Bilibili (BILI) 6-K Management’s Discussion and Analysis of Financial Condition and Results of Operations

Exhibit 99.2

INDEX TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited Interim Condensed Consolidated Balance Sheets as of December 31, 2020 and September 30, 2021	F-2
Unaudited Interim Condensed Consolidated Statements of Operations and Comprehensive Loss for the nine months ended September 30, 2020 and 2021	F-4
Unaudited Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity for the nine months ended September 30, 2020 and 2021	F-5
Unaudited Interim Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2020 and 2021	F-7
Notes to the Unaudited Interim Condensed Consolidated Financial Statements	F-9

F-1

BILIBILI INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands, except for share data)

	December 31, 2020		September 30, 2021		September 30, 2021
	RMB		RMB		US$
					Note 2(d)
Assets
Current assets:
Cash and cash equivalents		4,678,109		10,470,237		1,624,955
Time deposits		4,720,089		4,521,003		701,649
Accounts receivable, net		1,053,641		1,347,468		209,124
Amount due from related parties		164,732		1,470,094		228,155
Prepayments and other current assets		1,765,787		2,525,591		391,967
Short-term investments		3,357,189		9,439,311		1,464,958
Total current assets		15,739,547		29,773,704		4,620,808
Non-current assets:
Property and equipment, net		761,941		1,363,808		211,660
Production cost, net		667,876		893,204		138,623
Intangible assets, net		2,356,959		3,259,237		505,826
Deferred tax assets		20,918		20,918		3,246
Goodwill		1,295,786		1,633,509		253,517
Long-term investments, net		2,232,938		4,186,112		649,674
Other long-term assets		789,643		1,336,589		207,435
Total non-current assets		8,126,061		12,693,377		1,969,981
Total assets		23,865,608		42,467,081		6,590,789
Liabilities
Current liabilities:
Accounts payable		3,074,298		4,198,301		651,566
Salary and welfare payable		734,376		902,181		140,016
Taxes payable		127,192		148,421		23,035
Short-term loans		100,000		934,306		145,002
Deferred revenue		2,118,006		2,661,401		413,043
Accrued liabilities and other payables		1,237,676		1,917,825		297,642
Amount due to related parties		—		84,117		13,055
Total current liabilities		7,391,548		10,846,552		1,683,359
Non-current liabilities:
Long-term debt		8,340,922		7,856,580		1,219,322
Other long-term liabilities		350,934		340,708		52,877
Total non-current liabilities		8,691,856		8,197,288		1,272,199
Total liabilities		16,083,404		19,043,840		2,955,558

F-2

BILIBILI INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (Continued)

(All amounts in thousands, except for share data)

	December 31, 2020			September 30, 2021			September 30, 2021
	RMB			RMB			US$
							Note 2(d)
Shareholders’ equity
Ordinary shares:
Class Y Ordinary Shares (US$0.0001 par value; 100,000,000 shares authorized, 83,715,114 shares issued and outstanding as of December 31, 2020; US$0.0001 par value; 100,000,000 shares authorized, 83,715,114 shares issued and outstanding as of September 30, 2021)		52			52			8
Class Z Ordinary Shares (US$0.0001 par value; 9,800,000,000 shares authorized, 271,507,165 shares issued, 268,204,838 shares outstanding as of December 31, 2020; US$0.0001 par value; 9,800,000,000 shares authorized, 306,931,325 shares issued, 303,872,227 shares outstanding as of September 30, 2021)		172			197			31
Additional paid-in capital		14,616,302			35,277,795			5,475,028
Statutory reserves		17,884			17,884			2,776
Accumulated other comprehensive income/(loss)		141,129			(32,991	)		(5,120	)
Accumulated deficit		(7,175,339	)		(11,876,553	)		(1,843,212	)
Total Bilibili Inc.’s shareholders’ equity		7,600,200			23,386,384			3,629,511
Noncontrolling interests		182,004			36,857			5,720
Total shareholders’ equity		7,782,204			23,423,241			3,635,231
Total liabilities and shareholders’ equity		23,865,608			42,467,081			6,590,789

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

F-3

BILIBILI INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(All amounts in thousands, except for share and per share data)

