Moreover, we generated a record RMB1.75 billion in operating cash flow in the second quarter.
Our deferred revenue balance at the end of Q2 also increased by RMB738 million from the end of Q1. With this progress, we are confident that we can achieve our non-GAAP breakeven target in the third quarter of this year and continue to improve our profitability thereafter.
While we have been accelerating our financial performance, our community continues to strive. In the second quarter, our DAUs increased by 6% year-over-year, reaching 102 million and the MAUs grew to 336 million.
Our community remains highly engaged with user spending at daily average of 99 minutes on our platform. As we move into the summer season, we continue to see strong seasonality in terms of user engagement and the retention.
On June 26, we celebrated Bilibili's 15th Anniversary. Over the past 15 years, our platform has become a regular destination for nearly 70% of China Gen Z plus population. This journey has brought us tremendous opportunities as these users have become a major consumer force in society. We have seen it in our advertising growth as we enhance our infrastructure to facilitate their evolving consumption needs.
We have seen it in our game business as we reinvent strategy to resonate more deeply with the preference of younger audience. As we continue to unlock the value of our community, we remain committed to our founding vision to build a welcoming home for talented creators and like-minded individuals to connect over shared interest and to satisfy their evolving needs for good content and service.
With that overview, I would like to discuss our core pillars of content, community and commercialization in more detail.
Beginning with content and community. Our strategy to encourage more high-quality creators to generate content continue to prove beneficial. In the second quarter, average daily video views increased by 18% year-over-year to over 4.8 billion. Our leading content categories such as games, knowledge and technology continued to show solid growth in video views, all increasing by over 20% year-over-year.
Meanwhile, users demand in consumption-related categories also continued to surge in the second quarter. Video views in home appliance and decoration, automotive and fashion and cosmetics all grew by more than 30% compared with the same period a year ago. We continue to provide effective and diversified monetization channels to incentivize our content creators. In the first half of 2024, about 2.1 million content creators received income on Bilibili.
Content creators' total income through our ads and VAS products increased by 30% year-over-year. Notably, our innovative content-based products such as premium courses and the franchising programs have been well received by our users. In the first half of 2024, content creator total income from these two products increased by over 40% and over 430%, respectively, year-over-year.
Looking at our community matrix in the second quarter, our DAU spend an average of 99 minutes with us compared with 94 million in the same period last year, driving up user total time spent by 11% year-over-year.
Monthly interactions increased by 11% year-over-year, exceeding 16.5 billion in the second quarter. By the end of Q2, the number of our official members increased by 13% year-over-year to 243 million, and their 12-month retention rate remained strong at around 80%.
Moreover, in this slide we showed our signature off-line events, Bilibili World and Bilibili MicroLink once again, bringing our community together in Shanghai. More than 250,000 people traveled across the country to participant in event, leading to a surge in Shanghai travel-related consumption. The growing enthusiasm at events shows our unparalleled influence among the young generation.
Now, I'd like to talk about our commercialization progress in each of our business lines. First, on our advertising business. As our users mature with more disposable income, their commercial value unfolds as they seek more consumption-related content on Bilibili. The demand is there and all we need to do is to match the right ad with the right user. In the second quarter, we further improved our ad products and infrastructure to increase our ad efficiency.
Specifically, we upgraded our ad placement system, featuring user-friendly placement tools and enhance conversion capabilities, attracting and retaining more advertisers on Bilibili. In the first half of the year, the number of advertisers on our platform increased by over 50% year-over-year. Moreover, we continue to invest and improve our ad modeling capabilities to better understand our users' consumption behaviors and preferences, which enabled us to further enhance our ad matching efficiency.
Meanwhile, we incorporated more native video style ad content, allowing us to expand ad load while maintaining user experience. We plan to further advance these initiatives in the following quarters and help our advertisers create add materials more easily and place advertisement more automatically. Industry-wise, our top five advertising verticals were mobile games, e-commerce, digital products and home appliance. food and beverage, and automotive in the second quarter.
Our anchor verticals continue to deliver strong performance. During the 618 shopping festival, we not only secured more ad budget from e-commerce platforms, but also directly from online merchants in different verticals.
Total GMV from video and live commerce increased by over 140% year-over-year during the period. Besides our leading verticals, we also saw incremental ad revenues from emerging verticals. In the second quarter, ad revenue from Internet services, AI and education were increased meaningfully.
