Bilibili's Q2 net profit surged 55%, with advertising becoming the growth engine and gross margin improving for 16 consecutive quarters | Financial Report Insights

Bilibili's performance continued to improve in the second quarter: revenue maintained growth, advertising business accelerated, and profits saw a significant improvement.

On August 27, Bilibili released its unaudited financial results for the second quarter of 2026, ending June 30. During the period, the company achieved revenue of RMB 7.94 billion, a year-on-year increase of 8%; net profit was RMB 339 million, a year-on-year increase of 55%, with the net profit margin rising from 3.0% in the same period last year to 4.3%. Non-GAAP adjusted net profit was RMB 704 million, a year-on-year increase of 25%, with the adjusted net profit margin further increasing to 8.9%.

User growth and activity levels remained robust. Daily active users (DAU) reached 116.5 million in the second quarter, a 7% year-on-year increase; monthly active users reached 371 million, with users spending an average of 113 minutes per day, driving a 14% year-on-year increase in total user time spent. According to CEO Chen Rui, in an era of "abundant content but scarce attention," the emotional connection between high-quality content and users is becoming a crucial competitive advantage for Bilibili.

Advertising: Leading the growth rate and becoming the primary engine of revenue growth.

Advertising revenue continued to be Bilibili's most impressive growth driver. Second-quarter advertising revenue reached 3.13 billion yuan, a year-on-year increase of 28%, accounting for nearly 40% of total revenue and becoming the largest revenue source among its four major business segments.

The rapid growth in advertising revenue is mainly attributed to the continuous optimization of the advertising product matrix and improved campaign efficiency. Despite pressure on the overall advertising market, Bilibili's advertising still achieved nearly 30% growth, demonstrating that the platform's user value realization and monetization efficiency are accelerating.

In terms of revenue structure, advertising has gradually grown from a relatively weak segment to one of Bilibili's core revenue sources. With the continuous iteration of advertising products and algorithms, its growth has further strengthened its contribution to the company's overall performance.

Value-added services are growing steadily, while the gaming business is under short-term pressure.

Value-added services (VAS) revenue in the second quarter was RMB 2.97 billion, up 5% year-on-year.

The growth in value-added services (VAS) primarily stemmed from increased revenue from premium memberships and other value-added services. Compared to the high growth of advertising revenue, VAS growth was relatively moderate, but as a mature core business for Bilibili, its stability remains crucial. With the continued expansion of the paying user base, the membership system remains a vital support for monetizing the platform's content ecosystem.

The gaming business was the only segment to decline this quarter. Mobile game revenue in Q2 was 1.39 billion yuan, a 14% year-on-year decrease. The company explained that this was mainly due to the high revenue base contributed by "Three Kingdoms: Strategy" in the same period last year, and that the game has now entered a relatively stable and mature stage. Under the influence of the high base, the gaming business will still face certain pressure in the short term.

In the first half of the year, Bilibili's game revenue totaled 2.91 billion yuan, lower than the 3.34 billion yuan in the first half of 2025. For the game business, whether it can launch new hit products and generate revenue will be key to whether the segment can resume growth.

Gross margin has improved for 16 consecutive quarters, and operating leverage has been further released.

Improved profitability remains a key highlight of this quarter's results.

Bilibili's cost of revenue in the second quarter was RMB 4.98 billion, a year-on-year increase of 7%, lower than the revenue growth rate of 8%, which led to a gross profit of RMB 2.95 billion, a year-on-year increase of 10%, and the gross profit margin further increased from 36.5% in the same period last year to 37.2%. This marks the 16th consecutive quarter that Bilibili's gross profit margin has improved year-on-year.

In terms of cost structure, revenue sharing costs reached 3.08 billion yuan, a year-on-year increase of 4%, remaining the largest cost item. Total operating expenses amounted to 2.58 billion yuan, a year-on-year increase of 7%, with the overall growth rate also lower than the revenue growth rate. Among them, sales expenses were 1.06 billion yuan, a year-on-year increase of only 1%; administrative expenses were 510 million yuan, basically flat compared to the same period last year; and R&D expenses were 1.01 billion yuan, a year-on-year increase of 16%, mainly affected by the increase in server depreciation expenses.

While revenue continued to grow, expense expansion was controlled, further releasing operating leverage. In the second quarter, the company's operating profit reached 373 million yuan, a year-on-year increase of 48%, with profit growth significantly outpacing revenue growth. CFO Fan Xin stated that the company will continue to maintain investment discipline and actively reward shareholders through stock buybacks. As of 2026, Bilibili has cumulatively purchased approximately US$118 million worth of shares through its buyback program.

Overall, the core change in Bilibili's second-quarter performance has shifted from "narrowing losses" to "profit release": high advertising growth supported revenue, gross margin continued to improve, and cost control released operating leverage, while the game business remains the relatively pressured part of the current performance.

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