(Yicai Global) June 2 -- Chinese video streaming giant Bilibili narrowed its net loss by 72 percent in the first quarter of the year thanks to lower revenue costs and operating expenses.

The net loss was CNY629.6 million (USD89 million) in the three months ended March 31, versus CNY2.3 billion (USD325 million) a year earlier, the Shanghai-based firm said in an earnings report released yesterday. Gross profit jumped 38 percent to CNY1.1 billion. Revenue rose 0.3 percent to nearly CNY5.1 billion, the lowest annual growth rate since the firm listed in New York in 2018.

“We started the first quarter of 2023 on a positive note with a notable improvement in our gross profit and a significant reduction in our losses,” said Chairman and Chief Executive Rui Chen. “We continue to execute our strategy of prioritizing profitability while fostering a vibrant and highly engaged community for our users and creators.”

Bilibili’s revenue costs fell 7 percent, with revenue-sharing costs, a key component, down 8 percent. Operating expenses dropped 11 percent, with sales and marketing expenses tumbling 30 percent.

“Many of the spending control measures we initiated were effective and led to a notable reduction in our total operating expenses,” Chief Financial Officer Sam Fan said.

Bilibili’s shares [HKG: 9626] fell 0.5 percent in Hong Kong today to close at HKD123.50 (USD15.76) apiece, while the Hang Seng Index gained 4 percent. In pre-market trading in New York, the firm’s stock [NASDAQ: BILI] was trading up 1.1 percent at USD16.04 as of 7.50 a.m. local time, after gaining 1.3 percent yesterday.

Revenue from advertising rose 22 percent to CNY1.3 trillion, becoming Bilibili's fastest-growing segment. Most of the firm's ad revenue came from the games, digital home appliances, e-commerce, beauty and skincare, and auto sectors.

Income from mobile games slumped 17 percent to CNY1.1 billion because of the lack of new games in the quarter. Revenue from value-added services, including livestreaming, rose more slowly than a year ago, gaining 5 percent to CNY2.2 billion.

Bilibili's monthly active users declined for the second consecutive quarter to 315.2 million. Meanwhile, daily active users jumped 18 percent to 93.7 million.

During the earnings conference call, Chen reiterated that an article about content creators abandoning Bilibili because they were not earning money are untrue, describing the article as “clickbait.”

In the first quarter, 1.5 million video bloggers earned money on Bilibili, up 50 percent from a year earlier, Chen noted, adding that 700,000 of them made money by livestreaming. Generating income for vloggers is one of the company's top priorities, he said.

“We have done a lot of work to help our content creators monetize,” Chen said.

For this year, Bilibili said it expects to have revenue of between CNY24 billion and CNY26 billion (USD3.4 billion and USD3.7 billion), unchanged from previous estimates.

Editors: Shi Yi, Futura Costaglione