Turning to our game business. Game revenues resumed growth by 13% year-over-year in the second quarter to RMB1.01 billion, led by the excellent performance of our recently launched strategy game, San Guo: Mou Ding Tian Xia and ACG game, Articrafter.
Our flagship titles also contributed the steady game revenues and demonstrated remarkable longevity. As FGO celebrated its eighth anniversary, it returned to the top 10 on the iOS game grossing chart in July. As for Azur Lane, monthly active users reached a new peak in June with the celebration of a 7-year anniversary. This trend strengthened our commitment to the long-term operation of high-quality games.
We were delighted to see our first strategy game San Mou become an immediately blockbuster. On the first day of first launch ranking the Top 3 on the iOS game grossing chart, attracting millions of gamers to the three kingdoms battlefield. San Mou also set a new record in our operating history being the fastest title that has hit RMB1 billion game grossing mark.
With the launch of the second game season on August 3, San Mou returned to the Top 3 on the iOS game grossing chart. The decent size of the SLG market, the early success of San Mou and the long life cycle nature of SLG games give us confidence that it will become one of our flagship games within enduring longevity.
Over the years, our community has expanded exponentially as so as our gamer base. San Mou's success marks a breakthrough in our general diversification strategy and shows the vast potential of our game business. We will continue leveraging our leading role as a top gaming community and capitalization our significant opportunities to reinvent games for the new generation of gamers.
Turning to our VAS business. Revenues from VAS business increased by 11% year-over-year to RMB2.57 billion. We continue to add more live broadcasting content offerings, reinforcing the synergies between our live broadcasting and the PUGV ecosystem to better cater to use diverse interest.
We will also further explore opportunities in our other VAS business as our Gen Z plus users have demonstrated and increasing willingness to directly pay for the content they love. Our premium members continued to increase, reaching 22.3 million by the end of second quarter with over 80% of them subscribing annually or under auto-renewal packages, showing their continued loyalty and trust in our platform.
Users spending our other VAS product also grew rapidly in the second quarter, particularly in premium courses, our fan charging program and avatar decoration. We expect these products to open more monetization potential across our massive PUGV content universe in the future.
We believe good content and community can bring people together and the value of our users is just starting to show its potential. Our community is striving and our solid second quarter results place us just one step away from profitability.
We are excited to move forward and take Bilibili to the next level. This concludes Mr. Chen's remarks. I will now provide a brief overview of our financial results for the second quarter of 2024. For a closer look at our financial results, we encourage you to refer our press release issued earlier today. As a reminder, all amounts are in RMB, unless otherwise noted.
In the second quarter, we further advanced our commercialization capabilities delivering accelerated year-over-year revenue growth across our core business. At the same time, we continue to expand our margins and considerably narrowed our losses. All of these financial improvements were funded in our top line growth with increased efficiency.
Total revenues for the second quarter were RMB6.13 billion, up 16% year-over-year. Our total revenue breakdown by revenue stream for Q2 was approximately 42% VAS, 33% advertising, 17% mobile games and 8% of our IP derivatives and other business.
Our cost of revenues increased by 5% year-over-year to RMB4.3 billion in the second quarter, while our gross profit rose 49% year-over-year to RMB1.8 billion. Our gross profit margin reached 29.9% in Q2, up from 23.1% in the same period last year.
Our total operating expenses were down 3% year-over-year to RMB2.4 billion in the second quarter. Sales and marketing expenses increased by 13% year-over-year to RMB1 billion, mainly due to increased marketing expenses for the new game launch. G&A expenses were RMB488 million, down 10% year-over-year. R&D expenses was RMB895 million, down 15% year-over-year, both related to reduced headcount expenses.
We narrowed our adjusted operating loss and adjusted net loss to RMB284 million and RMB271 million in the second quarter, reducing our losses by 69% and 72% year-over-year, respectively. Our adjusted net loss ratio in the second quarter come down to 4% from 18% in the same period a year ago.
Cash flow-wise, we generated a record RMB1.75 billion in positive operating cash flow in the second quarter and a total of RMB2.4 billion in positive operating cash flow in the first half of the year. As I mentioned earlier, driven by the strong performances from our games and ad business, our deferred revenue balance at the end of Q2 also increased by RMB738 million from the end of Q1, driving a solid path to achieve our non-GAAP breakeven target next quarter and a sustainable profitability thereafter.
As of June 30, 2024, we had cash and cash equivalents, term deposits and short-term investments of RMB13.9 billion or USD1.9 billion. Thank you for your attention. We would now like to open the call to your questions. Operator, please go ahead.