	For the Nine Months Ended September 30
	2020			2021			2021
	RMB			RMB			US$ Note 2(d)
Net revenue
Mobile games		3,673,726			3,795,576			589,064
Value-added services		2,598,437			5,040,368			782,253
Advertising		1,120,348			2,935,805			455,630
E-commerce and others		766,338			1,831,152			284,190
Total net revenues		8,158,849			13,602,901			2,111,137
Cost of revenues		(6,262,797	)		(10,657,556	)		(1,654,027	)
Gross profit		1,896,052			2,945,345			457,110
Operating expenses:
Sales and marketing expenses		(2,471,403	)		(4,033,248	)		(625,950	)
General and administrative expenses		(633,263	)		(1,299,386	)		(201,662	)
Research and development expenses		(1,028,993	)		(2,042,245	)		(316,951	)
Total operating expenses		(4,133,659	)		(7,374,879	)		(1,144,563	)
Loss from operations		(2,237,607	)		(4,429,534	)		(687,453	)
Other income/(expenses):
Investment income/(loss), net (including impairments)		19,187			(100,852	)		(15,652	)
Interest income		68,306			43,784			6,795
Interest expense		(73,804	)		(105,370	)		(16,353	)
Exchange gains/(losses)		28,329			(19,560	)		(3,036	)
Others, net		23,891			(38,938	)		(6,043	)
Total other income/(expenses), net		65,909			(220,936	)		(34,289	)
Loss before tax		(2,171,698	)		(4,650,470	)		(721,742	)
Income tax		(38,608	)		(62,502	)		(9,700	)
Net loss		(2,210,306	)		(4,712,972	)		(731,442	)
Accretion to redeemable noncontrolling interests		(4,292	)		—			—
Net loss attributable to noncontrolling interests		30,693			11,758			1,825
Net loss attributable to the Bilibili Inc.’s shareholders		(2,183,905	)		(4,701,214	)		(729,617	)
Net loss		(2,210,306	)		(4,712,972	)		(731,442	)
Other comprehensive loss:
Foreign currency translation adjustments		(115,950	)		(174,120	)		(27,023	)
Total other comprehensive loss		(115,950	)		(174,120	)		(27,023	)
Total comprehensive loss		(2,326,256	)		(4,887,092	)		(758,465	)
Accretion to redeemable noncontrolling interests		(4,292	)		—			—
Net loss attributable to noncontrolling interests		30,693			11,758			1,825
Comprehensive loss attributable to the Bilibili Inc.’s shareholders		(2,299,855	)		(4,875,334	)		(756,640	)
Net loss per share, basic		(6.36	)		(12.50	)		(1.94	)
Net loss per share, diluted		(6.36	)		(12.50	)		(1.94	)
Net loss per ADS, basic		(6.36	)		(12.50	)		(1.94	)
Net loss per ADS, diluted		(6.36	)		(12.50	)		(1.94	)
Weighted average number of ordinary shares, basic		343,156,614			376,073,065			376,073,065
Weighted average number of ordinary shares, diluted		343,156,614			376,073,065			376,073,065
Weighted average number of ADS, basic		343,156,614			376,073,065			376,073,065
Weighted average number of ADS, diluted		343,156,614			376,073,065			376,073,065
Share-based compensation expenses included in:
Cost of revenues		24,427			50,069			7,771
Sales and marketing expenses		28,728			38,195			5,928
General and administrative expenses		109,346			387,857			60,194
Research and development expenses		76,036			216,226			33,558

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

F-4

BILIBILI INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(All amounts in thousands, except for share data)

	Ordinary shares
	Class Y Ordinary Shares						Class Z Ordinary Shares				Additional paid-in capital			Statutory reserves		Accumulated other comprehensive income/(loss)			Accumulated deficit			Noncontrolling interests			Total shareholders’ equity
	Shares			Amount			Shares		Amount
				RMB					RMB		RMB			RMB		RMB			RMB			RMB			RMB
Balance at December 31, 2019		85,364,814			53			242,751,341		155		10,718,190			13,463		466,229			(4,145,606	)		583,976			7,636,460
Net loss		—			—			—		—		—			—		—			(2,179,613	)		(30,693	)		(2,210,306	)
Impact of adoption of credit loss guidance		—			—			—		—		—			—		—			(17,900	)		—			(17,900	)
Share-based compensation		—			—			—		—		238,537			—		—			—			—			238,537
Share issuance from exercise of share options		—			—			3,740,852		3		—			—		—			—			—			3
Issuance of ordinary shares, net of issuance costs of US$563		—			—			17,310,696		12		2,817,446			—		—			—			—			2,817,458
Shares redesignation		(1,649,700	)		(1	)		1,649,700		1		—			—		—			—			—			—
Accretion to redeemable noncontrolling interests		—			—			—		—		(4,292	)		—		—			—			(1,672	)		(5,964	)
Capital injection in subsidiaries by noncontrolling interests		—			—			—		—		—			—		—			—			21,463			21,463
Acquisition of subsidiaries		—			—			270,435		*		120,865			—		—			—			41,627			162,492
Purchase of noncontrolling interests		—			—			1,731,100		1		300,728			—		—			—			(416,785	)		(116,056	)
Foreign currency translation adjustment		—			—			—		—		—			—		(115,950	)		—			—			(115,950	)
Balance at September 30, 2020		83,715,114			52			267,454,124		172		14,191,474			13,463		350,279			(6,343,119	)		197,916			8,410,237

* Less than 1.

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

F-5

BILIBILI INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (Continued)

(All amounts in thousands, except for share data)

	Ordinary shares
	Class Y Ordinary Shares				Class Z Ordinary Shares				Additional paid-in capital			Statutory reserves		Accumulated other comprehensive income/(loss)			Accumulated deficit			Noncontrolling interests			Total shareholders’ equity
	Shares		Amount		Shares		Amount
			RMB				RMB		RMB			RMB		RMB			RMB			RMB			RMB
Balance at December 31, 2020		83,715,114		52		268,204,838		172		14,616,302			17,884		141,129			(7,175,339	)		182,004			7,782,204
Net loss		—		—		—		—		—			—		—			(4,701,214	)		(11,758	)		(4,712,972	)
Share-based compensation		—		—		—		—		692,347			—		—			—			—			692,347
Share issuance from exercise of share options		—		—		2,533,229		2		—			—		—			—			—			2
Share issuance upon secondary public offering (“HK IPO”), net of issuance costs of HKD 337,143		—		—		28,750,000		18		19,266,792			—		—			—			—			19,266,810
Issuance ordinary shares related to long-term investment		—		—		1,045,700		1		(1	)		—		—			—			—			—
Share issuance upon the conversion of convertible bonds		—		—		2,854,277		3		449,908			—		—			—			—			449,911
Capital injection in subsidiaries by noncontrolling interests		—		—		—		—		—			—		—			—			2,040			2,040
Acquisition of subsidiaries		—		—		484,183		1		265,060			—		—			—			(14,749	)		250,312
Purchase of noncontrolling interests		—		—		—		—		(12,613	)		—		—			—			(120,680	)		(133,293	)
Foreign currency translation adjustment		—		—		—		—		—			—		(174,120	)		—			—			(174,120	)
Balance at September 30, 2021		83,715,114		52		303,872,227		197		35,277,795			17,884		(32,991	)		(11,876,553	)		36,857			23,423,241

