Core Viewpoint - Bilibili (B站) is entering a steady profitability cycle, with significant revenue growth and a shift towards positive net profit, contrasting with its competitor iQIYI's declining revenue and increasing losses [1][2]. Financial Performance - In Q2 2025, Bilibili's revenue increased by 20% year-on-year to 7.338 billion yuan, with a net profit of 218 million yuan, compared to a net loss of 608 million yuan in the same period of 2024 [1]. - Adjusted net profit for the same period was 561 million yuan, up from a loss of 272 million yuan in 2024 [1]. Revenue Breakdown - Bilibili's revenue sources in Q2 included: - Value-added services: 39% - Advertising: 33% - Gaming: 22% - IP derivatives and others: 6% [3]. - Advertising revenue grew by 20% to 2.45 billion yuan, with brand advertising and performance advertising increasing by approximately 30% [3][4]. User Engagement - Daily active users increased by 7% to 109 million, while monthly active users rose by 8% to 363 million [7]. - The average daily usage time per user was 105 minutes, a 6-minute increase from the previous year [7][8]. Market Trends - Bilibili's gaming revenue surged by 60% to 1.61 billion yuan, with popular titles maintaining user engagement [5]. - The company noted a significant increase in advertising revenue from home appliances, driven by national subsidy policies [4][5]. Cost Management and Profitability - Bilibili's gross margin improved by 6.6 percentage points to 36.5%, supported by high growth in gaming and advertising [11]. - The company aims to maintain a mid-term gross margin target of 40% to 45% and expects operational expenses to decrease in the second half of the year [11]. Cash Position - As of June 30, Bilibili had cash and cash equivalents, along with short-term investments, totaling 22.29 billion yuan [12].

Core Insights - Bilibili's gaming business has shown significant recovery, contributing to revenue growth and profitability in Q1 2025, with total revenue reaching 7.003 billion RMB, a 24% year-on-year increase [1] - The gaming segment generated 1.731 billion RMB, marking a substantial 76% increase compared to the previous year, driven by successful titles like "Three Kingdoms: Strategize the World" [2][4] - The advertising revenue also performed well, reaching 1.998 billion RMB, a 20% increase year-on-year, with a notable growth in performance advertising exceeding 30% [6][9] Revenue Breakdown - The revenue composition of Bilibili is primarily from value-added services, advertising, gaming, and IP derivatives, with gaming showing the highest year-on-year growth [2] - The average age of Bilibili's user base is 26, indicating a relatively young demographic that presents long-term growth opportunities [5] Game Performance - "Three Kingdoms: Strategize the World" has been pivotal in reversing the declining trend in gaming revenue, achieving over 690 million downloads and generating more than 132 million USD in total revenue by the end of 2024 [4] - The game is expected to have a long lifecycle, with plans for continuous updates and seasonal content to maintain user engagement [4][5] Advertising Strategy - Bilibili's advertising strategy includes leveraging AI tools to enhance ad content generation, resulting in a 400% year-on-year increase in AI-related ad revenue [8] - The company aims to maintain a higher-than-industry growth rate in advertising revenue, supported by upcoming promotional events [9] User Engagement - Bilibili's active user metrics have improved, with daily active users reaching 107 million and monthly active users hitting a record 368 million [14] - The platform's marketing expenses increased by 26% to 1.167 billion RMB, driven by promotional activities for "Three Kingdoms" and the Spring Festival collaboration [14] Financial Outlook - The CFO expressed confidence in achieving a gross margin of 40%-45% in the medium to long term, with operational expenses expected to decrease as a percentage of total revenue [16] - The company is focused on balancing high-margin business growth with operational efficiency improvements through organizational adjustments and AI applications [16]