Question and Answer Session

Operator

(Operator Instructions) Daniel Chen, JPMorgan.

Daniel Chen

(spoken in foreign language) So my question is on the advertising. We see that the advertising growth in the second quarter was very robust, growing about 30% year-over-year. which is very strong. So could you maybe share the key driver behind? And also, how should we expect the advertising growth for the second half?

(spoken in foreign language)

Unidentified Company Representative_2

(interpreted) In a challenging macro environment, Bilibili's second quarter advertising business achieved a 30% year-on-year growth with quarterly revenue exceeded RMB2 billion for the very first time and contributing about one-third of the company's total revenue.
As you can see that our advertising revenue has grossed for several consecutive quarters and the fundamental reason behind that is one that Bilibili's traffic is growing very healthily and secondly is that we are continuously unlocking the commercial value of our users.
Bilibili's DAU grew by 6% year-over-year in the second quarter, while our video views increased by 18% year-over-year, showing continued growth in our commercial traffic.
Over 70% of China's young generations are using Bilibili and the average age of our user has reached 25. This is a stage where the consumption needs and spending power are rapidly growing and being released.
This is evident from the booming growth in our consumption-related content categories in Q2. Video views in the categories such as home decor and real estate, automotive, fashion and beauty all increased by over 30% year-over-year, while daily video views in baby maternity experienced a year-over-year growth of over 80%.
On top of that fundamental reason, what we need to do is to match the demand between advertiser and users with better infrastructure in the industry-based marketing solutions. And the one horizontal refers to the enhancement of platform infrastructure and the multiple verticals refers to the vertical industry-based solutions.
In the first half of this year, we implemented comprehensive upgrades to several of our advertising infrastructure modules. For example, we upgraded the placement platform on our PC and provide a one-stop placement tools for key accounts. And as such, in the first half of this year, the number of performance-based key advertisers increased by 50% year-over-year.
In terms of app materials, our newly launched creative center and active application of AIGC technologies helps our advertisers to diagnose and improve their ad materials after optimization, the CVR achieved over 30% year-over-year improvement.
Now let's take a look at our industry verticals in Q2, our top five advertisers came from mobile games, e-commerce, digital products and home appliances, food and beverage and automotive sectors.
I'll take a closer look at the e-commerce and transaction-based sectors. With our consistent open loop strategy during this year's June 18 shopping festival, we have deepened the integrated marketing and advertising collaborations with e-commerce platforms as well as secured a larger share of e-commerce merchants budget.
During the June 18 period, the number of advertisers on Bilibili increased by over 300% year-over-year and our GMV from live and video commerce increased by over 140% year-over-year. 50% of the customers that we brought to the merchants in different verticals with new customers and specifically for baby and material sector, we bought over 60% of the new users to them.
On our transaction-based advertising, in the first -- in the second quarter, that nearly 40 million users have watched our live and video e-commerce-related content, and this number increased by 70% year-over-year.
In Q2, the average daily content creator engaged in life and video e-commerce increased by over 130% year-over-year. And the number of commerce-related videos grew by over 330% year-over-year. And the number of live e-commerce sessions rose by 270% year-over-year.
The consumption potential of Bilibili's female users, which constitutes near half of our communities, is also gradually unlocked. GMVs in apparel increased over 4 times year-over-year in the second quarter.
We've talked about the second quarter and its driver behind -- and if we look -- take a look into the second half of this year, we're quite confident in maintaining an above-industry average advertising growth rate.
On one hand, the outcome of product infrastructure optimization is being improved, and will continue to show its effect. And on other hand, by enhancing our vertical industry solutions, we not only expand our market share in key industries, but we are also looking to achieve incremental growth in emerging industry verticals such as online services, education, healthcare and baby and maternity.
Lastly, I wanted to emphasize that because we have our unique community aspect, Bilibili's revenue growth was never just been relied on advertisement growth. We can pursue B2B and B2C parallel strategy in our commercialization efforts, meaning that we can not only earn money from advertisers, we can also earn money directly from our consumers. Because we are a community, our users are more inclined to spend on content or spend on content creators that they love to show their support and appreciation.
To sum up, we will be pursuing a B2B and B2C parallel strategy on the one hand. We'll continue to reinforce our advertising platforms to drive the advertising growth. At the same time, we still believe there is great potential in our B2C business meaning on mobile games, premium membership, live broadcasting, combining together will support our sustainable revenue growth.
Operator, next question please.