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

F-6

BILIBILI INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(All amounts in thousands)

	For the Nine Months Ended September 30,
	2020			2021			2021
	RMB			RMB			US$ Note 2(d)
Cash flows from operating activities:
Net loss		(2,210,306	)		(4,712,972	)		(731,442	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation of property and equipment		227,841			371,172			57,605
Amortization of intangible assets		888,777			1,348,504			209,285
Amortization of right-of-use assets		66,206			117,451			18,228
Amortization of debt issuance costs		13,059			16,621			2,580
Share-based compensation expenses		238,537			692,347			107,451
Allowance for doubtful accounts		61,168			103,408			16,049
Inventory provision		5,542			12,269			1,904
Deferred income taxes		(6,941	)		(4,541	)		(705	)
Unrealized exchange losses/(gains)		1,008			(1,282	)		(199	)
Unrealized fair value changes of investments		(18,583	)		88,155			13,681
Loss on disposal of property and equipment		—			611			95
Loss from equity method investments		5,663			19,548			3,034
Revaluation of previously held equity interests		—			12,562			1,950
Impairments of long-term investments		8,000			65,432			10,155
Changes in operating assets and liabilities:
Accounts receivable		(514,830	)		(356,950	)		(55,398	)
Amount due from related parties		(12,571	)		(9,098	)		(1,412	)
Prepayments and other assets		(367,983	)		(1,230,303	)		(190,940	)
Other long-term assets		(62,308	)		(134,362	)		(20,853	)
Accounts payable		413,902			697,953			108,321
Salary and welfare payable		170,371			164,397			25,514
Taxes payable		38,321			21,916			3,401
Deferred revenue		734,362			509,174			79,023
Accrued liabilities and other payables		672,644			189,396			29,394
Other long-term liabilities		(13,558	)		(5,686	)		(882	)
Net cash provided by/(used in) operating activities		338,321			(2,024,278	)		(314,161	)
Cash flows from investing activities:
Purchase of property and equipment		(450,515	)		(603,001	)		(93,584	)
Purchase of intangible assets		(927,751	)		(2,015,992	)		(312,877	)
Purchase of short-term investments		(21,581,502	)		(45,832,390	)		(7,113,075	)
Maturities of short-term investments		19,891,098			40,173,128			6,234,772
Cash consideration paid for purchase of subsidiaries, net of cash acquired		(280,555	)		(230,770	)		(35,815	)
Cash paid for long-term investments including loans		(1,032,056	)		(4,310,998	)		(669,056	)
Repayment of loans from investees		3,500			534,125			82,895
Cash received from disposal/return of investments		75,171			45,842			7,115
Placements of time deposits		(7,825,593	)		(6,582,567	)		(1,021,598	)
Maturities of time deposits		4,603,670			6,728,120			1,044,188
Net cash used in investing activities		(7,524,533	)		(12,094,503	)		(1,877,035	)
Cash flows from financing activities:
Proceeds of short-term loans		200,000			1,034,797			160,598
Repayment of short-term loans		(100,000	)		(214,882	)		(33,349	)
Purchase of noncontrolling interests		(247,539	)		(58,488	)		(9,077	)
Capital injections from noncontrolling interests		103,450			2,040			317
Proceeds from exercise of employees’ share options		3			2			*
Proceeds from issuance of ordinary shares, net of issuance costs of US$563 and HKD337,143, respectively		2,817,458			19,288,423			2,993,516
Proceeds from issuance of convertible senior notes, net of issuance costs of US$13,857		5,594,779			—			—
Net cash provided by financing activities		8,368,151			20,051,892			3,112,005
Effect of exchange rate changes on cash and cash equivalents held in foreign currencies		(217,128	)		(140,983	)		(21,885	)
Net increase in cash and cash equivalents		964,811			5,792,128			898,924
Cash and cash equivalents at beginning of the period		4,962,660			4,678,109			726,031
Cash and cash equivalents at end of the period		5,927,471			10,470,237			1,624,955

* Less than 1.

F-7

BILIBILI INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

(All amounts in thousands)

	For the Nine Months Ended September 30,
	2020		2021		2021
	RMB		RMB		US$ Note 2(d)
Supplemental disclosures of cash flows information:
Cash paid for income taxes, net of tax refund		54,172		56,237		8,728
Cash paid for interest expense		50,251		77,667		12,054
Supplemental schedule of non-cash investing and financing activities:
Accretion to redeemable noncontrolling interests		5,964		—		—
Property and equipment purchases financed by accounts payable		104,700		393,431		61,060
Acquisitions and investments financed by payables		64,182		281,889		43,748
Intangible assets purchases financed by accounts payable		929,786		801,547		124,398
Issuance of ordinary shares in the business combination, purchase of noncontrolling interests and investment addition		612,492		829,748		128,775
Issuance of ordinary shares in connection with debt conversion		—		449,911		69,825

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

F-8

BILIBILI INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Operations

Bilibili Inc. (the “Company” or “Bilibili”), a company incorporated in the Cayman Islands on December 23, 2013 as an exempted company is an online entertainment platform for young generations. The Company, through its consolidated subsidiaries, variable interest entities (“VIEs”) and subsidiaries of the VIEs (collectively referred to as the “Group”), is primarily engaged in the operation of providing online entertainment services to users in the People’s Republic of China (the “PRC” or “China”).

