Key Takeaways:
Bilibili Inc. reported a 62% year-over-year increase in first-quarter adjusted net profit to $84.9 million, as a 30% surge in advertising revenue offset a persistent decline in its mobile games business.
"Our performance in the first quarter demonstrates the strong momentum we brought into 2026," Rui Chen, Chairman and Chief Executive Officer of Bilibili, said in a statement. "As user value deepens, commercialization follows as a natural extension of our ecosystem."
The Chinese video platform's total net revenues grew 7% from a year ago to $1.08 billion for the quarter ended March 31, according to its official results. Advertising was the standout performer with revenue climbing to $375.3 million, while mobile games revenue dropped 12% to $220.7 million.
The results highlight Bilibili's successful pivot toward advertising as its primary growth engine, even as its user base expansion slows and its stock remains down roughly 20% year-to-date. The company is now strategically increasing its investment in AI to boost advertising efficiency and content creation.
Bilibili's advertising segment has become its largest revenue source, accounting for about 35% of the total. The company cited strong demand from advertisers in the game, e-commerce, and digital appliance sectors. Revenue from AI-related clients saw a particularly sharp increase of 170% year-over-year.
The growth in advertising helped push the company's gross profit margin to 37.1%, its 15th consecutive quarter of margin expansion. However, the gaming division, once Bilibili's core business, continued to struggle. The company attributed the 12% revenue decline to a "high base effect" from the exceptional performance of the game San Guo: Mou Ding Tian Xia in the same period last year.
User growth showed a mixed picture. Daily active users (DAUs) grew 8% to 115 million and engagement hit a record high with average daily time spent approaching two hours. However, monthly active users (MAUs) grew just 2.2% to 376 million, indicating a potential ceiling in attracting new users against fierce competition from rivals like Tencent and ByteDance.
The company's increased spending on artificial intelligence was reflected in a 9% rise in research and development expenses to $133.5 million. Bilibili stated it plans to strategically invest incremental profits into AI to enhance its advertising algorithms and content generation tools.
The report signals that Bilibili's path to sustained profitability relies heavily on maximizing its advertising potential and leveraging AI. Investors will be watching closely to see if the high-growth ad business can consistently outweigh the volatility in gaming and content, with the next earnings report expected in August.
This article is for informational purposes only and does not constitute investment advice.
