Bilibili Reports Q1 2026 Results: Full Earnings Call Transcript

Bilibili (NASDAQ:BILI) held its first-quarter earnings conference call on Tuesday. Below is the complete transcript from the call. This transcript is brought to you by Benzinga APIs. For real-time access to our entire catalog, please visit https://www.benzinga.com/apis/ for a consultation. Access the full call at https://edge.media-server.com/mmc/p/zprk2zfn/ Summary Bilibili reported a 7% year-over-year growth in total revenues to RMB 7.5 billion, with a gross profit up 9% and a gross margin of 37.1%. The company achieved a 30% year-over-year increase in advertising revenue, driven by high user engagement and AI-integration efforts. User engagement metrics were strong, with average daily time spent increasing by 11 minutes year over year and total user time spent rising 19%. AI investments focused on enhancing video understanding, distribution, and creation, contributing to user growth and improved advertising efficiency. Game revenues faced a 12% decline year-over-year, but new titles are in development, with positive feedback received from soft launches. Bilibili maintained its strategy of long-term game operations, focusing on creating games that resonate with the younger generation. The company completed a US dollar 200 million share repurchase program and is considering renewing it to enhance shareholder returns. Management expressed confidence in continued growth, with a focus on leveraging AI to drive efficiencies and innovation across its businesses. Full Transcript Chen 15 million and MAUs increased to 376 million. Average daily time spent reached a new high of 119 minutes, up 11 minutes year over year, which led to a 19% surge in total user time spent. We see this level of engagement as a powerful engine for our commercial business. In the first quarter, we delivered robust advertising revenue growth of 30% year over year, further accelerating from 2025. Meanwhile, MPUs increased by 7% year over year to 34.4 million. As more users directly pay for content and services they truly care about. On our platform, this commercial momentum led to a strong financial performance. Total revenues grew 7% year over year to RMB 7.5 billion. Gross profit was up 9% year over year and gross margin reached 37.1%, marking our 15th consecutive quarter of margin expansion. Thanks to our top line growth and increased operating leverage, our operating profit was over 10 times what it was a year ago. On a non GAAP basis, net profit grew by 62% year over year, with our adjusted net profit margin expanding to 7.8%. To us, this set of results confirms a fundamental shift in user behavior. In a world full of quick hits, more users are choosing to spend more time on quality content. That is exactly what Bilibili stands for and it will continue to drive our growth. With our average user now around 26.5 years old, our cohort is starting to spend more and spend better. As their needs evolve, we are staying close to them, offering the products and experiences they care about most. The content ecosystem we have built remains our most durable asset. Today, we are using AI to make this ecosystem even more powerful. We are focusing our investments on three key how we understand videos, how we recommend them, and how we help creators build them. Ultimately, we are not just evolving with AI, we are using it to reinforce the very thing that makes Bilibili unique. Having said that, we remain very disciplined with our capital. Although AI requires an upfront investment, the returns in engagement and monetization are already tangible. At the same time, AI is driving meaningful efficiencies across our operations, which is directly supporting our margin expansion. By combining the heart of our community with the power of our technology, we are creating lasting value for our users and shareholders. With that, let me walk you through our core pillars of content community and commercialization. Starting with Content and Community as content options multiply, users are becoming even more selective. They are coming to Bilibili for high quality PUGV content and a unique community experience that they cannot find anywhere else. Across our content categories, ACG remains our Cultural anchor in the first quarter, watch time for games in Chinese anime grew 27% and 20% year over year respectively, proving our enduring appeal to the younger generation. Beyond our ACG legacy, knowledge based content, including AI related information grew 20% year over year as users turned to us for deeper insights. Music categories also saw robust growth with a 25% year over year increase in time spent largely driven by AIGC. Music consumption related categories kept rising with watch time for parenting and early education and outdoor related categories surging by more than 50% year over year. The breadth of our content library is only one part of the story. Our deeper competitive moat lies in the humanity of the community. Every month our users generate over 17 billion real human interactions. In an AI driven world, they are the most authentic human signals available. While high quality data is becoming a global scarcity, our hundreds of billions of organic interactions provide us with the gold standard for understanding true