As of September 30, 2021, the Company’s major subsidiaries, VIEs and subsidiaries of the VIEs are as follows:

Major Subsidiaries	Place and Year of Incorporation	Percentage of Direct or Indirect Economic Ownership	Principal Activities
Bilibili HK Limited	Hong Kong Y2014	100	Investment holding
Hode HK Limited	Hong Kong Y2014	100	Investment holding
Bilibili Co., Ltd.	Japan Y2014	100	Business development
Hode Shanghai Limited (“Hode Shanghai”)	PRC Y2014	100	Technology development
Shanghai Bilibili Technology Co., Ltd.	PRC Y2016	100	Technology development

Major VIEs and VIEs’ subsidiaries	Place and Year of Incorporation Acquisition	Percentage of Direct or Indirect Economic Ownership	Principal Activities
Shanghai Hode Information Technology Co., Ltd. (“Hode Information Technology”)	PRC Y2013	100	Mobile game operation
Shanghai Kuanyu Digital Technology Co., Ltd. (“Shanghai Kuanyu”)	PRC Y2014	100	Video distribution and game distribution
Sharejoy Network Technology Co., Ltd. (“Sharejoy Network”)	PRC Y2014	100	Game distribution
Shanghai Hehehe Culture Communication Co., Ltd. (“Shanghai Hehehe”)	PRC Y2014	100	Comics distribution
Shanghai Anime Tamashi Cultural Media Co., Ltd. (“Shanghai Anime Tamashi”)	PRC Y2015	100	E-commerce

F-9

BILIBILI INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

1. Operations (Continued)

Liquidity

The Group incurred net losses of RMB2,210.3 million and RMB4,713.0 million for the nine months ended September 30, 2020 and 2021, respectively. Net cash provided by and used in operating activities was RMB338.3 million and RMB2,024.3 million for the nine months ended September 30, 2020 and 2021, respectively. Accumulated deficit was RMB7,175.3 million and RMB11,876.6 million as of December 31, 2020 and September 30, 2021, respectively. The Group assesses its liquidity by its ability to generate cash from operating activities and attract investors’ investments. Historically, the Group has relied principally on both operational sources of cash and non-operational sources of financing from investors to fund its operations and business development. The Group’s ability to continue as a going concern is dependent on management’s ability to successfully execute its business plan, which includes increasing revenues while controlling operating expenses, as well as, generating operational cash flows and continuing to gain support from outside sources of financing. In the past, the Group has been continuously receiving financing support from outside investors. In 2020, the Company completed an offering of convertible senior notes due 2027 (the “2027 Notes”) raising US$786.1 million (RMB5,594.8 million), after deducting commissions and offering expenses, and the Company issued 17,310,696 Class Z Ordinary Shares to Sony Corporation of America, raising US$399.4 million (RMB2,817.5 million), after deducting offering expenses. On March 29, 2021, Bilibili successfully listed its Class Z ordinary shares on the main board of the Hong Kong Stock Exchange. The Company issued a total of 28,750,000 Class Z ordinary shares in the global offering, including the fully exercised over-allotment option of 3,750,000 Class Z ordinary shares on April 21, 2021. Net proceeds from the global offering, including the over-allotment option, after deducting underwriting fees and other offering expenses, were approximately HKD22.9 billion (RMB19.3 billion). Moreover, the Group can adjust the pace of its operation expansion and control the operating expenses. Based on the above considerations, the Group believes the cash and cash equivalents and the operating cash flows are sufficient to meet the cash requirements to fund planned operations and other commitments for at least the next twelve months from the date of the issuance of the unaudited interim condensed consolidated financial statements. The Group’s unaudited interim condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liquidation of liabilities in the normal course of business.

F-10

BILIBILI INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Significant Accounting Policies

a) Basis of presentation

The accompanying unaudited interim condensed consolidated financial statements of the Group have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for a complete set of financial statements. Certain information and note disclosures normally included in the annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted consistent with Article 10 of Regulation S-X.

The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited financial statements and include all adjustments as necessary for the fair statement of the Group’s financial position as of September 30, 2021, and the results of operations and cash flows for the nine months ended September 30, 2020 and 2021. The consolidated balance sheet at December 31, 2020 has been derived from the audited financial statements at that date but does not include all the information and footnotes required by U.S. GAAP. The unaudited interim condensed consolidated financial statements and related disclosures have been prepared with the presumption that users of the unaudited interim condensed consolidated financial statements have read or have access to the audited consolidated financial statements for the preceding fiscal years. Accordingly, these financial statements should be read in conjunction with the audited consolidated financial statements and related footnotes as of and for the year ended December 31, 2020. Results for the nine months ended September 30, 2021 are not necessarily indicative of the results expected for the full fiscal year or for any future period.

Significant accounting policies followed by the Group in the preparation of the accompanying unaudited interim condensed consolidated financial statements are summarized below.

b) Principles of consolidation

The unaudited interim condensed consolidated financial statements include the financial statements of the Company, its subsidiaries and VIEs for which the Company is the primary beneficiary.

Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half of the voting power, has the power to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of the board of directors, or has the power to govern the financial and operating policies of the investee under a statute or agreement among the shareholders or equity holders.