Operator

Felix Liu, UBS.

Felix Liu

(spoken in foreign language) Let me translate myself. Congratulations on the strong quarter and your successful launch of San Guo: Mou Ding Tian Xia. Could management share more drivers for the game's successful launch? And what are your expectations of the game's lifetime cycle? And looking ahead, what are the future genres that you plan to further expand or invest in the future?

(spoken in foreign language)

Unidentified Company Representative_2

(interpreted) The San Mou game indeed is a blockbuster in the first half of this year. We not only attracted millions of new players. We've also accumulated a very good user feedback and also have large influence among the gaming industry.
The game San Mou broke several records in our game operation history. Surely after its launch, it quickly ranked among the Top 3 on the iOS game top grossing chart and maintained in Top 10 for the entire month afterwards. And San Mou also become the fastest game in Bilibili's operation history to reach RMB1 billion in revenue.
Since last year, we've been emphasizing the importance of operating one game in a extended time for a longer period of time. And for San Mou, especially the SLG genre, is a perfect game genre for long-term operations. And starting from August 3, we launched the game's second season. As of now, the performance of Season 2 with flat gamers sustained enthusiast and good retention rate and this has given us a very strong confidence to make this as a evergreen title.
Many people have asked me why San Mou work, how we picked this game? I think this is a result of our continuous effort in the strategy of making new games, reinventing games to catering to the younger generation. We actually saw this game back in 2022. And we also invested in the development team in 2022. This -- the success of the game is not by accident, it's under long period of time of thinking and strategy and decision-making.
Starting from 2019, our MAU grew by over 200%. And as we expand our gamer circle, also continue to expand. They included more than ACG gamers. They are gamers. They love multiple different categories.
Five years ago, when we only have 100 million MAUs, the most convinced gamer profile would be ACG lovers. But as we evolve into a bigger community with 340 million MAUs, what we cover of our gamer community goes way beyond just an ACG. They love SLG and many other gaming categories.
There are a large number of potential SLG players within the community who are generally interested in content categories such as history, militaries, social and science and art and knowledge. Those are very like -- those demographics fits perfectly with the SLG potential audiences.
SLG is a very large market based on our observation of the existing products in the market, we estimate that there were tens of millions of users who have tried SLG games and there -- and for this group of people, they are mostly dual or active on Bilibili. As we discover those factors, we have established this project. We named this project code name as NSLG, meaning new SLGs.
We've discovered that in the current market, there are many players pain points haven't been addressed. At the same time, the current SLG game offerings in the market does not fully satisfy the young generation's needs in SLG. So we believe as we're making more innovations and addressing their pain points, addressing their evolving needs, we could be successful and the success launch of this game has proven our strategy has been right.
This success behind San Mou we will credit to the overall trend of the immersive, immense opportunity that lays behind reinventing games to catering the young generation needs. This not only adjusts to the SLG categories. It could apply to multiple categories, and we will continue to explore in that direction.
As for the estimation on its life cycle, we believe that SLG by its nature has longer life circles. We've noticed that -- there are SLG games in the market has been operating for eight years and five years. We have set the internal target of making San Mou at least five years -- more than five years game.
And it all boils down to whether the company is focused on making a game into a longer life cycle, longer operation. We have to focus on the longevity of the games. The industry has evolved rapidly. This is no longer a time where everybody can make fast money. We are committed to be the top game who respect our users the most, who listen to our users the most, and we hope to make this game a evergreen title.
Okay. Thank you. Next question please.

