Bilibili closed its Hong Kong shares up more than 3.6% on Tuesday at HK$156, giving the company a market value of HK$66.35 billion, before the Chinese video platform published first-quarter earnings that evening. By 9 p.m., the reaction on Wall Street was more cautious: Bilibili’s U.S.-listed shares traded down more than 5% in premarket action.
The split verdict captures the report’s mixed message. Bilibili turned a net profit of 202 million yuan in the first quarter, reversing a net loss of 10.7 million yuan in the same period a year earlier, and its adjusted net profit rose 62% to 585 million yuan. Revenue grew 7% to 7.47 billion yuan. The company is profitable, and it is growing, but investors wanted more convincing evidence that its expansion is accelerating.
The breakdown explains the profit. Advertising was the standout, delivering revenue above expectations, according to analysts at Dolphin Research, a research platform that follows Chinese internet companies. Advertising contributed 35% of first-quarter revenue, alongside 39% from value-added services, 20% from games, and 6% from IP derivatives and other businesses. The advertising strength reflects the platform’s unusual audience, a young, engaged user base that has made Bilibili a destination for brands targeting Gen Z consumers in China.
The user numbers were solid but not spectacular. Daily active users averaged 115 million in the quarter, monthly active users reached 376 million, and monthly paying users came in at about 34 million, up 7% from a year earlier. Formal members, users who pass the platform’s notoriously difficult membership test, reached 291 million. Dolphin Research noted that monthly active users added only 10 million on a sequential basis during a season that should have been strong, below the growth of the year-ago quarter, a shortfall the analysts attributed partly to the timing of the Spring Festival holiday.
Gross margin improved to 37.1% from 36.3% a year earlier, a sign that Bilibili’s costs are growing more slowly than its revenue. The company has spent the past three years cutting back on content spending and unprofitable experiments, and the discipline shows in the numbers. Its road to profit has been long: the platform, known for its anime, gaming, and knowledge videos, burned through billions of yuan during its growth phase and only turned its first quarterly profit in 2024.
The earnings mark a new phase for the company, which is now trying to prove that profitability can coexist with growth. The challenge is visible in the stock’s reaction. A beat on profit and a miss on the imagination was not enough to satisfy investors who have pushed Bilibili shares up sharply over the past year on the strength of its game pipeline and its advertising momentum.
Games remain the swing factor. Bilibili’s mobile-game publishing business has produced hits and misses, and the 20% revenue contribution in the quarter reflects a slate that executives say will expand in the second half of the year. The company’s position in gaming is unusual, a community platform that also publishes games for the same audience it hosts, and investors have learned to expect volatility from that segment.
The company’s response to user-growth questions is that engagement matters more than raw numbers. Time spent per user, interaction rates, and the conversion of viewers into members, the metrics that make the platform valuable to advertisers, have all improved, executives said. The 10 million sequential user addition, in that telling, is less important than the fact that the users already on the platform are worth more to advertisers each quarter.
The company’s transformation since its 2018 listing has been studied by rivals and investors alike. Bilibili was long regarded as the Chinese internet’s most beloved money-loser, a platform whose users defended its community culture fiercely while its management struggled to make the economics work. The turnaround, which began with cost cuts and a sharpened focus on advertising and games, has made the company a case study in how to monetize engagement without alienating the audience that creates it. Its member test, a curated examination that new users must pass to unlock full access, remains one of the most distinctive community features in the industry, and the 291 million formal members now on the books represent a base that advertisers pay a premium to reach.
The advertising business has room to grow, analysts said. Bilibili’s ad load remains well below that of short-video platforms like Douyin and Kuaishou, and its audience, urban, educated, and young, commands some of the highest prices in Chinese digital advertising. The company has been adding ad formats cautiously, mindful of the balance between revenue and user experience. Executives said on the earnings call that they see years of growth ahead as brands shift budgets toward the platform’s unique demographic.
The next test comes in the second quarter, when Bilibili faces an easier comparison and a summer season that usually lifts gaming revenue. The premarket decline suggests the market wants faster growth before it pays up further. Bilibili’s answer, embedded in Tuesday’s numbers, is that it can deliver profits now and growth later, and that the advertising machine built on its community is still early in its development. Investors will decide in the coming weeks whether that trade is good enough.
