Bilibili ( NASDAQ: BILI ) initially fell by as much as 7.5% out of Thursday's market open after a mixed fourth-quarter earnings report where revenues narrowly missed consensus and 2023 guidance looked light - but by late morning the stock rebounded to become one of the best gainers in Communications names as reaction to the print rolled in.
Bilibili stock had risen 6.1% to a session high in the lunch hour.
Analysts expected an initial negative reaction based in large part on Bilibili's 2023 revenue guidance - for 24B-26B yuan, a gain of 10-19% year-over-year, vs. Wall Street consensus closer to 26B yuan or more.
The outlook was set to raise investor concerns, though "we consider the guidance to be conservative, as there are still many uncertainties in BILI's various business segments' 2023 outlook," J.P. Morgan analyst Daniel Chen said: Economic recovery outlook is a key driver for Bilibili's advertising business; and game approval status (especially import game license timing for the key pipeline in Pretty Derby).
User metrics still looked like the bright spot, Chen noted: Daily active users rose another 3% quarter-over-quarter and 29% year-over-year to 92.8M, a positive result in a traditionally weak quarter. And average daily time spent per user stayed high at 96 minutes (up 17% year-over-year).
In the company's earnings call, CEO Rui Chen said the top objective for 2023 was to grow top-line revenue and narrow losses, and to pursue higher-quality user growth.
The company narrowed its net loss by 29% in the fourth quarter, Chen said - and it's pursuing more meaningful narrowing this year in pursuit of break-even by 2024.
He also noted the company isn't just pursuing absolute numbers of monthly active users, but to grow daily active users (and related sales conversions). The DAU/MAU ratio is currently at 28%, and Bilibili expects to increase to 30%, Chen said.
For more, dig into the company's earnings presentation and Seeking Alpha's transcript of Bilibili's earnings conference call .
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Bilibili rebounds to 6% gain as earnings focus lands on outlook