Bilibili reported its 16th consecutive quarter of gross margin improvement, with advertising revenue jumping 28% year over year to RMB 3.13 billion in the quarter ended June 30, 2026, while total revenue grew 8% to RMB 7.94 billion and GAAP net profit rose 55%. The advertising segment, which saw AI-driven ad revenue more than double and search ad revenue double, helped push gross margin to 37.2% from 36.5% a year earlier, and non-GAAP adjusted net profit climbed 25% to RMB 703.6 million. However, mobile games revenue fell 14% to RMB 1.39 billion due to a tough comparison with San Guo: Mou Ding Tian Xia's prior-year performance, though CFO Sam Fan expects games revenue to return to growth in the fourth quarter, supported by the global launch of Lumi Master on September 17, 2026, and a new licensed strategy title. The company repurchased 5.8 million shares for $118 million and approved a new two-year, $300 million buyback program, while daily active users rose 7% to 116.5 million and daily time spent increased to 113 minutes. Management flagged a challenging macroeconomic backdrop in China, with advertisers prioritizing conversion efficiency, and value-added services grew just 5% to RMB 2.97 billion, the slowest among major segments.
Bilibili IncBilibili reported strong ad revenue growth, margin expansion, and a new buyback program, all positive for the stock.