human preferences. This profound insight is what fuels our engagement and loyalty. In the first quarter, total user time spent rose 19% year over year and 291 million official members maintained an 80% 12 month retention rate. Meanwhile, we continue to see AI as an amplifier for our ecosystem's flight. On the supply side, the unique creative spirit of our community has found new momentum through the AI powered tools that scale creativity across the platform. By lowering the barriers to entry and boosting productivity, we have seen a significant influx of creators in content. In Q1, the number of daily active creators and daily submissions grew by 6% and 19% year over year respectively. But this isn't just a game of volume. With AI assisting the creative process, more talent is producing high quality breakout content right out of the gate. Our recent AI creation contest is a perfect example. We attracted the most talented creators to join our platform, creating nearly 150 breakout works with over a million views each. By deepening our comprehension of both content and user behavior, we've made content discovery more efficient, directly accelerating growth for our creators. In the first quarter, the number of creators with over 1,000 followers grew by more than 30% year over year and those with 10,000, 100,000 and 1 million or more followers each grew over 20%. Naturally, as their audiences grow, earnings follow. Average income per creator rose 24% this quarter, creating a powerful, virtuous cycle. Now let us take a closer look at our commercial businesses and their progress. First, our advertising business once again delivered standout results. In Q1, revenues grew 30% year over year, reaching RMB 2.6 billion. This ongoing acceleration reflects the value of our community that we continue to unlock and how we are turning user engagement into real results for advertisers. In Q1, our top five ad verticals were gains Internet Services, Digital products and home appliances, E commerce and automotive game ads delivered strong incremental revenue growth this quarter. In the Internet services sector, AI advertisers kept scaling with ad budgets surging over 170% year over year. At the same time, our maturing user base is also capturing more advertisers budgets. Ad revenues from digital products and home appliances and automotive both grew over 30% year over year. In Q1, home decoration was a particular standout with ad spending jumping more than 130% year over year. Using AI to improve efficiency and drive ad business is a core priority this year. By integrating AI more deeply into our algorithms, we've gained much sharper insights into user interests and long term patterns. This clarity has meaningfully optimized how we match users with ads, resulting in a 25% year over year increase in CTCVR of performance based ads this quarter. Furthermore, our AIGC tools are streamlining creative production and crafting ads that resonate with users, helping advertisers connect with our community more effectively and drive higher click through rates. We are also unlocking growth across diverse platforms and touchpoints. In the first quarter, ad revenues from PC and OTT platforms grew by over 50% year over year while new scenarios like search and mini programs more than doubled. We're exploring new integrated formats within video player, finding new ways to turn user time into commercial value. With expanding traffic, diverse new scenarios and continuous efficiency gains, we remain confident in the sustained momentum of our ad business. Now turning to our games business. Game revenues were RMB 1.5 billion, down 12% year over year and flat quarter over quarter. The year over year decline was mainly due to the high base set by Sun Mo Din Tianxia in the same period last year, while the latest seasons of Sun Mo performed steadily quarter over quarter, we're focused on the game's long term life cycle, keeping the experience balanced and the IP strong. Meanwhile, our evergreen titles FGO and Azure Land remain stable and continue to provide a solid revenue base in 2026. We're building on Sun Mo's success and expanding our presence in the Three Kingdoms IP. In April we soft launched NCard, a lighter casual card game that has received positive feedback on its core gameplay. We're iterating the product and optimizing user acquisition as we prepare for its official launch this July. Meanwhile, our new SLG title San Wanguozhi Wang Dao Tianxia began initial testing in late March. Built on the original IP with enhanced 3D visuals, Sanwang targets a differentiated group of SLG fans and complements Sun Mo. Early user feedback was encouraging and we plan to roll the game out late this year. Beyond End Card and Sanhwang, our self developed simulation game Lumi Master Shyoba Lumi Master entered its paid testing in May. It has been well received for its cozy art style and accessible gameplay and we plan to bring it to Global gamers in Q4 this year. Our jointly operated pipeline for the coming quarters is also expanding into more genres, giving us broader player coverage and a more balanced portfolio. Turning to our VAS business, VAS revenue grew by 4% year over year to RMB 2.9 billion in 20Q1. We kept refining our live broadcasting operations, delivering a stable performance