Bilibili's revenue increased by 7.6% in the first half of 2026: a surge in advertising revenue offset the pressure, while game revenue declined year-on-year.

On August 27, Bilibili released its Q2 2026 results: revenue of RMB 7.94 billion, gross profit of RMB 2.955 billion, and basic earnings per share of RMB 0.82. Compared with the same period in 2025, revenue increased by approximately 8.2%, and gross profit increased by approximately 10.4%, with profit growth continuing to outpace revenue growth.

Based on revenue and gross profit, Bilibili's gross profit margin for the quarter was approximately 37.2%, an increase of about 0.7 percentage points from 36.5% in the same period last year, but basically flat compared to 37.1% in the first quarter of this year. After several consecutive quarters of recovery, the improvement in gross profit margin continues, although the rate of increase has become more moderate.

Earnings per share (EPS) requires careful distinction in accounting methods. The company's basic EPS under U.S. GAAP for the quarter was RMB 0.82, compared to RMB 0.52 in the same period of 2025; adjusted basic EPS was RMB 1.58, higher than the market's previous expectation of approximately RMB 1.51, and also higher than RMB 1.34 in the same period last year. These two metrics should not be used interchangeably; the adjusted method primarily excludes non-cash items such as equity incentives.

In terms of revenue performance, the growth rate this quarter was lower than the 20% in the same period of 2025. This is related to the high base of the game business last year, and it also shows that after the revenue scale exceeded 7 billion yuan, Bilibili's growth focus is further shifting to the monetization efficiency of existing businesses such as advertising, membership and live streaming.

Previous business trends had already indicated this shift. In the first quarter of 2026, Bilibili's advertising revenue was 2.589 billion yuan, a year-on-year increase of 30%; value-added service revenue was 2.912 billion yuan, a year-on-year increase of 4%; and mobile game revenue was 1.523 billion yuan, a year-on-year decrease of 12%.

The pressure on games is mainly due to the fact that "Three Kingdoms: Strategy" has entered a mature operation stage and has a high base of users in the same period, while advertising has become a more definite source of incremental growth.

Advertising growth is related to user scale, traffic allocation, and delivery efficiency. Over the past year, Bilibili has increased its commercial inventory across video playback pages, search, and other scenarios, and has applied algorithms and generative AI to content creation and ad matching. However, whether ad load rates can be improved without significantly impacting the community experience remains a question that needs continuous monitoring during the commercialization process.

Bilibili's user base continues to grow. In the first quarter of this year, Bilibili's daily active users reached 115.2 million, an increase of 8% year-on-year, with an average daily usage time of 119 minutes; the corresponding figures for the second quarter of 2025 are 109.4 million and 105 minutes respectively.

Longer usage time provides room for advertising and value-added services, but whether user growth can be steadily converted into revenue depends on advertisers' budgets and willingness to pay.

The profit improvement did not come entirely from revenue growth. In the past few years, Bilibili has reduced some content and operating costs, controlled sales expenses, and increased the revenue share of relatively high-margin businesses such as advertising and games.

However, the company's R&D expenses increased by 9% year-on-year to 921 million yuan in the first quarter of this year, mainly due to investment in artificial intelligence. Whether the new investment can be converted into user efficiency and commercial returns will affect the speed of subsequent profit release.

On the capital front, Bilibili launched a new $300 million share repurchase program in June. As of the end of June, the company had repurchased approximately 1.9 million listed securities under the program, costing approximately $31.3 million; in the first half of this year, it repurchased approximately 4.8 million shares, costing approximately $100 million. While repurchases help reduce share dilution, judging operational quality still requires closer examination of net profit, operating cash flow, and the performance of its core business.

Overall, Bilibili continued its trend of moderate revenue growth and improved profit margins this quarter, with results slightly exceeding market expectations. However, single-quarter data is insufficient to demonstrate a renewed acceleration in revenue growth.

The sustainability of advertising growth, the cycle of new game releases, the paid performance of value-added services, and the actual impact of AI investment on costs and efficiency will continue to determine the quality of the second half of the year's performance.

Risk Warning and DisclaimerInvesting involves risk; please exercise caution. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their specific circumstances. Any investment decisions made based on this information are at your own risk.