BILIBILI 2026 Q2
Earnings Overview & AI Insights

Earnings Performance

Summary of Financial Performance: Bilibili delivered solid Q2 2026 results with total revenue up 8% year over year to RMB 7.9 billion. Advertising was the largest and fastest-growing segment, rising 28% to RMB 3.1 billion; VAS grew 5% to RMB 3.0 billion; game revenue fell 14% to RMB 1.4 billion due to a tough comparison. Gross profit increased 10% to RMB 3.0 billion, with gross margin expanding to 37.2% for the 16th consecutive quarter of improvement. Operating profit rose 48% to RMB 373 million, adjusted operating profit rose 21% to RMB 696 million, and adjusted net profit increased 25% to RMB 704 million, with adjusted net margin at 8.9%. Cash, cash equivalents, time deposits, and short-term investments totaled RMB 24.3 billion.

Company Outlook & Strategy: Management emphasized continued focus on the “content, community, and commercialization” flywheel, with AI as a key enabler. The company expects advertising to maintain healthy growth despite macro pressure and believes gaming revenue should return to year-over-year growth starting in Q4 as new titles launch. Mid- to long-term targets remain unchanged: gross margin of 40%–45% and operating margin of 15%–20%. Management reiterated disciplined AI investment focused on video understanding, distribution, and creation, while continuing share repurchases to enhance shareholder value.

Key Industry Trends: Management described a shift toward users seeking “substance over noise,” favoring higher-quality, longer-form, and more meaningful content. AI is expected to accelerate content supply across the industry, making content quality and recommendation efficiency more important. In advertising, broader demand from AI-related advertisers and branded campaigns highlights Bilibili’s strength as a platform for younger, high-intent consumers. Macro weakness in China remains a headwind, but Bilibili said its user base and community make it a resilient advertising destination.

Operational Highlights: DAUs rose 7% to 117 million, MAUs reached 371 million, and average daily time spent increased to 113 minutes from 105 minutes a year ago. Total time spent grew over 14%, and watch time for videos longer than 5 minutes rose 18%. Monthly interactions reached 17.4 billion, long comments increased more than 67%, and official members reached 299 million with about 80% 12-month retention. Creator activity strengthened, with daily video submissions up 28%, creators with over 1,000 followers up 30%, and average creator income up 21%. Advertising efficiency improved, with CTCVR up 19% year over year and search revenue doubling. The gaming pipeline is expanding with Lumi Master slated for global launch on Sept. 17, a new licensed SLG title planned for Q4, and three additional titles announced for next year. The company also launched NCard and is refining it for retention and ROI. Premium members reached 25.7 million, and fan charging revenue rose nearly 50%.

Challenges & Risks: Management noted ongoing macroeconomic pressure on consumer spending in China and a higher comparison base for gaming revenue. Game monetization remains uneven until new launches ramp. AI investment will continue to weigh on R&D in the near term, with about 70%–80% of the previously announced RMB 1 billion AI-related capex already deployed, mostly for server computing power, implying about RMB 500 million of 2026 R&D expense impact. Management also acknowledged the need to balance AI spending with monetization and maintain disciplined capital allocation.

Key Analyst Questions & Responses: Analysts asked about Bilibili’s resilience amid the short-form video shift, ad growth in a weak macro environment, the game pipeline, AI’s role across the business, AI capex timing, and margin outlook. Management responded that Bilibili is not competing on content length but on high-quality content and authentic community engagement, which attract intentional user time. For ads, the company highlighted its young, purchase-ready user base, multi-scenario inventory expansion, and strong AI advertiser demand. On games, management said Q2–next year is a “harvesting season,” with Lumi Master, San Guo, and other IP-based titles expected to drive growth, while San Mou remains a long-life-cycle franchise. On AI, they reiterated a narrow focus on video understanding, distribution, and creation, citing material gains in recommender efficiency and creator productivity. On margins, management reaffirmed confidence in profitability expansion, aided by ad mix, AI-driven efficiency, and game pipeline recovery, while continuing opportunistic share buybacks; total repurchases year to date were about USD 180 million, including USD 31 million under the new USD 300 million program.