Bilibili Q1 Turnaround with Profit of 202 Million Yuan, Advertising Revenue Up 30%

Bilibili announced its unaudited financial results for the first quarter of 2026 on Tuesday, with total net revenue for the quarter reaching 7.47 billion yuan, a year-on-year increase of 7%.

There was a significant improvement in profitability. The net profit for the first quarter was 202 million yuan, compared to a net loss of 10.7 million yuan for the same period last year; adjusted net profit was 585.4 million yuan, a year-on-year increase of 62%. Gross profit was 2.77 billion yuan, a year-on-year increase of 9%, with the gross margin rising from 36.3% last year to 37.1%.

Advertising Growth, Decline in Gaming

Advertising was the main source of growth this quarter. Advertising revenue for the first quarter was 2.59 billion yuan, a year-on-year increase of 30%. The company attributed this mainly to the optimization of advertising products and the improvement of advertising efficiency.

User data also supports the growth in advertising. The average daily active users for the first quarter was 115.2 million, a year-on-year increase of 8%; the average daily usage duration was 119 minutes, an increase of 11 minutes compared to the same period last year; monthly active users exceeded 376 million.

Bilibili's Chairman and CEO, Chen Rui, stated that user engagement in the first quarter reached a new high, with average daily usage time close to two hours and total user time growing by 19% year-on-year. He also mentioned that AI is accelerating content creation, content discovery, and business efficiency.

Mobile gaming revenue for the first quarter was 1.52 billion yuan, a year-on-year decrease of 12%. The company explained that the main reason was the outstanding performance of "Three Kingdoms: Strategy Decides the World" last year, which formed a high base, and the product has now entered a stable and mature life cycle.

Continuous Improvement in Gross Margin

Costs remained relatively controllable. The cost of revenue for the first quarter was 4.7 billion yuan, a year-on-year increase of 5%, lower than the growth rate of total revenue; of which, revenue sharing costs were 2.85 billion yuan, a year-on-year increase of 7%.

Due to the relatively stable costs related to platform operations, Bilibili's gross margin continued to increase. The company's CFO, Fan Xin, stated that the gross margin for the first quarter reached 37.1%, marking the 15th consecutive quarter of expansion.

Operating profit also showed a significant improvement. The operating profit for the first quarter was 166.8 million yuan, a year-on-year increase of 1011%; adjusted operating profit was 523.9 million yuan, a year-on-year increase of 53%.

AI Investment Increases R&D Expenses

Total operating expenses for the first quarter were 2.61 billion yuan, a year-on-year increase of 3%. Of this, sales and marketing expenses were 1.15 billion yuan, a year-on-year decrease of 1%; general and administrative expenses were 532.7 million yuan, a year-on-year increase of 3%.

R&D expenses were 921.1 million yuan, a year-on-year increase of 9%. The company stated that the increase in R&D expenses mainly stemmed from an expansion in AI investment, partially offset by cost control.

This is also a key variable for future profit margins. If AI investment continues to enhance advertising efficiency and content distribution efficiency, it will support business improvement; however, if the return on investment slows down, it may also drive up cost pressure again.