Why Bilibili Stock Popped Tuesday

What happened

Shares of Bilibili (NASDAQ: BILI), a Chinese-online platform for mobile games and video sharing soared on Tuesday, following the company's second-quarter earnings release. The stock rose as much as 19.3% and is up 16.6% at 12:42 p.m. EDT.

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Bullishness toward the stock is likely due to Bilibili's strong growth in paying users and its narrower-than-expected loss.

So what

Bilibili, who targets younger generations in China with its online hub, saw revenue jump 76% year over year in the company's second quarter of 2018 to 1,026.5 million RMB, or about $155 million. Bilibili's non-GAAP loss per share was 0.07 RMB, or a loss of $0.01. On average, analysts expected revenue of $150 million and a non-GAAP loss per share of $0.03, according to analyst estimate data provided by Reuters.

Momentum during the quarter was helped by a 30% year-over-year increase in monthly active users and a 177% jump in average monthly paying users. Average monthly paying users for Bilibili's mobile games importantly increased to 0.8 million -- a 40%-year-over year increase.

"Revenue contribution from our advertising, live broadcasting and value-added services continues to grow," said Bilibili CFO Sam Fan in the company's second-quarter earnings release.

Now what

Looking ahead, Bilibili CEO Rui Chen said in the earnings release that the company is:

Fan added that the company's strong growth in paying users, which put average paying users during the quarter at three million, "demonstrates our heightened monetization potential and gives us great confidence in our ability to convert even more paying users and expand our top line."

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Daniel Sparks has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.