A consolidated VIE is an entity in which the Company’s subsidiary, through contractual arrangements, has the power to direct the activities that most significantly impact the entity’s economic performance, bears the risks of and enjoys the rewards normally associated with ownership of the entity, and therefore the Company’s subsidiary is the primary beneficiary of the entity.

All transactions and balances among the Company, its subsidiaries and VIEs have been eliminated upon consolidation.

There is no VIE in the Group where the Company or any subsidiary has a variable interest but is not the primary beneficiary.

F-11

BILIBILI INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Significant Accounting Policies (Continued)

c) Use of estimates

The preparation of the Group’s unaudited interim condensed consolidated financial statements in conformity with the U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent liabilities at the balance sheet date and reported revenues and expenses during the reported periods in the unaudited interim condensed consolidated financial statements and accompanying notes. Significant accounting estimates include, but are not limited to, determination of the average playing period for paying players, and assessment for the impairment of long-term investments accounted for using the measurement alternative.

d) Convenience Translation

Translations of balances on the unaudited interim condensed consolidated balance sheets, unaudited interim condensed consolidated statements of operations and comprehensive loss and unaudited interim condensed consolidated statements of cash flows from RMB into US$ as of and for the nine months ended September 30, 2021 are solely for the convenience of the reader and were calculated at the rate of US$1.00 = RMB6.4434, representing the noon buying rate in The City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York on September 30, 2021. No representation is made that the RMB amounts represent or could have been, or could be, converted, realized or settled into US$ at that rate on September 30, 2021, or at any other rate.

F-12

BILIBILI INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. Concentrations and Risks

a) Telecommunications service provider

The Group relied on telecommunications service providers and their affiliates for servers and bandwidth services to support its operations for the nine months ended September 30, 2020 and 2021 was as follows:

	For the Nine Months Ended September 30,
	2020			2021
Total number of telecommunications service providers		107			120
Number of service providers providing 10% or more of the Group’s servers and bandwidth expenditure		3			3
Total percentage of the Group’s servers and bandwidth expenditure provided by 10% or greater service providers		55	%		57	%

b) Foreign currency exchange rate risk

The functional currency and the reporting currency of the Company are U.S. dollars and RMB, respectively. The Group’s exposure to foreign currency exchange rate risk primarily relates to cash and cash equivalents, time deposits, short-term and long-term investments, and long-term debt denominated in the U.S. dollars. Most of the Group’s revenues, costs and expenses are denominated in RMB, while the long-term debt and a portion of cash and cash equivalents, time deposits, short-term and long-term investments are denominated in U.S. dollars. Any significant fluctuation of RMB against U.S. dollars may materially and adversely affect the Company’s cash flows, revenues, earnings and financial positions.

c) Credit risk

The Group’s financial instruments potentially subject to significant concentrations of credit risk primarily consist of cash and cash equivalents, time deposits, accounts receivable, and money market funds and financial products with variable interest rates referenced to performance of underlying assets issued by commercial banks and other financial institutions. As of December 31, 2020 and September 30, 2021, substantially all of the Group’s cash and cash equivalents and time deposits were held in major financial institutions located in the United States of America and China, which management consider being of high credit quality. Accounts receivable is typically unsecured and is primarily derived from revenue earned from mobile game services (mainly relates to remittances due from payment channels and distribution channels) and advertising services. There was no individual payment channel that had receivable balance exceeding 10% of the Group’s accounts receivable balance as of December 31, 2020 and September 30, 2021. One distribution channel had receivable balance exceeding 10% of the Group’s accounts receivable balance as of December 31, 2020 and September 30, 2021, respectively, as follows:

RMB in thousands	December 31, 2020		September 30, 2021
Distribution channel A		146,907		211,593

F-13

BILIBILI INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

3. Concentrations and Risks (Continued)

d) Major customers and supplying channels

No single customer represented 10% or more of the Group’s net revenues for the nine months ended September 30, 2020 and 2021.

The Group relied on a distribution channel to publish and generate the iOS version of its mobile games. Mobile game revenues generated through this distribution channel accounted for approximately 13% of the Group’s total net revenues for the nine months ended September 30, 2020, and there is no single distribution channel of mobile games generated 10% or more of the Group’s net revenues for the nine months ended September 30, 2021.

e) Mobile games

Mobile game revenues accounted for 45% and 28% of the Group’s total net revenues for the nine months ended September 30, 2020 and 2021, respectively.

One mobile game individually contributing more than 10% of the Group’s total net revenues for the nine months ended September 30, 2020 was as follows. No mobile games individually contributed more than 10% of the Group’s total net revenues for the nine months ended September 30, 2021.

	For the Nine Months Ended September 30,
	2020			2021
Mobile game 1		13	%		N/A

4. Prepayments and Other Current Assets

The following is a summary of prepayments and other current assets:

	December 31, 2020		September 30, 2021
	RMB in thousands
Prepayments for revenue-sharing cost*		782,518		1,052,535
Prepayments for sales tax		202,025		420,339
Inventories, net		160,006		356,388
Loans to investees or ongoing investments		187,672		186,513
Prepayments of marketing and other operational expenses		64,068		181,657
Prepayments to inventory suppliers		19,970		96,587
Deposits		51,661		81,667
Prepayments/receivables relating to jointly invested content		28,664		34,022
Prepayments for content cost		195,175		23,249
Interest income receivable		6,396		7,361
Others		67,632		85,273
Total		1,765,787		2,525,591

* App stores retain commissions on each purchase made by the users through the App stores. The Group is also obligated to pay ongoing licensing fees in form of royalties to the third-party game developers. Licensing fees consist of fees that the Group pays to content owners for the use of licensed content, including trademarks and copyrights, in the development of games. Licensing fees are either paid in advance and recorded on the balance sheets as prepayments or accrued as incurred and subsequently paid. Additionally, the Group defers the revenue from licensed mobile games over the estimated average playing period of paying players given that there is an implied obligation to provide on-going services to end-users. The related direct and incremental platform commissions as well as game developers’ licensing fees are deferred and reported in “Prepayments and Other Current Assets” on the unaudited interim condensed consolidated balance sheets.

