On November 13 (Eastern Time), Bilibili Inc. (BILI) released its seemingly stellar Q3 2025 financial results. Total revenue reached RMB7.69 billion, marking a 5% year-over-year (YoY) increase. More strikingly, profitability saw dramatic improvement—adjusted net profit soared 233% YoY to RMB790 million.
The report reveals Bilibili's dual narrative: robust advertising growth and expanding gross margins contrast sharply with persistent gaming sector declines and market concerns over revenue diversification.
**Profitability Soars as Business Diversifies** Bilibili's standout achievement this quarter wasn't revenue growth but a qualitative leap in profitability. Gross margins have now improved for 13 consecutive quarters. CFO Fan Xin noted, "Enhanced operating leverage and stringent cost controls drove non-GAAP net profit up 233% YoY to RMB786 million."
This improvement stems from optimized revenue structure and operational efficiency. Bilibili now maintains a balanced four-pillar model: value-added services (39%), advertising (33%), gaming (20%), and IP derivatives/others (8%). This diversification strengthens resilience against single-sector volatility.
Advertising emerged as the quarter's brightest spot, with revenue hitting RMB2.57 billion (up 23% YoY). Luxury, beauty, and automotive brands fueled a 16% increase in advertisers. AI-related ad revenue surged nearly 90%, while automotive ads grew 35%. Vertical content ecosystems enabled precise marketing, leveraging Bilibili's community strengths.
Value-added services grew 7% YoY to RMB3.02 billion. By quarter-end, premium members reached 25.4 million, 80% of whom subscribed annually or via auto-renewal. Daily active users hit a record 117 million, with monthly users at 376 million. Average daily usage time rose to 112 minutes (+6 minutes YoY), signaling enduring community appeal despite competition.
**Challenges Persist: Gaming Slump and Balancing Act** However, beneath the upbeat figures lurk significant challenges. Gaming revenue fell 17% YoY to RMB1.51 billion, marking three consecutive quarterly declines. Management attributed this to tough year-ago comparisons with "Three Kingdoms: Tactics," a 2024 blockbuster.
CEO Chen Rui emphasized long-term gaming sustainability, targeting "5+ years of operation" for flagship titles. Yet compared to Tencent's decade-old "Honor of Kings," Bilibili's gaming longevity remains unproven. The sector's weakness also exposes overreliance on single hits—a risk compounded by exiting in-house development. While October's self-published "Escape from Yakof" sold 3 million copies globally, its lasting impact is uncertain.
Beyond gaming, Bilibili grapples with balancing commercialization and community culture. Q3 saw aggressive monetization of content creators via initiatives like the "Supernova Plan" for live commerce. This triggered noticeable community friction, with complaints about excessive sponsored content ("UP主恰饭") rising sharply versus 2024.
Longtime users lament Bilibili's perceived cultural shift. Chen's "breaking boundaries" strategy since 2014 expanded users from millions to 376 million but alienated core fans—exemplified by the 2016 backtrack on "no pre-roll ads" for licensed anime, viewed as betraying community purity.
Creator ecosystems also show strain. While UP主s with 10,000+ followers grew over 20% YoY and 2.5 million creators earned income (up 22% per capita), reduced incentives and higher thresholds drove out smaller creators. Algorithmic bias toward clickbait further marginalizes quality content.
In summary, Bilibili's advertising prowess and profitability gains showcase commercial progress, with Chen noting record user metrics. Yet persistent gaming declines and the tightrope walk between monetization and community ethos cloud its future. At this crossroads, Bilibili must find equilibrium between profit growth and preserving its founding spirit.
*This article incorporates market data and industry insights compiled with AI-assisted analysis.*
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