Bilibili Q1 Report: Advertising Booms, Games Stagnate

```

On May 19, Bilibili released its financial report for the first quarter ended March 31, 2026. The report shows that Bilibili achieved total revenue of 7.47 billion yuan in the first quarter, up 7% year-on-year, slightly higher than the market average expectation of 7.46 billion yuan; adjusted net profit was 585 million yuan, up 62% year-on-year.

This financial report continues Bilibili’s growth momentum since achieving its first full-year profit in 2025, but also reveals the uneven performance among different business segments.

Specifically, Bilibili’s total revenue for the first quarter was 7.47 billion yuan, up 7% year-on-year. The growth rate was slightly slower compared to the previous quarter, but considering that Q1 is typically a relatively slack season for the internet industry, the quarter-on-quarter decline is normal fluctuation.

Adjusted net profit was 585 million yuan, a year-on-year increase of 62%, with the adjusted net profit margin rising from 5.2% in the same period last year to 7.8%. The gross margin has increased for the 15th consecutive quarter, reaching 37.1%, up 0.8 percentage points from last year.

Overall expenses were controllable. Specifically, sales and marketing expenditure was 1.153 billion yuan, down 1% year-on-year; R&D expenditure was 921 million yuan, up 9% year-on-year, with the report noting that the increase was mainly due to expansion in AI investments.

Net profit recorded was 202 million yuan, turning from a loss to a profit year-on-year. In the same period last year there was a net loss of about 10.7 million yuan. By the end of the first quarter, the company's combined cash and equivalents, time deposits, and short-term investments totaled 24.19 billion yuan, indicating relatively ample cash reserves.

By business segment, the four major divisions show an obvious “one strong, others weak” pattern.

The advertising business is the highlight of this financial report. Advertising revenue in the first quarter was 2.59 billion yuan, up 30% year-on-year, maintaining rapid year-on-year growth for the 13th consecutive quarter, and accounting for about 35% of total revenue.

Looking at industry structure, the top five contributors to ad revenue were gaming, internet services, digital appliances, e-commerce, and automotive; the boom in AI applications drove related ad income up 170% year-on-year, while home and interior ad revenue increased 130% year-on-year.

Bilibili, relying on its young user base and community content ecosystem, is becoming one of the mainstream advertising platforms for industries such as AI and gaming. However, whether high growth in advertising can be sustained still depends on the macroeconomic environment and overall advertiser budgets.

Value-added services revenue was 2.91 billion yuan, up 4% year-on-year, a relatively mild growth rate. Live streaming maintained steady growth, with the number of premium members reaching 24.77 million, about 80% of whom are annual subscribers or auto-renewal users.

As the largest revenue source, this segment accounts for 39% of total revenue. Its low-speed growth means Bilibili needs to find new momentum in membership benefits and live streaming monetization.

Mobile gaming revenue was 1.52 billion yuan, down 12% year-on-year. This decline was mainly due to the high base effect from “Three Kingdoms: Strategy Under Heaven” in the same period last year.

The report notes that revenue from long-running games such as “FGO” and “Azur Lane” remains steady, “Three Kingdoms: Strategy Under Heaven” has launched overseas and holds a top 4 position in iOS sales, and new title “Escape from Duckov” has exceeded 4 million in sales. However, the overall gaming pipeline still needs new titles to sustain momentum, and whether it can rebound in the second half of the year remains to be seen.

IP derivatives and other income was 448 million yuan, down 4% year-on-year. The segment is small, with limited impact on overall performance.

On the user side, average daily active users in Q1 reached 115.2 million, up 8% year-on-year; average monthly active users were 376 million, up 2.2% year-on-year. Average daily usage time increased to 119 minutes, a record high, up 11 minutes year-on-year. Monthly interactions exceeded 17 billion, and the 12th month membership retention rate remained stable at 80%. For creators, the number of UPs with more than 1,000 fans grew over 30% year-on-year, and per capita income increased 24% year-on-year.

According to the data, Bilibili’s core user stickiness and community activity continue to improve. But MAU only grew 2.2% year-on-year, and compared to 2025 DAU growth slowed, reflecting a shrinking space for user increment.

With competition from platforms like Douyin, Kuaishou, and Video Account, whether Bilibili can continue to expand its user base is a question for its long-term growth.

Bilibili’s profitability improvement relies heavily on the growth of its high margin advertising business. Notably, the company explicitly stated it would strategically invest part of its incremental profits into AI in 2026, mainly focusing on optimizing ad algorithms, content understanding, AIGC tool iterations, and talent team building.

Brokers estimate AI-related investments will impact profits by 500 million to 1 billion yuan. The 9% year-on-year growth in R&D expense this quarter already reflects this trend. In the short term, AI investment will erode profits somewhat; whether it can improve operational efficiency and commercialization ability in the long term remains to be tracked.

Overall, Bilibili’s Q1 report shows that a positive cycle between community ecosystem and commercialization is gradually being established. However, whether high ad growth can cover the gap from declining games, how long the AI investment payback period is, and whether user growth can reaccelerate remain unanswered questions in its valuation logic.

Risk Warning and DisclaimerThe market involves risks, and investment should be approached with caution. This article does not constitute personal investment advice, nor does it take into account the special investment objectives, financial situations, or needs of individual users. Users should consider whether any opinions, viewpoints, or conclusions herein fit their specific circumstances. Investing based on this article is at your own risk. ```