F-14

BILIBILI INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5. Short-term Investments

The following is a summary of short-term investments:

	December 31,		September 30,
	2020		2021
	RMB in thousands
Financial products		2,866,643		8,082,156
Investments in publicly traded companies		434,609		1,288,907
Money market funds		55,937		68,248
Total		3,357,189		9,439,311

The Group recorded investment income of RMB29.9 million and RMB194.3 million related to short-term investments on the unaudited interim condensed consolidated statements of operations and comprehensive loss for the nine months ended September 30, 2020 and 2021, respectively.

6. Property and Equipment, Net

The following is a summary of property and equipment, net:

	December 31, 2020			September 30, 2021
	RMB in thousands
Leasehold improvements		118,581			193,268
Servers and computers		1,286,310			2,159,871
Others		30,750			48,297
Total		1,435,641			2,401,436
Less: accumulated depreciation		(673,700	)		(1,037,628	)
Net book value		761,941			1,363,808

Depreciation expenses were RMB227.8 million and RMB371.2 million for the nine months ended September 30, 2020 and 2021, respectively. No impairment charge was recognized for any of periods presented.

F-15

BILIBILI INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

7. Intangible Assets, Net

The following is a summary of intangible assets, net:

	As of December 31, 2020
	Gross carrying value		Accumulated amortization			Net carrying value
	RMB in thousands
Licensed copyrights of content		4,556,683		(2,891,742	)		1,664,941
License rights of mobile games		299,786		(119,493	)		180,293
Intellectual property and others		753,282		(241,557	)		511,725
Total		5,609,751		(3,252,792	)		2,356,959
	As of September 30, 2021
	Gross carrying value		Accumulated amortization			Net carrying value
	RMB in thousands
Licensed copyrights of content		6,231,069		(4,018,309	)		2,212,760
License rights of mobile games		434,634		(205,570	)		229,064
Intellectual property and others		1,195,125		(377,712	)		817,413
Total		7,860,828		(4,601,591	)		3,259,237

Amortization expenses were RMB888.8 million and RMB1,348.5 million for the nine months ended September 30, 2020 and 2021, respectively. No impairment charge was recognized for any of periods presented.

F-16

BILIBILI INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

8. Long-term Investments, Net

The Group’s long-term investments primarily consist of equity investments accounted for using the measurement alternative, equity investments accounted for using the equity method and other investments accounted for at fair value.

	December 31, 2020		September 30, 2021
	RMB in thousands
Equity investments using the measurement alternative		1,791,393		3,102,798
Equity investments accounted for using the equity method		188,199		168,650
Investments accounted for at fair value		253,346		914,664
Total		2,232,938		4,186,112

Equity investments using the measurement alternative

The Group did not disclose the fair value of alternative measure method investments if it is not practicable to estimate the fair value of its alternative measure method investments for which a quoted market price is not available due to both excessive cost as well as lack of available information on fair value of such investments. Specifically, many of the investees are start-up companies in China and operate in emerging industries for which the Group has not been able to estimate their fair values. For those equity investments having observable price changes in orderly transactions for the identical or similar investments of the same issuers, the Group would disclose the fair value of the alternative measure method investments.

Nil and RMB12.6 million re-measurement loss of equity investments accounted for using the measurement alternative was recognized for the nine months ended September 30, 2020 and 2021, respectively.

Equity investments accounted for using the equity method

RMB5.7 million and RMB19.5 million of the Group’s proportionate share of equity investee’s net loss, was recognized in “Investment income/(loss), net” for the nine months ended September 30, 2020 and 2021, respectively.

Investments accounted for at fair value

Investments accounted for at fair value primarily include financial products with variable interest rates referenced to performance of underlying assets and with original maturities great than one year and investments in publicly traded companies with an intention of holding greater than one year. A gain of RMB15.2 million and a loss of RMB175.7 million resulted from the change in fair value was recognized in “Investment income/(loss), net” for the nine months ended September 30, 2020 and 2021, respectively.

The Group also received cash dividends of nil and RMB26.5 million from certain investees for the nine months ended September 30, 2020 and 2021, respectively.

The Group recorded impairment charges for long-term investments of RMB8.0 million and RMB65.4 million as “Investment income/(loss), net” for the nine months ended September 30, 2020 and 2021, respectively, as the Group determined the fair value of these investments was less than their carrying value.

F-17

BILIBILI INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

9. Taxation

Composition of income tax

The following table presents the composition of income tax expenses for the nine months ended September 30, 2020 and 2021:

	For the Nine Months Ended September 30,
	2020			2021
	RMB in thousands
Current income tax expenses		32,606			54,341
Withholding income tax expenses		12,943			12,702
Deferred tax benefits		(6,941	)		(4,541	)
Total		38,608			62,502

The Group’s effective tax rate for the nine months ended September 30, 2020 and 2021 was -1.8% and -1.3%, respectively. The effective tax rate is based on expected income and statutory tax rates. For interim financial reporting, the Group estimates the annual tax rate based on projected taxable income for the full year and records a quarterly income tax provision in accordance with the guidance on accounting for income taxes in an interim period. The Group did not incur any interest and penalties related to potential underpaid income tax expenses.

