On August 27, Bilibili Inc. (NASDAQ: BILI) released its second-quarter results for 2026, reporting revenue of RMB 7.94 billion and gross profit of RMB 2.955 billion, with basic earnings per share of RMB 0.82. Compared to the same period in 2025, revenue grew approximately 8.2% and gross profit increased by around 10.4%, with profit growth continuing to outpace revenue expansion.
Based on revenue and gross profit figures, Bilibili's gross margin for the quarter stood at approximately 37.2%, up about 0.7 percentage points from 36.5% in the prior-year period, while remaining largely flat compared to 37.1% in the first quarter of this year. After several consecutive quarters of repair, gross margin improvement is still underway, though the pace of gains has become more moderate.
Earnings per share require careful attention to the accounting basis. Under US GAAP, basic earnings per share for the quarter were RMB 0.82, compared to RMB 0.52 in the same period of 2025. On an adjusted basis, basic earnings per share came in at RMB 1.58, surpassing the market consensus of approximately RMB 1.51 and exceeding the RMB 1.34 recorded a year earlier. These two metrics should not be conflated, as the adjusted figure primarily excludes non-cash items such as share-based compensation.
From a revenue perspective, this quarter's growth rate was below the 20% recorded in the same period of 2025. This reflects both the high comparison base set by the gaming business last year and the fact that, with revenue now exceeding RMB 7 billion, Bilibili's growth focus is increasingly shifting toward monetization efficiency in existing businesses such as advertising, membership, and live streaming.
Prior business trends have already signaled this shift. In the first quarter of 2026, Bilibili's advertising revenue reached RMB 2.589 billion, up 30% year-over-year; value-added services revenue was RMB 2.912 billion, growing 4%; and mobile gaming revenue totaled RMB 1.523 billion, down 12% year-over-year.
The gaming weakness is primarily attributed to Three Kingdoms: Strategy Prevails entering a mature operational phase with a high prior-year comparison base, making advertising a clearer source of incremental growth.
Advertising growth is tied to user scale, traffic allocation, and ad delivery efficiency. Over the past year, Bilibili has expanded commercial inventory across video playback pages and search scenarios, while deploying algorithms and generative AI for creative production and ad matching. However, whether ad load rates can increase without significantly impacting community experience remains an ongoing question for the commercialization process.
The user base continues to grow. In the first quarter of this year, Bilibili's daily active users reached 115.2 million, up 8% year-over-year, with average daily time spent per user at 119 minutes; the corresponding figures for the second quarter of 2025 were 109.4 million and 105 minutes.
Longer engagement time provides room for advertising and value-added services, but whether user growth can consistently translate into revenue depends on advertiser budgets and willingness to pay.
Profit improvement does not stem solely from revenue growth. Over the past several years, Bilibili has trimmed certain content and operational costs, controlled selling expenses, and increased the revenue mix of higher-margin businesses such as advertising and gaming.
However, the company's research and development expenses rose 9% year-over-year to RMB 921 million in the first quarter, mainly related to AI investments. Whether these new investments translate into user efficiency and commercial returns will influence the pace of future profit release.
On the capital front, Bilibili launched a new USD 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 plan, spending around USD 31.3 million; cumulative repurchases in the first half of the year totaled approximately 4.8 million securities, costing about USD 100 million. Buybacks help reduce share dilution, but assessing operational quality should still rely more on net profit, operating cash flow, and core business performance.
Overall, Bilibili continued its trend of moderate revenue growth and margin improvement this quarter, with results slightly exceeding market expectations. However, a single quarter's data is not yet sufficient to indicate a reacceleration in revenue.
The sustainability of advertising growth, the new game pipeline cycle, monetization performance of value-added services, and the actual impact of AI investments on costs and efficiency will all determine the quality of second-half results.
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