Bilibili Inc. (Bilibili (BILI)) reported mixed fiscal first-quarter 2026 results on Tuesday, showing that its grip on China's young audience remains as strong as ever — even if its gaming business is taking a breather.
The Chinese video-sharing platform, often described as a cross between YouTube and Twitch for Gen Z, posted revenue of $1.08 billion (7.47 billion yuan), up 7% year over year. That was just a hair below analyst estimates of $1.09 billion, but the company made up for it on the bottom line: adjusted earnings came in at 19 cents per ADS, beating Wall Street's forecast of 12 cents.
User Engagement: The Real Story
Bilibili's core strength is its ability to keep users hooked. Average daily active users rose 8% year over year to 115.2 million during the quarter. Monthly active users exceeded 376 million. But the most impressive number might be the average daily time spent: 119 minutes — that's nearly two hours a day, up 11 minutes from a year ago.
Chairman and CEO Rui Chen said the company entered 2026 with strong momentum as user engagement and content quality continued improving. "Daily user engagement reached a record high during the quarter, with average usage nearing two hours per day," he said. Chen credited Bilibili's "community-first" strategy and investments in high-quality content for deepening engagement with younger users while expanding the platform's reach.
Gaming Stumbles, Advertising Soars
Not everything was rosy. Mobile gaming revenue fell 12% to $220.7 million, mainly because the prior year's hit "San Guo: Mou Ding Tian Xia" set a tough comparison. But Bilibili's other revenue streams picked up the slack.
Value-added services revenue — think premium memberships and the like — increased 4% to $422.2 million. Advertising revenue jumped 30% to $375.3 million as the company improved its ad products and efficiency. Revenue from IP derivatives and other businesses dipped 4% to $65 million.
The advertising strength is particularly notable. Bilibili has been working to monetize its massive user base more effectively, and the 30% growth suggests those efforts are paying off. The company is essentially becoming a more serious competitor to platforms like Alphabet's (GOOGL) YouTube in the Chinese market.
Profitability and Cash
Bilibili is also getting better at making money from its growing audience. Gross margin expanded to 37.1% from 36.3% a year earlier — the 15th consecutive quarter of gross margin expansion, according to CFO Sam Fan. Adjusted net income rose to $84.9 million (585.43 million yuan), compared with 361.51 million yuan in the prior-year quarter.
Fan said the margin improvement was supported by operating leverage and topline growth. He added that Bilibili plans to continue disciplined investment in AI-driven innovation while maintaining a focus on profitability. As of March 31, 2026, the company held $3.51 billion in cash, cash equivalents, time deposits, and short-term investments — a healthy cushion for a company still investing in growth.
AI and the Future
CEO Chen highlighted artificial intelligence as a key driver going forward. "AI is improving content creation, discovery and monetization efficiency across the ecosystem," he said. That's a theme many tech companies are leaning into, but for Bilibili, AI could help personalize the user experience and make its ad targeting even sharper.
Stock Reaction
Bilibili shares were up 0.70% at $19.76 during premarket trading on Tuesday. The modest move suggests investors are still digesting the mixed results — revenue miss, earnings beat, strong user metrics, and a clear shift toward advertising as the growth engine.
For a company that's often seen as a bellwether for China's young consumer market, Bilibili's numbers tell a story of a platform that's deepening its moat even as it navigates the ups and downs of individual business lines. If you can keep 115 million young people entertained for two hours a day, you've got a pretty solid foundation to build on.