Operator

Thomas Chong, Jefferies.

Thomas Chong

(spoken in foreign language) My question is related to the trend in our content offerings. As average age for Bilibili ecosystem already reached 25 years old, can management share about the development of our content strategies and our content categories outlook as well as the consumption trend going forward?

(spoken in foreign language)

Unidentified Company Representative_2

(interpreted) Last quarter, I've mentioned that the average age of Bilibili users have reached 25 years old. And that brought a lot of change in terms of the wealth and depth of our content offerings. As the users needs evolve, we've noticed that in our community there emerged many new content categories and for Bilibili, we are not only a hub for young people's interest and hobbies, but also a commonplace for their lifestyle consumption.
This is evident in the evolve of our content consumption data as young generation enter new stages of life, content category related to their consumptions are growing rapidly on Bilibili. For example, in the second quarter, Bilibili is in the category such as home decor and real estate, automotive, fashion beauty increased by 39%, 43% and 30% year-over-year, respectively.
As I mentioned in the advertising question, the daily video views for baby and maternity category experienced a year-over-year increase of 80%. And this is a natural outcome for our users' average age to evolve into 25. The average age of 25 meaning about half of our users are above 25. And those generations or those demographics naturally have wider interest and consumption needs, and they seek out on Bilibili.
And because the Bilibili has authentic and professional videos and most of our videos are in the mid to longer form, it makes Bilibili the go-to destination for young generation before they make big purchases.
And the reason why behind -- or the reason behind people looking to Bilibili for larger ticket items is because, first of all, the user has to trust the platform, trust the content creator in their view and professional judgment. And secondly is that you can hardly make the decision to purchase a vehicle over 50 seconds of videos.
Speaking of automotive content in the first half of this year. On average, every month, there are 73 millions of users are looking into automotive-related content. We can say that Bilibili has the best quality new car reviews among all platforms. I personally look at the all new car reviews. They're extremely professional and well made. And we think video as content format is perfect for this type of reviews and walkthroughs.
We've talked about the emerging content category. Now let's take a look at our traditional leading content categories and young generation's interest. In the second quarter, videos in the games, knowledge and tech categories, all saw over 20% year-over-year growth. which are 21%, 29%, 29% year-over-year growth rate, respectively.
This means we have established a very strong mindset among young generations where they seek out interest-based content. And speaking of games, two days ago, on the day of Black Myth: Wukong was released, there are tens of thousands of users are live streaming their game experience on Bilibili. This is quite spectacular across the game history.
And on that day, we saw over 2 million peak concurrent user watching the Black Myth: Wukong related content. This number shows that we have continuously led the interest-based content verticals.
We've always said that the evidence to show a community's competitiveness is the ability to continuously produce good and new content. And we think we have already proved that over the past 15 years. Bilibili has the ability and the power to continuously expand its content offerings horizon and content categories. Thank you.
Operator, next question please.

Operator

Xueqing Zhang, CICC.

Xueqing Zhang

(spoken in foreign language) My question regards financial outlook. The company delivered continued margin expansion and robust cash flow this quarter. And could management share with us the outlook for the financials in the second half of 2024? Looking at the third quarter, we're breakeven on profit and what is the mid- to long-term profitability outlook?

Xin Fan

This is Fan. Let me take your question. Our financial performance in the second quarter demonstrated our business model has great potential for increasing the gross profit margin. In Q2, our overall revenue grew by 16%, while gross profit increased significantly by 49% year-over-year. The gross profit margin increased nearly 7% points year-over-year from 23% to nearly 30% in the eight consecutive quarter of margin improvement. This was primarily due to our ability to control costs, where actual rapid revenue growth.
With the continued growth of our high-margin advertising in the game business, there is still substantial room for further improvement for our gross margin. Additionally, it is worth noting that our operating cash flow for the first half of the year was RMB2.4 billion, and our free cash flow reached RMB1.5 billion. This indicates that our business has entered into a positive cycle.
Looking ahead to our financial performance in Q3, we see that the deferred revenue balance increased by over RMB770 million quarter-over-quarter, laying a good foundation for the third quarter revenue growth. We expect the revenue from our games and advertising business to maintain strong growth momentum, along with a significant quarter-over-quarter growth in gross margin.
At the same time, in addition to achieving our initial growth of breakeven in Q3, we now aim to achieve meaningful operating profit on a non-GAAP basis. Meanwhile, we are delighted to see solid growth across our core business lines. Our growth momentum, along with the prudent cost and expense management will lead us to continue expanding our revenue scale and the profitability in 2025 and resulting in an ongoing improvement in our operating margins.

