Bilibili Q2 2026: Profit Jumps 55% as Advertising Becomes Its Largest Business
Bilibili posted a 55% surge in net profit for the second quarter of 2026, as its advertising business overtook all other revenue segments to become the platform's primary growth driver — a structural shift that signals the Chinese video platform is moving decisively from a loss-narrowing story to a genuine profit-compounding one.
The Beijing-listed company reported Q2 revenue of RMB 7.94 billion (US$1.10 billion), up 8% year-on-year, on August 27. Net profit reached RMB 339 million (US$47.1 million), with the net margin expanding to 4.3% from 3.0% a year earlier. On a non-GAAP basis, adjusted net profit climbed 25% to RMB 704 million (US$97.8 million), pushing the adjusted margin to 8.9% — the eighth consecutive quarter of adjusted profitability. The results mark a qualitative inflection: Bilibili is no longer merely cutting losses; it is scaling earnings.
Advertising Accelerates Past Gaming to Claim the Revenue Crown
Advertising revenue rose 28% year-on-year to RMB 3.13 billion (US$434.7 million) in Q2, accounting for nearly 40% of total revenue — making it both the largest and fastest-growing of Bilibili's four business segments. Critically, this marks the 14th consecutive quarter in which advertising has grown by 20% or more, a streak that stands out against a backdrop of broad pressure across China's digital advertising market in 2026.
The composition of ad spend reveals where brand budgets are flowing. The top five contributing verticals were gaming, consumer electronics, online services, e-commerce, and autos. Auto and apparel advertisers proved particularly aggressive, with year-on-year ad spend growth exceeding 60% in both categories. During the June 18 shopping festival, home-furnishing performance ads grew 59% year-on-year, with gross merchandise volume for products priced above RMB 1,000 reaching a new record.
The platform's positioning as China's leading AI content community is generating incremental ad dollars. AI-related advertising revenue more than doubled year-on-year, as AI hardware and software vendors prioritized Bilibili's technically literate user base. New advertiser count grew 11% year-on-year as of June 30, while retention among clients spending over RMB 1 million remained above 98% — a metric that points to deepening commercial relationships rather than one-off campaign spending.
Gaming Contracts Under Base-Effect Pressure, Raising New-Title Risk
Mobile gaming revenue fell 14% year-on-year to RMB 1.39 billion (US$193.1 million), the only segment to decline in the quarter. Management attributed the drop primarily to a high comparison base set by Three Kingdoms: Strategize the World in Q2 2025. For the first half of 2026, gaming revenue totaled RMB 2.91 billion (US$404.2 million), down from RMB 3.34 billion in H1 2025 — a RMB 430 million shortfall that advertising growth has so far absorbed at the company level.
Legacy titles continue to demonstrate operational resilience. Fate/Grand Order's domestic server marked its tenth anniversary with single-day DAU and revenue reaching five-year highs. Azur Lane sustained its nine-year run and retained its top position in its vertical. These long-cycle titles validate Bilibili's premium-IP, long-tail publishing strategy, but they cannot fully substitute for new-title momentum. The critical question for investors: whether Bilibili can launch a breakout title in H2 2026 capable of resetting the gaming segment's growth trajectory.
Gross Margin Sustains a Four-Year Improvement Streak
Bilibili's gross margin reached 37.2% in Q2 2026, up from 36.5% a year ago — the 16th consecutive quarter of year-on-year improvement, a run that stretches back to Q3 2022. Cost of revenue grew 7% to RMB 4.98 billion (US$691.7 million), slower than the 8% revenue expansion, allowing gross profit to rise 10% to RMB 2.95 billion (US$409.7 million).
Revenue-sharing costs, the platform's largest cost line, grew only 4% to RMB 3.08 billion (US$427.8 million) — a sign that Bilibili is extracting greater monetization yield per unit of creator payout. Operating expenses totaled RMB 2.58 billion (US$358.3 million), up 7%, also below the revenue growth rate. Sales and marketing spending grew just 1% to RMB 1.06 billion (US$147.2 million), reflecting reduced need for paid user acquisition as organic engagement deepens. R&D expenditure rose 16% to RMB 1.01 billion (US$140.3 million), driven by higher server depreciation — a cost consistent with the platform's AI infrastructure buildout.
Operating profit expanded 48% to RMB 373 million (US$51.8 million), growing at roughly six times the pace of revenue — the clearest expression of operating leverage in the company's history as a public entity.
User Engagement Deepens, Compounding Advertiser Value
Daily active users reached 116.5 million in Q2, up 7% year-on-year. Monthly active users grew to 371 million. Average daily time-per-user rose eight minutes to 113 minutes, pushing total platform time-spent up 14% year-on-year. Viewership of videos longer than five minutes grew 18%, reinforcing the platform's differentiation from short-video competitors such as Douyin and Kuaishou.
Creator supply is expanding in parallel. The number of content creators with more than 1,000 followers grew 30% year-on-year; those with more than 10,000 followers grew 21%. Daily video submissions rose 28%. Monthly interactions totaled approximately 17.4 billion, up 9%, with comments exceeding 100 characters surging 67% — a behavioral signal that Bilibili's audience skews toward high-intent, high-dwell-time consumption, a profile that commands premium CPMs.
AI content consumption time grew 72% year-on-year. Bilibili's "Build in Bilibili" AI creation contest, launched in June, attracted more than 28,000 submissions within two months, with non-professional developers — students and homemakers — accounting for over 70% of entrants. The contest reinforces the platform's identity as an accessible technical community, a positioning that AI advertisers are willing to pay for.
Capital Allocation Signals Confidence in Sustained Free Cash Flow
Bilibili's balance sheet held RMB 24.3 billion (US$3.38 billion) in cash, time deposits, and short-term investments as of June 30, 2026. In June, the company's board approved a new two-year, US$300 million share repurchase program. Under that program, 1.9 million shares had been bought back at a total cost of approximately US$31 million through quarter-end. Year-to-date through the report date, combined buybacks under the new and prior programs totaled approximately 5.8 million shares at a cost of roughly US$118 million.
CFO Fan Xin stated the company will maintain investment discipline while returning capital to shareholders through buybacks — language that, combined with eight consecutive quarters of adjusted profitability, marks a meaningful shift in how management is framing Bilibili's financial identity to the market.
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