with improved gross margin. Premium members reached 24.8 million by the end of the first quarter, up 5% year over year. Around 80% are on annual or auto renewal plans. Our found charging program also kept growing at a healthy pace. Revenue was up over 50% year over year, driven by stronger creator user relationships and users growing willingness to directly support content they love. In April we published our 2025 ESG report outlining our continued focus on high quality content, healthy community development and steady improvements in governance and operations. Given our reach and influence among China's young generation, we take this responsibility very seriously and we have maintained our A rating by MSCI reflecting our consistent approach to long term sustainable growth. To close, we believe great content and a strong community bring people together. The value we have built is just beginning to show its potential. With AI as the accelerator, our community and commercial ecosystems are reinforcing each other more than ever. We will stay focused on strengthening that flywheel and investing in areas that support long term growth. Taking Bilibili to the next level we are excited about what is ahead. With that I will turn the call over to Sam to walk through our financials in more detail. Sam Thank you Mr. Chen. Hello everyone, this is Sam. In the interest of time on today's call, I will review our first quarter highlights. We encourage you to refer to our press release issued earlier today for a closer look at our results. Total revenues for the first quarter was RMB 7.5 billion, up 7% year over year. Our total revenues breakdown by revenue stream for Q1 was approximately 39% VAs, 35% advertising, 20% mobile games and 6% from our IP derivatives and other businesses. Our cost of revenues increased by 5% year over year to RMB 4.7 billion in the first quarter, while our gross profit rose 9% year over year to RMB 2.8 billion. Our gross profit margin reached 37.1% in Q1, up from 36.3% in the same period last year, marking our 15th consecutive quarter of margin expansion. In the first quarter, we continued to improve monetization efficiency with disciplined spending. Our total operating expenses were up 3% year over year to RMB 2.6 billion. Sales and marketing expenses decreased by 1% year over year. GNA expenses increased by 3% and R&D expenses increased by 9%, primarily due to expanded AI investments and partially offset by efficient spending control. Our operating profit was RMB167 million, up over 10 times year over year. Our adjusted operating profit reached RMB524 million and our adjusted operating profit margin reached 7.0% in the first quarter versus 4.9% in the same period a year ago. Net profit was RMB202 million versus an RMB11 million net loss in Q1 2025. Our adjusted net profit was RMB585 million, up 62% year over year and our adjusted net Profit margin was 7.8%, improved from 5.2% in the same period a year ago. As of March 31, 2026, we had cash and cash equivalents, time deposits and short term investments of RMB 24.2 billion or US dollar 3.5 billion. In Q1, we repurchased 2.5 million shares for a total cost of 60.3 million under our US dollar 200 million share repurchase program. As of today, we have completed this share repurchase program, purchasing a total of 9.9 million shares. We remain committed to enhancing long term shareholder return and our board is considering renewing the share repurchase program at an appropriate time. Thank you for your attention. We would now like to open the call to your questions Operator, please go ahead. Lincoln Kong (Equity Analyst) Thank you management for taking my question. Congrats on a very solid first quarter result. My question is about the community. So we have seen a user metrics continue to deliver stellar performance. So how significant is this? AI has been a driver in terms of the user acquisition and engagement duration. Also, what's our perspective on the strategic role that sort of this AI created assisted creation tools has played with the Bilibili's Content ecosystem. Thank you. Chen What's really driving our user growth and time span is still Bilibili's rich supply of high quality content and our very unique community experience. AI doesn't change that fundamental logic. If anything, it's making our strength even stronger. So from a high quality content supply perspective, as I mentioned last quarter, AI is bringing greater leverage. Sa. Operator Ladies and gentlemen, please remain on the line. Your conference will resume shortly. Chen Pushing their expression boundaries and unleash so much more productivity. That's why you're saying during the first quarter that the average daily active content creator at their daily submission grew by 6% and 19% year over year respectively. And it's not just about efficiency. AI is not only helping us to increase supply, but we are seeing it bringing so much quality into our content offering. For example, in some category, AI is already fundamentally changing how content gets made. For example, in the film industry it requires a full crew to work on shooting and production and post production area. But now with the help of AI, we only need one or two very poor production and creativity people and they can make the equivalent or even