Bilibili (NASDAQ:BILI) reported higher revenue, expanding profitability and continued advertising momentum in the second quarter of 2026, as the company highlighted growing user engagement and investments in artificial intelligence tools for content creation, recommendation and advertising.
Total revenue rose 8% year over year to RMB 7.9 billion, while gross profit increased about 10% to RMB 3.0 billion. Gross margin expanded to 37.2% from 36.5% a year earlier, marking the company’s 16th consecutive quarter of margin improvement, according to Chief Financial Officer Sam Fan.
User Engagement and Community Metrics
Chairman and Chief Executive Officer Rui Chen said the company’s community and top-line growth remained healthy during the quarter. Daily active users increased 7% year over year to 117 million, while monthly active users reached 371 million. Average daily time spent increased to 113 minutes from 105 minutes a year earlier, helping lift total time spent by more than 14%.
Chen said users continued to spend more time with longer and more substantive videos. Watch time for videos longer than five minutes rose 18% year over year. Watch time for gaming content increased 20%, general entertainment grew 35%, baby and maternity content rose 36%, and music content increased 24%, aided by AI-generated content.
Daily video submissions increased 28% year over year in the second quarter. The number of creators with more than 1,000 followers rose 30%, while average creator income increased 21%, Chen said.
Monthly community interactions grew 9% to 17.4 billion. Long comments of more than 100 characters increased more than 67%, while the average active user followed 96 creators, up 11% from a year earlier. Bilibili ended the quarter with 299 million official members and approximately 80% 12-month retention.
Chen said Bilibili’s strategy is centered on high-quality content rather than choosing between short- and long-form video formats. He said the growth of AI-generated video could make video supply increasingly abundant, raising the importance of content quality and effective distribution.
Advertising Becomes Largest Revenue Source
Advertising revenue increased 28% year over year to RMB 3.1 billion, representing Bilibili’s 14th consecutive quarter of advertising growth above 20%. Advertising accounted for approximately 39% of total revenue, making it the company’s largest revenue contributor, Fan said.
The five largest advertising categories in the quarter were games, consumer electronics and home appliances, internet services, e-commerce and automotive. Revenue from home decoration, footwear and apparel, and automotive advertisers each increased more than 60% year over year. Revenue from AI-sector advertisers more than doubled.
Chief Operating Officer Carly Li said that, despite pressure on China’s consumer environment, advertisers increasingly recognize the value of Bilibili’s user base and community. She said the average Bilibili user is about 26.5 years old and that advertisers are prioritizing conversion efficiency, sustained brand impact and audiences with purchasing power.
The company said its AI-driven advertising capabilities improved click-through conversion rate, or CTCVR, by 19% year over year in the second quarter. Search advertising revenue doubled from a year earlier, while new ad inventory across in-app search, watch pages, smart TVs, PCs and mini-programs generated revenue growth of more than 50% in the first half, Li said.
Games Revenue Declines, Pipeline Expands
Mobile games revenue fell 14% year over year to RMB 1.4 billion, primarily because of a high comparison base from the prior year’s performance of Sanmo, the company’s Three Kingdoms strategy game. Chen said the title’s second-anniversary Season 15 performed well and ranked No. 2 on China’s iOS top-grossing chart.
Bilibili said legacy games including Fate/Grand Order and Azur Lane delivered stable results. The company launched casual card game N-Card in July and plans to introduce its second season in October, with a focus on retention and additional gameplay features.
The company also outlined several forthcoming game releases:
- Lumi Master: A self-developed simulation and pet-catching game scheduled for a global launch on Sept. 17.
- Sanwang: A licensed Three Kingdoms strategy title planned for release in the fourth quarter.
- Ragnarok Online 3, MISTBOUND: Guild Wars Card Game, and Three Kingdoms: The Ravages of Time: Titles expected to be released next year.
Fan said Bilibili expects gaming revenue to resume year-over-year growth beginning in the fourth quarter, supported by its upcoming title pipeline.
AI Investment, Margins and Capital Returns
Management said its AI investments are focused on video understanding, video distribution and video creation. Chen said AI is helping creators work more efficiently and is intended to improve recommendation, search and advertising matching across the platform.
Fan said the company had completed roughly 70% to 80% of its previously disclosed RMB 1 billion AI-related capital expenditure plan during the first half, primarily through purchases of server computing resources. He said the expected full-year effect on research and development expenses remained RMB 500 million.
Research and development expense increased 16% year over year in the second quarter, primarily due to AI investment. Fan said Bilibili’s medium- to long-term targets remain gross margin of 40% to 45% and operating margin of approximately 15% to 20%.
As of June 30, Bilibili held RMB 24.3 billion in cash, cash equivalents, time deposits and short-term investments. Its board approved a new two-year, $300 million share repurchase program in June. Under that authorization, the company had repurchased 1.9 million shares for $31 million by June 30. From the start of the year through the date of the call, it had purchased 5.8 million shares for $118 million.
About Bilibili (NASDAQ:BILI)
Bilibili (NASDAQ: BILI) is a leading Chinese online entertainment platform renowned for its focus on animation, comics and games (ACG) content. The company operates a video-sharing website where users can view, upload and comment on a wide range of content, from full-length anime episodes to user-generated short videos. In addition to on-demand streaming, Bilibili offers live broadcasting services that connect creators with fans through real-time interaction features such as “bullet comments” that flow across the screen.
Beyond its core video community, Bilibili generates revenue through multiple value-added services.