F-18

BILIBILI INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

10. Taxes Payable

The following is a summary of taxes payable as of December 31, 2020 and September 30, 2021:

	December 31, 2020		September 30, 2021
	RMB in thousands
VAT payable		50,881		45,168
EIT payable		31,181		37,793
Withholding individual income taxes for employees		20,465		32,090
Withholding income tax payable		18,300		30,316
Others		6,365		3,054
Total		127,192		148,421

F-19

BILIBILI INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

11. Accrued Liabilities and Other Payables

The following is a summary of accrued liabilities and other payables as of December 31, 2020 and September 30, 2021:

	December 31, 2020		September 30, 2021
	RMB in thousands
Accrued marketing expenses		783,455		886,910
Payables to producers and licensors		63,307		418,513
Leasing liabilities-current portion		150,402		197,477
Consideration payable for acquisitions and investments		125,363		189,607
Professional fees		38,573		69,658
Deposits		14,791		38,617
Interest payable		14,041		24,223
Other staff related cost		13,872		23,356
Advances from/payables to third parties		5,869		17,935
Others		28,003		51,529
Total		1,237,676		1,917,825

12. Long-term Debt

2026 Notes

In April 2019, the Group issued US$500.0 million of 2026 Notes with an interest rate of 1.375% per annum. The net proceeds to the Company from the issuance of the 2026 Notes were US$488.2 million (RMB3,356.1 million), net of issuance costs of US$11.8 million (RMB81.1 million). The 2026 Notes may be converted, at an initial conversion rate of 40.4040 ADSs per US$1,000 principal amount (which represents an initial conversion price of US$24.75 per ADS) at each holder’s option at any time prior to the close of business on the second business day immediately preceding the maturity date of April 1, 2026.

The issuance costs of the 2026 Notes were amortized to interest expense over the contractual life to the maturity date (i.e., April 1, 2026). For the nine months ended September 30, 2020 and 2021, the 2026 Notes related interest expense was US$6.4 million (RMB44.5 million) and US$6.3 million (RMB40.5 million), respectively.

F-20

BILIBILI INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

12. Long-term Debt (Continued)

2027 Notes

In June 2020, the Group issued US$800.0 million of 2027 Notes with an interest rate of 1.25% per annum. The net proceeds to the Company from the issuance of the 2027 Notes were US$786.1 million (RMB5,594.8 million), net of issuance costs of US$13.9 million (RMB98.6 million). The 2027 Notes may be converted, at an initial conversion rate of 24.5516 ADSs per US$1,000 principal amount (which represents an initial conversion price of US$40.73 per ADS) at each holder’s option at any time prior to the close of business on the second business day immediately preceding the maturity date of June 15, 2027.

The issuance costs of the 2027 Notes were amortized to interest expense over the contractual life to the maturity date (i.e., June 15, 2027). For the nine months ended September 30, 2020 and 2021, the 2027 Notes related interest expense was US$3.9 million (RMB27.1 million) and US$8.9 million (RMB57.8 million), respectively.

As of December 31, 2020 and September 30, 2021, the principal amount of 2026 Notes was RMB3,262.5 million and RMB2,784.6 million, respectively. The unamortized debt issuance costs were RMB58.1 million and RMB42.8 million as of December 31, 2020 and September 30, 2021, respectively.

As of December 31, 2020 and September 30,2021, the principal amount of 2027 Notes was RMB5,219.9 million and RMB5,188.3 million, respectively. The unamortized debt issuance costs were RMB83.3 million and RMB73.5 million as of December 31, 2020 and September 30, 2021, respectively.

The following table provides a summary of the Company’s unsecured senior notes as of December 31, 2020 and September 30, 2021:

	December 31,		September 30,		Effective interest rate
	2020		2021
	Amounts		Amounts
	RMB in thousands
2026 Notes		3,204,309		2,741,803		1.74	%
2027 Notes		5,136,613		5,114,777		1.52	%
Carrying value		8,340,922		7,856,580
Unamortized discount and debt issuance costs		141,448		116,292
Total principal amounts of unsecured senior notes		8,482,370		7,972,872

F-21

BILIBILI INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

13. Share-based Compensation

As of September 30, 2021, total unrecognized compensation expenses related to unvested awards granted under the Global Share Plan and the 2018 Plan, adjusted for estimated forfeitures, was RMB4,621.6 million, which is expected to be recognized over a weighted-average period of 4.0 years and may be adjusted for future changes in estimated forfeitures.

The following table presents a summary of the Group’s share options activities for the nine months ended September 30, 2021:

	Total Number of shares			Weighted Average Exercise Price
	(In thousands)			US$
Outstanding at January 1, 2021		22,297			2.0236
Granted		3,551			0.0001
Exercised		(2,533	)		0.0001
Forfeited		(233	)		0.0001
Outstanding at September 30, 2021		23,082			1.9548
Exercisable at September 30, 2021		1,339			0.0001

The weighted average grant date fair value of share options granted for the nine months ended September 30, 2021 was RMB457.8 (US$70.6) per share, respectively.

