Bilibili Q1 2026: AI Ad Spending Surges as Legacy Gaming Revenue Contracts
Bilibili leveraged a 170% surge in artificial intelligence advertising budgets to offset a double-digit contraction in its core gaming segment during the first quarter of 2026, signaling a structural shift in its monetization model.
The Chinese video platform reported a 7% year-over-year increase in total revenue to RMB 7.47 billion (US$1.03 billion), alongside adjusted net profit of RMB 618.2 million (US$85.9 million). The earnings beat was primarily driven by a 30% increase in advertising revenue, which reached RMB 2.59 billion (US$359.7 million), as the company aggressively integrated AI into its advertising infrastructure.
Despite improving margins, initial market feedback reflects caution regarding Bilibili’s product pipeline execution. Deutsche Bank trimmed the company’s target price by 10.7% to HK$250 and lowered its fiscal 2026 revenue forecasts by 2%, citing a delayed gaming recovery that pushes revenue expectations into the second half of the year.
AI Integration Propels Advertising Yield
Bilibili’s transition from a community-centric platform to a data-driven advertising ecosystem reached a critical threshold in Q1 2026. The company reported that 85% of advertising spending is now managed through automated campaigns. This infrastructure overhaul, combined with AI-generated content (AIGC) creatives, drove a 25% year-over-year increase in click-through conversion rates (CTCVR) for performance-based ads.
The platform also captured significant capital reallocation from the technology sector, with AI advertiser budgets surging more than 170% year-over-year. Traditional verticals remained resilient as well, with revenue from digital products, home appliances, and automotive sectors each growing more than 30%.
This diversification suggests Bilibili is successfully expanding its advertising inventory across multiple screens, including PC and OTT platforms, both of which recorded more than 50% growth.
Aging Titles Continue to Pressure Gaming Revenue
The platform’s long-standing reliance on mobile games remains a structural vulnerability. Gaming revenue declined 12% year-over-year to RMB 1.52 billion (US$211.1 million). Management attributed the contraction largely to a high comparison base following the 2025 launch of San Guo: Mou Ding Tian Xia, leaving the segment dependent on evergreen titles such as Fate/Grand Order and Azur Lane to maintain a stable revenue floor.
Investors are now pricing in a delayed recovery tied to second-half releases. The upcoming pipeline includes NCard, scheduled for a July rollout following encouraging April soft-launch data, as well as the highly anticipated San Wang, a Three Kingdoms strategy title targeting mature users.
Meanwhile, self-developed simulation game Lumi Master entered global paid testing in May and is targeting a Q4 2026 launch, testing Bilibili’s in-house development capabilities amid intensifying domestic competition.
Creator Economy Anchors Value-Added Services
Value-added services (VAS) revenue rose 4% year-over-year to RMB 2.91 billion (US$404.1 million), supported by robust engagement metrics. Average daily time spent per user reached a record 119 minutes, driving total user time spent up 19% year-over-year.
The platform maintained a premium membership base of 24.8 million users, with more than 80% subscribed through annual or auto-renewal plans, providing relatively high revenue visibility.
Notably, revenue from the platform’s fan-charging program surged more than 50% year-over-year, indicating growing user willingness to directly support creators. This trend helps reduce Bilibili’s reliance on platform-subsidized content spending and supports longer-term margin expansion.
The company also completed its US$200 million share repurchase program, retiring 9.9 million shares to support shareholder value amid broader sector volatility.