better content. So. Another example would be music. In the traditional music industry it requires the full crew and team to work on music productions. But now with the help of AI, just one talented content creator can make very high quality music content. That's why we're very delighted to see the in the past some categories that was very hard and expensive to make. Now with the help of AI, those talented content creator can make this production very easily. In our most recent AI creation context, we're seeing that AIGC videos are very very impressive in terms of the quality that over this contest we saw over 150 videos, each surpassed 1 million views. In summary, we are seeing that AI is bringing so much more quality and quantity into the PUGV field. And another booster is that AI amplifies the power of bilibilli community. In a community like Bilibilly where user Love content, know what they want, have high standards, have strong taste. High quality content is naturally more likely to stand out. Every we're seeing AI is making that effect even more stronger. Every month our user generates more than 17 billion real human interactions on bilibili. And in the AI era this kind of human, real human feedback and tagging is becoming even more valuable. And like I said, those tagging, those feedbacks are from people who know what they want, who has strong taste and have high desire for high quality content. So our internally developed model, we are spending a lot of time to making it understand what is high quality content and identify those high quality content. At a much earlier stage. We are seeing this ability to directly translate on creators followers growth. In the first quarter, the number of content creator with more than 1,000 followers who buy over 30% year over year creators that weighed 10,000 100,000 and 1 million followers also grew by more than 20% year over year. As creators get more followers, they also make more money. In Q1, average income per creator is up 24% year over year. To summarize, AI is making our great content creator even more powerful and buildabilly is the home to many of the most creative creators, the one who really wanted to express themselves and build lasting connection with users. Over the years we've built a very strong creator ecosystem and community culture and AI is really amplifying that effect. And we believe this historical opportunity of AI can bring the opportunity that makes visibility 10 times more valuable. And we will really invest and heat that opportunity for us. Thank you operator, next question please. Thank you. Operator Thank you. We will now take our next question from Daniel Chun of JP Morgan. Please ask your question. Daniel, your line is open. Daniel Chun (Equity Analyst) So my question is on the advertising revenue. So we see that the ad revenue growth accelerates to 30% year via in the first quarter which is very strong. May we know which industry or the ads product actually exceed your expectation? Also, how should we expect the outlook for the second quarter and the full year advertising revenue? Thank you. Chen Our Advertising revenue reported RMB 2.6 billion in the first quarter up 30% year over year, marking our 13th consecutive quarter of a double digit growth. At the very core, the biggest driver behind our advertising growth is still the value of Biblice community and our users. The average age of our user is about 26.5 years old. Which means they're entering a stage of life where both personal spending power and household decision making power are rising rapidly. And that is exactly the kind of high value user group advertisers are most eager to reach. And what set us apart from platform that's purely traffic driven is that the value of advertising on bilibili is never one off spending. Instead we run much deeper into users mindshare. We help brands to move from a single one off impression to repeated continuous touch points and from a single isolated transaction to build lasting brand equity. That is exactly why we saw a continuous growth of our advertising efficiency during Q1. Our brand ads, performance ads and native ads all delivered a strong double digit growth and for certain categories is in high double digit growth. And for Q1 our top five advertising verticals were Games, Internet services, Digital products and home Appliances, E Commerce and automotive. Well looking ahead into Q2 and onwards is that we do see a deeper integration of AI into our advertising system will continue to improve our advertising ad efficiency in the near term. But more importantly we believe the bigger value will come from the long term transformation that AI can bring to ad business. This year we continue to improve both distribution efficiency and recommendation algorithm. We have further leveled up our ability to understand user interest, purchase intent and our content themselves. By plugging this into our recommendation models, we can now match user content and ads so much more precisely. That's the reason why you see the strong growth in our advertising revenue in Q4 and this is driving a more accurate matching capability delivered in a strong CPC VR growth for our performance app. In the first quarter. We are also providing advertisers with more automated campaign