Bilibili Earnings Call: Profit Milestone and AI Push

Bilibili ((BILI)) has held its Q4 earnings call. Read on for the main highlights of the call.

Bilibili’s latest earnings call struck an upbeat tone as management showcased a landmark first full year of GAAP profitability alongside accelerating user growth and advertising momentum. Executives acknowledged pockets of volatility in gaming and value‑added services, plus near‑term margin pressure from AI reinvestment, but stressed durable community engagement and improving commercial efficiency as key long‑term drivers.

First Full-Year GAAP Profitability and Strong Financials

Bilibili reported 2025 revenue of RMB 30.3 billion, up 13% year on year, and delivered its first full year of GAAP net profit at RMB 1.2 billion. In Q4, revenue rose 8% to RMB 8.3 billion, gross margin expanded to 37.0% for a 14th straight quarter, and operating profit jumped 299% to RMB 504 million with adjusted net margin climbing to 10.6%.

User Growth and Engagement Acceleration

User metrics showed clear reacceleration, with daily active users reaching 113 million after growth improved each quarter to 10% year on year in Q4. Monthly active users grew 8% to 366 million, while average daily time spent increased 8% to 107 minutes and watch time for videos longer than five minutes surged more than 20%.

Commercialization & Advertising Momentum

Advertising remained the standout growth engine, with Q4 ad revenue up 27% year on year to RMB 3.0 billion and full‑year ads rising 23% to RMB 10.1 billion. High‑growth verticals such as home decoration and AI advertisers boosted budgets by over 80% and nearly 180% respectively, while deeper‑conversion campaigns grew more than 40% and user ad complaints were cut by over half.

Content & Creator Ecosystem Strength

The creator economy continued to scale, with nearly 3 million creators earning income in 2025 and average income per creator rising 21% year on year. The pool of creators with more than 1,000 followers expanded by over 30%, premium memberships climbed 12% to 25.3 million with roughly 80% twelve‑month retention, and fan charging doubled as over 10 million users financially supported creators.

AI and New Format Adoption Driving Consumption

AI emerged as a powerful engagement catalyst, with watch time on AI‑related topics jumping 53% year on year in Q4. New formats also gained traction as Bilibili’s video podcast initiative, launched mid‑2025, exceeded 8 billion minutes of watch time in the second half and AI‑powered tools helped drive a fivefold increase in AI music videos surpassing one million views.

Healthy Cash Generation and Capital Return

Cash generation underscored the improving fundamentals, with Q4 operating cash flow at about RMB 1.8 billion and full‑year cash flow reaching RMB 7.1 billion. The company ended 2025 holding RMB 24.2 billion in cash and liquid investments and executed on its USD 200 million buyback plan by repurchasing 7.0 million shares for USD 131.2 million, leaving further authorization.

Games: Breakout IP and Diversified Pipeline

Gaming delivered solid full‑year growth, with segment revenue up 14% to RMB 6.4 billion, underpinned by the self‑developed hit Escape from Duckov which sold more than 3 million copies in its first three weeks and became the top domestic single‑player title of the year. Management highlighted plans to extend this IP to consoles and mobile and flagged upcoming titles like NCard and Lumi Master slated for tests and launches in 2026.

Quarterly Game Revenue Decline

Despite the strong annual performance, Q4 game revenue fell 14% year on year to RMB 1.5 billion, mainly due to a tough comparison against last year’s breakout title San Mou. The quarter underscored how success in individual games can create lumpiness, reminding investors that the games business may remain volatile even as the broader pipeline strengthens.

VAS Growth Moderation

Value‑added services, including paid memberships and other digital offerings, grew more modestly than ads and gaming, rising 6% year on year in Q4 to RMB 3.3 billion. For 2025 as a whole, VAS revenue increased 8% to RMB 11.9 billion, signaling a more mature but still expanding revenue stream that now trails the company’s faster‑scaling advertising business.

Reinvestment in AI Could Temper Near-Term Margins

Management signaled a deliberate step‑up in AI spending, planning to reinvest part of the company’s rising profits into AI applications to enhance content creation, distribution, and monetization. While this strategy may slow near‑term margin expansion, Bilibili reiterated medium‑ to long‑term targets of 40%–45% gross profit margin and 15%–20% adjusted operating margin, up from roughly 10.1% in Q4.

Advertising Concentration & Cyclical Risk

The company acknowledged that its recent ad surge depends heavily on a handful of fast‑growing sectors, particularly AI and home decoration, where budgets can be sensitive to industry cycles. This concentration could introduce volatility if spending shifts or competition intensifies, though management argued that broader demand for performance‑oriented campaigns and market‑share gains should help cushion swings.

Guidance and Outlook

Looking ahead to Q1 2026, Bilibili expects gross profit to improve slightly quarter on quarter and adjusted operating margin to rise year on year, supported by continued advertising growth and share gains in gaming and AI‑driven campaigns. The company plans only modest increases in AI investment while staying committed to its long‑term margin targets, positioning itself as both a growing platform and increasingly disciplined business.

Bilibili’s earnings call painted the picture of a platform moving decisively from growth‑at‑all‑costs toward profitable scale, with community depth and advertising execution now translating into cash and returns. While segment volatility and AI‑driven reinvestment may create bumps along the way, management’s confidence in sustained user engagement, creator monetization, and margin expansion set an optimistic tone for investors.