Bilibili ((BILI)) has held its Q1 earnings call. Read on for the main highlights of the call.
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Bilibili’s latest earnings call painted a broadly upbeat picture, as surging engagement and ad monetization more than offset weakness in gaming and only modest value‑added services growth. Management stressed disciplined cost control even as AI‑related investments surge, pointing to continued margin expansion, solid cash reserves and a strategy geared toward long‑term efficiency and profit growth.
User Growth and Engagement
Bilibili’s user base continued to expand, with daily active users rising 8% year on year to 115 million and monthly active users reaching 376 million. Average daily time spent hit a record 119 minutes, up 11 minutes from a year earlier, pushing total user time spent up 19% and underscoring the platform’s deepening user stickiness.
Strong Advertising Momentum
Advertising remained the standout growth engine, with revenue up 30% year on year to RMB 2.6 billion and marking the 13th straight quarter of double‑digit gains. PC and OTT ad revenue grew more than 50%, search and mini‑program ads more than doubled, while performance ad conversion improved about 25% and automated ad penetration reached roughly 85%.
Revenue and Profitability Improvement
Total revenue grew 7% year on year to RMB 7.5 billion, while gross profit rose 9% to RMB 2.8 billion and gross margin improved to 37.1%, the 15th consecutive quarter of expansion. Operating profit climbed to RMB 167 million, over 10 times last year’s level, and adjusted net profit jumped 62% to RMB 585 million, lifting the adjusted net margin to 7.8%.
Creator and Content Ecosystem Strength
The creator ecosystem continued to deepen, with daily active creators up 6% year on year and daily submissions rising 19%, driving more content and engagement. Creator income also improved, as the number of accounts with more than 1,000 followers grew over 30% and average income per creator increased 24%, while official members reached 291 million with around 80% 12‑month retention.
VAS and Fan Monetization Growth
Value‑added services revenue reached RMB 2.9 billion, up 4% year on year, showing steady if slower growth compared with advertising. Premium members grew 5% to 24.8 million, with about 80% on annual or auto‑renew plans, while fan charging revenue surged more than 50%, signaling stronger direct financial support flowing from fans to creators.
Content Category Expansion
Bilibili reported broad gains across content categories, with games watch time up 27% and Chinese anime up 20% year on year, alongside knowledge content, including AI topics, also growing 20%. Music watch time climbed 25%, and newer areas such as parenting, early education and outdoor content more than doubled, showcasing diversification beyond core niches.
Healthy Balance Sheet and Share Buyback
The company underscored its financial flexibility, reporting RMB 24.2 billion in cash, cash equivalents, time deposits and short‑term investments as of March 31. Bilibili also completed a USD 200 million share repurchase program, buying back 9.9 million shares, including 2.5 million shares worth USD 60.3 million in the first quarter, and the board is considering renewing the program.
Product and Pipeline Progress in Games and IP
Despite short‑term revenue pressure, the games pipeline is advancing, with the Three Kingdoms casual card title NCard soft‑launched to positive feedback and targeted for official launch in July. Additional titles, including a new strategy game and Lumi Master, are in testing with planned global rollouts, while an Escape from Tarkov‑style game has already sold more than 4 million copies, supporting broader IP expansion.
Games Revenue Decline
Games revenue fell 12% year on year to RMB 1.5 billion and was flat sequentially, largely due to a tough comparison against the prior year’s strong performance of San Guo: Mou Ding Tian Xia. Management acknowledged that the games segment remains a drag on overall growth in the near term, even as it pins hopes on the coming pipeline to stabilize the business.
Moderate VAS Growth
While VAS remains a key monetization channel, its 4% year‑on‑year growth to RMB 2.9 billion lagged the pace of advertising, highlighting a maturing growth curve. The company is leaning more on enhanced fan charging and subscription stickiness to sustain VAS revenue, but these traditional streams are no longer the primary driver of topline acceleration.
Rising AI‑Related Spend and CapEx
Capital expenditure jumped about 80% year on year to RMB 200 million in the first quarter, driven by server and compute investments to support AI initiatives, with about RMB 1 billion of incremental AI CapEx planned for the full year. Management expects an estimated RMB 500 million impact on the income statement but plans to offset some of this with cuts in other operating expenses, positioning AI as a lever for long‑term efficiency.
Concentration and High‑Base Risks
The company flagged some concentration risks, noting that ad growth benefited from specific verticals such as Internet services and home decoration, making results partly dependent on campaign cycles. Similarly, the games segment’s decline reflected a high base from last year’s hit title, underlining how performance can remain sensitive to individual game lifecycles and sector‑specific demand.
Outlook and Forward Guidance
Management expects advertising to “maintain rapid growth” in the second quarter as AI‑driven tools continue to lift monetization efficiency, supported by strong growth in PC and OTT ads and surging AI‑related ad budgets. They reiterated mid‑to‑long‑term targets of around 45% gross margin and a 15–20% operating margin, even as AI CapEx rises, signaling confidence that profitability has further room to improve.
Bilibili’s earnings call portrayed a platform successfully converting rising engagement into profits, powered by a robust ad business and a resilient creator ecosystem. While gaming headwinds, slower VAS growth and heavier AI spending remain watchpoints, the combination of improving margins, a strong balance sheet and a clear push into AI‑driven monetization leaves the company well positioned in the eyes of investors focused on sustainable growth.