management and AI powered creative tools to help them to improve ad delivery efficiency. In Q1 penetration of our automated ad spending increased to about 85% and we will continue to see this penetration to further increase into Q1 and for the rest of the year. On top of that the AIGC tools are helping advertisers to create materials that perfectly vibe with bilibili. Community style and the adoption of AIGC Creative continue to increase. At the same time these AIGC creators are delivering much better ad performances with improved click through rate generally around double digit better. That summarizes how AI is helping us to improve our ad efficiency. I will be sharing more information on X quarter and going forward. We believe there's so much more that AI can bring into our ad system and on top of that we're also expanding ad inventory across different screens and more user scenarios from the mobile app to our PC, iPad, OTT and in car screens and we currently are cover a majority of bad scenarios and on different products or ad scenarios. We are also trying new inventories from feed to search comments and in player ads and mini programs. This is covering Bilibili's users time spent across the major product touch points. This will bring in additional ad inventory and add volume for our business. Well on top of that at inventory and scenario growth. Our strategy across different ad industry is also very important and we will continue to deepen our services into different industry verticals by aligning our sales operation tech capabilities. We can now offer a full stack solution tailored to each specific industry. Looking into the second half of this year, we expect stronger growth momentum from those high value categories such as AI technology, automotive, home decoration and appliances which we believe will continue to lead a very strong growth. Meanwhile, we will also continue to expand our market share in our core verticals such as games, E commerce and education. Chen So to summarize, we remain confident in maintaining a very healthy advertising growth for the rest of the year. Thank you Operator. Next question please. Thank you. Operator We will now take our next question from Yang Liu of Morgan Stanley. Please ask your question. Yang, your line is open. Yang Liu (Equity Analyst) Let me translate my question. My question is about the game segment. Could management comment on the 3 Kingdom NCard's soft launch performance and what is our expectation for this game and also another self developed game Lumimaster started the paid test this month. What's the test result and what is the expectation on launch timing and another game 3 Kingdom Wang Dao Tianxia how to expect this game contribution and could management comment if there's any other game pipeline except for the three game I mentioned before. Thank you. Chen The NCard soft launch performance is generally in line with expectation. We plan to official launch this game in July this year. This game is one of a kind game and the first of its kind that features a very unique gameplay system that blends hero skills with poker mechanism. From the soft launch feedback our user we find this gameplay has resonate with young user group quite nicely. Because this theme is very creative and innovative. We take the approach to iterate the game as we launch. As we collect more user feedback, we believe this is a more sustainable approach to make this game even better. We believe this game has the potential to become a large dau title that can last for a very long time in this casual category and we believe it has the right elements to get to that. So we are putting a lot of resource and hoping the scheme will continue to reflect define its gameplay and operation. By the time it's ready we will be launching it to a mass audience. Well as we mentioned the NKAR three Kingdoms I will briefly touch upon the San Wanguozhi title. So the San Wanguozhi title is a very juicy unique SLG title based on the very authentic 3 Kingdom IP by Kale and this game has stayed true to the original Three Kingdoms IP experience while introducing so much refreshed 3D visual style. It's targeting a more mature SLG audiences and have higher taste towards the game's quality and visual experience. We think Sanwon and Sanmo really complements each other but with a differentiate target user group where Sangwon is targeting to the IP fans who have strong taste and preferences towards better visual quality where Sunmo targets a younger cohort that doesn't want to spend so much time and money into the SLG title. That is the reason why after launching Sunmo we choose another title choose to license another title in the three Kingdom ip. We think these two title has great synergies and really complement each other. We already completed the first round of beta test paid testing at the end of March for San Wanguozhi title and we saw very positive user feedback and we are currently continuing refine and polishing the title and listening closely to user feedback and we are planning to launch this title within this year. Next I'll talk about our self developed game Lumi Master. For Lumi Master it is also one of its kind, the very first title that combines pet catching with casual gameplay. We started a global user testing in early May