Operator

Yiwen Zhang, China Renaissance.

Yiwen Zhang

(spoken in foreign language) My question is regarding AI application. Can management discuss about how can we apply AI here via multiple user scenario at Bilibili and is there future potential? Thank you.

(spoken in foreign language)

Unidentified Company Representative_2

(interpreted) It is known that Bilibili has the most extensive and highest-quality AI content across the Internet. I think the reason behind that is a most user received higher education background and they are based in the first and second-tier city, who are curious.
And based on our internal data that for the first half of this year, on average -- a monthly average over 80 million users are watching AI-related content on Bilibili. And for those AI-related content, not just one word or 15-second headlines, many of those content has extensive professional content in-depth discussion in AI.
That results in three the most AI platform for Bilibili. First most is that we believe we have the most user who are genuinely interested in AI content. And second most is we have the most AI professionals active on Bilibili. Lastly, is over 90% of the domestic AI companies have set up accounts and get in touch with Bilibili users on Bilibili.
Because the high concentration and condensity of AI content and user gives us a natural advantage and explore AI application and as a platform, generally, we see many of the users initiate their attempt in connecting AI with their content creation back in 2023, there was a user who used the AI tools to mimic famous singers voice singing song in their -- in her original voice. And that actually triggered the original singer to come out and say that she support this type of creation and welcome user to use it.
And for this year, we've noticed many AI-powered music creation, AI-powered animation, I short-play were being released on Bilibili. Our operations team has even made an AI short play competition and attracting a lot of users to participate.
And in terms of our own content creation tools, we have -- we have leveraged and implement AI and our AI creation tools. We believe essentially the application will help to improve the content creation efficiencies for our existing content creators and also allowing regular users to leverage this tool to become a content creator themselves. And this is very beneficial from a content supply perspective.
And we also use AI directly to enhance our user experiences. As of now, we have opened at the AI Assistant and AI Search to all of our users because we have a large amount of knowledge-based, review-based content. You can ask our AI Assistant or AI Search to summarize the keywords and key messaging of videos, and this is very helpful and efficient for a user who wants to get a quick summary of our content.
And there are two more examples of our AI tools. One is AI translations. Our AI translation tools can help to translate many different languages such as the Tibet -- a content creator from Tibet. They spoke in their local language and our AI Assistant can help him to translate into Mandarin.
And we also have a tool called AI Assistant while playing a video if you don't have time to watch the whole thing, you call upon the AI Assistant, the AI Assistant will summarize into a short articles to tell you what this video is about and the overlay -- outline the key points of that video, all of which we believe will effectively help our users to improve their user experience.
We always believe that AI should be a technology that benefits everyone, including users and platforms. And I believe that development of AI requires a joint effort of multiple numerous companies to reach its full potential rather than a company doing the research in AI with and itself in a closed loop.
So as a platform, we always take a very proactive and open attitude. We are already working with several leading domestic AI company on various fronts. And we believe that with our joint efforts, we can bring user better experience. And for those partners, they can also unleash their full potential and value with Bilibili and our users.
And as many of you might notice that our AI generated video capabilities is through our partnership with a leading AI company and we expect to continue this collaboration with various partners. And through this partnership, we aim to bring better and more efficient and more creative experience to our users.
Thank you. That concludes today's answering session.

Operator

Thank you. Thank you once again for joining Bilibili second quarter 2024 financial results and business update conference call today. If you have any further questions, please contact Juliet Yang, Bilibili's Executive IR Director or Piacente Financial Communications. Contact information for IR in both China and the US 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. The interpreter was provided by the company sponsoring this event.