Bilibili Inc. (BILI) shares ticked up Thursday after the Chinese video platform posted better-than-expected fiscal second-quarter 2026 results. The company, often compared to Alphabet Inc.'s (GOOGL) YouTube for its focus on long-form, user-generated videos and livestreaming, is proving that quality content can still drive revenue even when attention spans are shrinking.
Revenue rose 8% year over year to $1.17 billion, or 7.94 billion yuan, edging past analyst estimates of $1.16 billion. Adjusted earnings came in at 23 cents per American depositary share, beating Wall Street's forecast of 18 cents.
User Engagement Remains Strong
Bilibili's community is growing, and more importantly, people are sticking around. Average daily active users increased 7% to 116.5 million, while average daily time spent hit 113 minutes. That pushed total user time spent up 14% year over year. For a platform that thrives on engagement, those numbers are the lifeblood.
Advertising Surge Offsets Gaming Slump
Not everything was rosy. Mobile gaming revenue fell 14% to $205.1 million, dragged down by tough comparisons with the prior-year performance of "San Guo: Mou Ding Tian Xia." But advertising picked up the slack, jumping 28% to $461.4 million as Bilibili refined its ad products and efficiency.
Value-added services revenue rose 5% to $437.3 million, helped by premium memberships and other services. Revenue from intellectual property derivatives and other businesses increased 2% to $66.3 million.
Margins and Profitability Improve
The bottom line is looking healthier too. Gross margin expanded to 37.2% from 36.5% a year earlier. Adjusted net income rose 25% to $103.7 million, or 703.6 million yuan. As of June 30, Bilibili held $3.58 billion in cash, cash equivalents, time deposits and short-term investments.
CEO Rui Chen credited the company's high-quality content and interest-driven community for strengthening engagement. Daily active users reached 117 million, monthly active users climbed to 371 million, and total time spent rose more than 14% year over year.
Chen noted that as digital content proliferates, consumer attention has become "scarce," making quality and emotional connection increasingly important. He also said artificial intelligence could help Bilibili improve precision, expand its reach, and support future growth.
Chief Financial Officer Sam Fan highlighted that the quarter marked Bilibili's 16th consecutive period of gross margin improvement. Net profit rose 55%, driven by revenue growth and stronger operating leverage. Fan said the company would maintain investment discipline, repurchase shares, and focus on creating sustainable long-term shareholder value.
Stock Performance
Bilibili shares rose 2.20% to $16.51 in Thursday's premarket trading.