this year and we have received a very encouraging user feedback and we are targeting a global launch for this title in Q4 this year. Lastly, I wanted to briefly touch upon Escape from Dot Cog which is a bilibili self development title. This year we broke another record by selling over 4 million copies of this game. As we continue to promote this game on the PC front, we are actively working on the console version and the mobile version. Our goal is to continue to enhance the IP and over time make this game as make this IP Escape from Doc Op IP become a well known franchise for young gamers. Over the past few years I've been sharing our game strategy. I think it summarized to three points. One is Long Term Operation. We've seen that into our legacy title FGO and Azure Lane which are celebrating its 10th year anniversary and 9th year anniversary respectively this year and Sunmo is going to celebrate its second year anniversary very soon and going forward for all bilibili game title we are targeting a very long term operation even for console one off games like Escape from dot gov. We're hoping this game will have lasting impact when we continue to generate cells over time. So Long Term Operation is definitely One of the most important strategy for our game business. And the second strategy is to become the leader in the segment genre. So first of all our strategy into game genre is very very focused. We will be deciding a good direction we will dig deep into this genre to become either the best or the first in this genre. For example the SLG, the 3 Kingdom IP we've launched one game, we have two in the pipeline and we have more that's coming up potentially in the near future we will build a three Kingdom universe. Another example is the console game, the PC copy based game. This is also a direction we believe has very large opportunity opportunity and strong user demand and we will be focusing to produce the best or become the first in its own kind. This will be another important strategy for our game business. The last one is we're creating games for the young generation of gamers. We believe that for all game business that focusing on young user is a must and as a young generation community hub where the platform that is closest to this young cohort and understanding their desire inventing games to cater to their preferences is bilibili bread and butter and by staying close to the young generation there will always be good opportunities. This is showing on our end card and our loomie master titles. Fundamentally we are just creating a new title. We are creating or reinventing this title to catering to this title generation of gamers that fits their tastes the best. So by staying close to the young gamers we believe this brings us so much more opportunity. So that concludes this question and this question. I'll put our next question please. Operator Thank you. Our next question comes from Xue Qing Zhang of cicc. Please ask your question. Xue Ting, your line is open. Xue Qing Zhang (Equity Analyst) Thanks management for taking my question and my question about financials last quarter company mentioned that it would increase investments in AI commencement progress achieved so far. When should we expect to see meaningful returns from its AI investments? Also, could you provide some color on the outlook for OPEX and the CAPEX related to AI as well as the margin outlook for the second quarter and the full year? Thank you. Sam Thanks xuexin Dear Sam, I will take this question first of all about the direction of our AI investment as mentioned by Mr. Chen we are very focused primarily on keywords of bidibili video. We are investing three main areas video understanding, video distribution and video creation. We believe this investment will significantly enhance the value of BIDI B's content ecosystem and community and directly benefit all monetization lines in Q1 we have already began expanding, exploring and applying these efforts. We see initiative results, evidence in our DU growth, user time spent growth and advertising revenue growth. We expect this positive feedback loop has just begun and will continue to deliver greater efficiency. Regarding to the capex in Q1 our capex increased about 80% year over year around 200 million RMB, mainly driven by higher investment in servers and computing resources to support AI improvements. For the full year we expect our AI related capex to increase by approximately 1 billion RMB with an impact on P&L of around 500 million RMB. Meanwhile, we will cut certain OPEX expenses to offset part of such impact. Using our Q1 result as an example, when we see R and D expenses increase by 9% year over year while we still deliver solid bottom line results driven by revenue growth and continued operating leverage, our adjusted net profit increased by 62% year over year with the adjusted net profit margin rising to 7.8%. We expect Q2 advertising revenue to maintain rapid growth with the contribution from AI initiatives with gross margin steadily improving and the net profit margin have further room to increase. We also maintain our mid to long term gross margin target to 45% and operating profit ratio target of 15 to 20% and chat thank you for this question. Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.