The video platform is using AI and a maturing user base to post strong advertising growth in a weak market, but that higher monetization push is also testing its signature community culture
image credit: Bamboo Works
Key Takeaways
- Bilibili’s advertising revenue rose 30% in the first quarter, far outpacing its total revenue growth, while games and IP-related revenue declined
- The ad strength reflects better monetization of the company’s loyal users, AI-assisted ad tools and a more commercially valuable audience
China’s video platforms are not short of attention from their loyal customer bases. Their harder problem is converting that attention into profitable growth, as advertisers stay cautious, content remains expensive and AI becomes another major cost they can’t avoid.
That’s what makes the latest quarterly report from Bilibili Inc. (NASDAQ:BILI) (9626.HK) all the more worth watching. The company only recently crossed into annual profitability, reporting its first full-year profit in 2025. Now, it has to prove that profit wasn’t just a cost-control story, but is something that can keep growing. The company’s revenue rose 7% to 7.47 billion yuan ($1.08 billion) in the first quarter, led by a 30% rise in advertising revenue to 2.59 billion yuan. Daily active users rose 8% to 115.2 million, with average daily time on the service at 119 minutes.
The rest of the report was less impressive. Value-added services, Bilibili’s largest segment, rose just 4% to 2.91 billion yuan. Mobile games revenue actually fell 12% to 1.52 billion yuan, mainly because last year’s comparison was lifted by a hit game that has since entered a more mature part of its cycle. Intellectual property (IP) derivatives and other revenue also fell 4% to 448.2 million yuan. Put simply, advertising was the star of the quarter, while the rest of its business was much less impressive.
A more selective ad market
Bilibili’s ad growth stands out because other major Chinese internet names are still showing falling ad revenue as advertisers rein in their marketing budgets in China’s slowing economy. Baidu (BIDU.US; 9888.HK), still heavily exposed to advertising tied to its search business, reported a 22% decline in online marketing revenue in the first quarter. Online video site iQiyi (IQ.US) also reported its online ad revenue fell 7% during the quarter.
Bilibili’s ability to post strong growth for …