F-22

BILIBILI INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

14. Net Loss per Share

For the nine months ended September 30, 2020 and 2021, the Company had potential ordinary shares, including share options granted and ordinary shares issuable upon the conversion of the 2026 Notes and 2027 Notes, where applicable. As the Group incurred losses for the nine months ended September 30, 2020 and 2021, these potential ordinary shares were anti-dilutive and excluded from the calculation of diluted net loss per share.

For the nine months ended September 30, 2020, the numbers of share options and the number of ordinary shares issuable upon the conversion of the 2026 Notes and 2027 Notes, which were anti-dilutive and excluded from the computation of diluted net loss per share, were 7,297,562 shares, 20,202,000 shares and 19,641,280 shares, respectively.

For the nine months ended September 30, 2021, the numbers of share options and the number of ordinary shares issuable upon the conversion of the 2026 Notes and 2027 Notes, which were anti-dilutive and excluded from the computation of diluted net loss per share, were 13,143,917 shares, 19,164,376 shares and 19,641,280 shares, respectively.

The following table sets forth the computation of basic and diluted net loss per share for the nine months ended September 30, 2020 and 2021:

	For the Nine Months Ended September 30,
	2020			2021
	RMB in thousands, except for share and per share data
Numerator:
Net loss		(2,210,306	)		(4,712,972	)
Accretion to redeemable noncontrolling interests		(4,292	)		—
Net loss attributable to noncontrolling interests		30,693			11,758
Net loss attributable to Bilibili Inc.’s shareholders for basic/dilutive net loss per share calculation		(2,183,905	)		(4,701,214	)
Denominator:
Weighted average number of ordinary shares outstanding, basic		343,156,614			376,073,065
Weighted average number of ordinary shares outstanding, diluted		343,156,614			376,073,065
Net loss per share, basic		(6.36	)		(12.50	)
Net loss per share, diluted		(6.36	)		(12.50	)

F-23

BILIBILI INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

15. Related Party Transactions and Balances

The Group entered into the following significant related party transactions for the periods presented:

	For the Nine Months Ended September 30,
	2020		2021
	RMB in thousands
Purchases of goods and services		5,895		56,494
Acquire of long-term investments		110,039		—
Purchase of noncontrolling interests		257,288		—
Sales of goods and services		2,725		11,078

The Group had the following significant related party balances as of December 31, 2020 and September 30, 2021, respectively:

	December 31, 2020		September 30, 2021
	RMB in thousands
Amount due from related parties
Due from an investment fund		74,235		51,135
Due from other investees		90,497		1,418,959
Total		164,732		1,470,094
Amount due to related parties		—		84,117

F-24

BILIBILI INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

16. Acquisitions

Transactions with one animation content production company (“Anime Business”)

Prior to 2021, the Group held 8.1% equity share of Anime Business through several investments with preferred rights, which was accounted for as long-term investments using alternative measure method. In January 2021, the Group acquired remaining equity with the total consideration of RMB612.3 million, including the cash consideration of RMB369.1 million and 400,000 restricted Class Z ordinary shares. Upon the completion of this transaction in January 2021, the Group held 100% of equity interests in the Anime Business, which became a consolidated subsidiary of the Group.

The consideration of acquisition of Anime Business was allocated based on their fair value of the assets acquired and the liabilities assumed as follows:

	Amount		Amortization Period
	RMB in thousands
Net assets acquired		189,763
Intangible assets
—Brand		85,000		8 years
—Vendor relationship		75,000		10 years
—Non-compete clause		54,000		6 years
Goodwill		283,402
Total		687,165

Total purchase price comprised of:

	Amount
	RMB in thousands
Cash consideration		369,124
Share consideration		243,203
Fair value of previously held equity interests		74,838
Total		687,165

Goodwill arising from this acquisition was attributable to the synergies between ability of animation content production and the Group’s strategy to expand its content library.

F-25

BILIBILI INC.

NOTES TO UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)

16. Acquisitions (Continued)

Other acquisitions

For the year ended December 31, 2020, and for the nine months ended September 30, 2021, the Group completed several other acquisitions, to complement its existing businesses and achieve synergies. The acquired entities individually and in aggregate were insignificant. The Group’s other acquisitions were summarized in the following table:

	For the Year Ended December 31, 2020			For the Nine Months Ended September 30, 2021			Amortization Period
	Amount
	RMB in thousands
Net assets/(liabilities) acquired		18,495			(33,466	)
Intangible assets
—Projects		69,000			64,000			3 to 4.5 years
—Copyrights		49,000			2,100			3 to 10 years
—Non-compete clause		—			12,000			6 years
—Vendor relationship		86,000			—			10 years
—Others		700			1,500			5 years
Noncontrolling interests		(44,064	)		—
Deferred tax liabilities		(49,140	)		—
Goodwill		283,760			54,321
Total		413,751			100,455

Total purchase price comprised of:

	For the Year Ended December 31, 2020		For the Nine Months Ended September 30, 2021
	Amount
	RMB in thousands
Cash consideration		295,323		76,900
Share consideration		118,428		23,555
Total		413,751		100,455

Pro forma results of operations for all the acquisitions have not been presented because they were not material to the consolidated statements of operations and comprehensive loss for the years ended December 31, 2020 and to the unaudited interim condensed consolidated financial statements for the nine months ended September 30, 2021, either individually or in aggregate.

17. Subsequent Events

The Group has evaluated subsequent events through the date the unaudited interim condensed consolidated financial statements are issued, with no other material events or transactions identified that should have been recorded or disclosed in the unaudited interim condensed consolidated financial statements.

F-26