Bilibili's New Era: AI and Ads Drive Return to Profit in Q1 2026

SHANGHAI – May 19, 2026 – Bilibili Inc., the iconic video community for China's youth, announced a significant financial turnaround in its first-quarter 2026 results, posting a net profit of RMB202.0 million (US$29.3 million). The result marks a pivotal shift from the net loss reported in the same period last year and signals the growing success of the company's refined monetization strategy.

The return to profitability was powered by a formidable 30% year-over-year surge in advertising revenue and record-high user engagement, with daily users now spending nearly two hours on the platform. The strong performance underscores Bilibili's evolution from a niche, gaming-focused platform to a diversified entertainment ecosystem increasingly adept at converting its vibrant community into sustainable financial growth.

“Our performance in the first quarter demonstrates the strong momentum we brought into 2026,” said Mr. Rui Chen, Chairman and Chief Executive Officer of Bilibili. “As user value deepens, commercialization follows as a natural extension of our ecosystem. We are poised to translate this momentum into sustained growth and compounding value over the long term.”

An Advertising Engine Firing on All Cylinders

The standout metric from Bilibili's first quarter was the explosive growth in its advertising business. Revenues from advertising soared to RMB2.59 billion (US$375.3 million), a 30% increase from the prior year. This performance significantly outpaces the broader Chinese digital advertising market, which is projected to grow by a more modest 6.1% in 2026. Bilibili's growth even eclipses that of established internet giants like Tencent, which reported a respectable but lower 20% growth in its own advertising segment for the same period.

This outperformance is not accidental but the result of a deliberate strategy. The company credits the growth to “improved advertising product offerings and enhanced advertising efficiency.” Bilibili has been systematically integrating more sophisticated ad formats, opening up valuable search traffic to advertisers, and leveraging its data to improve targeting. This allows brands to connect more effectively with the platform's highly engaged, and often hard-to-reach, young audience without disrupting the core community experience.

Mr. Sam Fan, Bilibili's Chief Financial Officer, highlighted this acceleration, noting that the company remains committed to driving profitability. The results suggest that the platform's long-standing effort to balance user experience with commercialization is bearing fruit, turning its massive and loyal user base into a powerful and scalable revenue stream.

AI as the Core Growth Catalyst

Underpinning much of Bilibili's recent success in both user engagement and advertising is its deepening investment in artificial intelligence. CEO Rui Chen emphasized this in his remarks, stating, “Today, AI is accelerating every aspect of this flywheel by transforming content creation, discovery and commercial efficiency.” This was reflected in the company's financials, with research and development expenses rising 9% year-over-year to RMB921.1 million, an increase primarily attributed to expanded AI investment.

On the content front, Bilibili is rolling out tools to empower its massive creator base. Initiatives like "Codename H," an AI tool that helps creators generate video from text and audio scripts, are designed to lower the barrier to entry for high-quality content production. For users, AI refines the all-important recommendation algorithms, ensuring the 115.2 million daily active users are consistently served content that keeps them on the platform longer.

For advertisers, AI is the key to unlocking efficiency. The company's B-Data marketing center uses AI to help brands model audiences, monitor sentiment, and optimize budget allocation. This technological prowess has directly translated into higher ad spending, with a reported 40% year-over-year increase in spending aimed at deep conversion, a testament to the system's effectiveness. JPMorgan recently upgraded the company's stock, citing confidence that its AI roadmap will continue to drive both user engagement and revenue gains.

A Strategic Pivot Beyond Gaming

While the advertising segment boomed, Bilibili's financial report also revealed a continued strategic shift in its revenue composition. Mobile games revenue, once the company's primary cash cow, declined 12% year-over-year to RMB1.52 billion (US$220.7 million). The company attributed this to a “high base effect” from the exceptional performance of its blockbuster title San Guo: Mou Ding Tian Xia in the prior year, which is now settling into a more mature life cycle.

However, this decline is part of a larger, healthier narrative of diversification. The company is no longer solely reliant on hitting the jackpot with a blockbuster game. Instead, it is cultivating a more balanced portfolio of revenue streams. The company is actively managing its gaming pipeline with highly anticipated titles like “NCard” and “Lumi Master” slated for release in 2026. Furthermore, Bilibili is moving towards more in-house game development, a strategy aimed at capturing higher margins and exercising greater creative control over its intellectual property.

Meanwhile, its Value-Added Services (VAS) segment, which includes premium memberships and live streaming, posted steady 4% growth to RMB2.91 billion, demonstrating the consistent, recurring revenue potential of its loyal user base. This evolving revenue mix showcases a more resilient and mature business model, less susceptible to the hit-or-miss nature of the gaming industry.

The Bedrock of a Thriving Community

All of Bilibili's commercial success is built on one unshakeable foundation: its deeply engaged community. The first-quarter results show this foundation is stronger than ever. Average daily active users (DAUs) grew a healthy 8% to 115.2 million, while monthly active users (MAUs) surpassed 376 million.

Perhaps the most telling statistic is the time users commit to the platform. The average daily time spent per user surged by 11 minutes year-over-year to reach 119 minutes. This near-two-hour daily engagement is the envy of the social media world and is a direct result of Bilibili's "community-first" philosophy, pioneered through features like its signature “bullet chatting” live comments.

This intense loyalty and time commitment create a virtuous cycle. It attracts top-tier content creators, fosters a vibrant culture, and provides a highly valuable audience for both advertisers and the company’s own value-added services. It is this sticky ecosystem that allows Bilibili to increase ad loads and push commercialization without alienating its core base.

Disciplined Growth and Investor Confidence

Beyond the headline profit number, Bilibili's report is filled with signs of increasing financial discipline. The company's gross profit margin expanded for the 15th consecutive quarter, reaching 37.1%, indicating greater efficiency in its operations and monetization. Total operating expenses grew by only 3%, well below the 7% revenue growth, showcasing strong operating leverage.

Further bolstering investor confidence, Bilibili announced the completion of its US$200 million share repurchase program. Such programs are often a signal that management believes its stock is undervalued and reflects a commitment to returning capital to shareholders. With a healthy balance sheet showing RMB24.19 billion (US$3.51 billion) in cash and short-term investments, Bilibili is well-capitalized to continue its strategic investments in AI and content while maintaining its path toward sustained profitability.

As Bilibili successfully navigates this new chapter, it presents a compelling case study in platform evolution. By leveraging its unique community as a launchpad for a diversified, AI-powered business model, the company is proving it can not only capture the hearts and minds of China's youth but also deliver compounding value for its shareholders.