Bilibili swings to profit as ad surge counteracts gaming slump

Bilibili (NASDAQ:BILI) reported first-quarter financial results that met revenue expectations and turned a net profit, powered by robust advertising growth and heightened user engagement that cushioned its cooling mobile games division.

The Shanghai-based video-sharing and anime platform generated total net revenues of RMB7.47 billion ($1.08 billion) for the three months ended March 31, 2026, marking a 7% increase from the prior-year period.

Net profit arrived at RMB202 million, representing a significant turnaround from a net loss in the first quarter of fiscal 2025.

Adjusted net profit jumped 62% year-over-year to RMB585.4 million.

Advertising emerged as the company's primary growth driver during the quarter, with ad revenues swelling 30% to RMB2.59 billion.

Management attributed the gains to optimized ad product offerings and AI-driven efficiency enhancements.

Conversely, mobile gaming revenue fell 12% to RMB1.52 billion, weighed down by a demanding year-over-year comparison against peak historical cycles for key legacy titles.

Platform engagement metrics hit record territory during the quarter.

Daily active users (DAUs) reached 115.2 million, an 8% increase over the previous year's first quarter.

The average daily time spent per user expanded by 11 minutes year-over-year to 119 minutes, lifting total user engagement time on the platform by 19%.

Disciplined operational cost containment lifted Bilibili’s gross margin to 37.1% for the period.

The company sustained a robust balance sheet, ending the first quarter with cash, time deposits, and short-term investments aggregating to RMB24.19 billion.

Bilibili also confirmed the execution and completion of its previously authorized $200 million share repurchase program, under which the digital entertainment provider bought back a total of 9.9 million of its listed securities.