業績會第一現場

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哔哩哔哩2026Q2业绩直播

Key Takeaways (AI-Generated)

Financial Performance

- Total revenues for Q2 rose 8% year-over-year to RMB 7.9 billion

- Gross profit grew 10% year-over-year to RMB 3.0 billion, with gross margin expanding to 37.2%

- Net profit increased 55% year-over-year to RMB 339 million

- Adjusted net profit reached RMB 704 million with adjusted net profit margin expanding to 8.9%

Business Highlights

- DAU increased 7% year-over-year to 117 million, MAU grew to 371 million

- Daily video submissions jumped 28% compared to same period last year due to AI tools

- Premium members reached 25.7 million, up 9% year-over-year

- Bilibili World offline event attracted over 400,000 fans in Shanghai

Financial Guidance

- Long-term targets remain unchanged: gross profit margin of 40-45% and operating margin around 15-20%

- Gaming revenue expected to resume year-over-year growth trend starting in Q4

- AI-related R&D investment of 1 billion RMB well on track, 70-80% achieved in first half

Opportunities

- AI tools helping creators produce content faster and improving recommendation efficiency

- Global launch of Lumi Master scheduled for September 17th, expanding into casual gaming market

- Multiple new game titles in pipeline including licensed IPs like Ragnarok Online 3

- AI empowering advertising efficiency, content understanding, and automated ad placement systems

Risks

- Challenging macroeconomic environment and consumer spending pressure affecting advertising market

- Market competition in challenging economic conditions despite strong Q2 performance

Full Transcript (AI-Generated)

Operator

Good day and welcome to the Bilibili's Second Quarter 2026 Financial Results and Business Update Conference Call. Today's conference is being recorded. At this time, I would like to turn the call over to Juliette Yang, Executive Director of Investor Relations. Please go ahead.

Juliette Yang

Thank you, operator. During this call, we'll discuss our business outlook and make forward-looking statements. These comments are based on our predictions and expectations as of today. Actual events or results could differ materially from those mentioned in today's news release and in this discussion due to a number of risks and uncertainties, including those mentioned in our most recent filing with SEC and Hong Kong stocks Change.

The non GAAP financial measure we provide are for comparison purpose only. The definition of this measure and the reconciliation table are available in the news release we issued earlier today. As a reminder, this conference is being recorded. In addition, an investor presentation and a webcast replay of this conference call will be available on the Bilibili IR website at ir.bilibili.com.

Joining us today from Bilibili senior management are Mr. Ray Chen, Chairman of the Board and Chief Executive Officer, Miss Kali Lee, Vice Chairwoman of the Board and Chief Operating Officer and Mr. Sen Fan, Chief Financial Officer. I will now turn the call to Mr. Chen.

Ray Chen

Thank you, Juliet and thank you to everyone joining us today. Our strong momentum carried into the second quarter and we delivered another set of solid results. Both our community and top line growth remained healthy and profitability continued to expand. As users increasingly seek substance over noise, our high quality content and authentic community experience keep attracting new users and driving deeper engagement.

In Q2 DAU increased by 7% year over year to 117,000,000, while MAU grew to 371,000,000. Average daily time spent rose to 113 minutes from 105 minutes a year ago, which drove total time spent of over 14%. That engagement is translating into stronger commercial results. Advertising revenues grew 28% year over year, marking another quarter of industry leading growth.

Meanwhile, MPU's increased 7% year over year to 33.4 million, reflecting users increasing willingness to pay for the content and community experiences they truly value. You can also see that momentum in our financial results. Total revenues for Q2 rose 8% to RMB 7.9 billion and gross profit grew 10% year over year. Gross margin expanded to 37.2%, marking our 16th consecutive quarter of margin improvement.

Our top line growth and increased operating leverage drove our net profit up 55% year over year and our adjusted net profit reached RMB 704,000,000, with our adjusted net profit margin expanding to 8.9%. In the AI era, we see two major tailwinds. First, AI tools help our creators produce great content much faster, while AI empowered content understanding is making our recommendation far more efficient.

Second, and perhaps more importantly, in a world full of passive algorithmic content, real human connection becomes a rare commodity. People choose Bilibili because they want meaningful content, shared interests, and genuine interactions, and that makes our community even more attractive. That is why we remain committed to our AI strategy while staying highly disciplined in how we invest.

We'll use AI to improve content and efficiency without losing sight of our community roots and unique advantage. Strengthening this flywheel of community and monetization will continue to build lasting compounding value for our users, our creators and our shareholders. With that, let me walk you through our core pillars of content, community and commercialization.

Let's start with our content. Across our 17 year history, various content formats have come and gone, but Bilibili's distinct blend of quality content and vibrant interest driven communities continues to capture users intentional high value time. In Q2, total time spent on our platform expanded by 14% year over year. Notably, watch time from videos over 5 minutes grew by 18% year over year, demonstrating users growing demand for meaningful and high quality content.

Turning to our interest based content categories, we're seeing steady growth across both core and emerging hubs. Total watch time for game related content and general entertainment content increased by 20% and 35% year over year, respectively. Baby and maternity also grew by 36% year over year as more of our users step into parenthood. At the same time, AI tools are expanding creative boundaries across our platform.

For instance, watch time for music content grew 24% year over year, catalyzed by AIGC driven creation. Beyond content consumption, AI is also supercharging creator output. In Q2, daily video submissions jumped by 28% compared to the same period last year. Video podcasts offer another compelling example of our users embracing immersive content. Last month, average daily watch time for video podcast exceeded 100 million minutes.

This remarkable engagement shows that even in today's world of fast-paced content, there is still a huge and growing appetite for in depth storytelling. Behind these figures, empowering creators remains a top priority. Through refined algorithm, we now match quality content with interested users much earlier. In Q2, the number of creators with over 1000 followers grew by 30% year over year.

The diverse monetization channels we provide also helped. Average creator income increased by 21% year over year in the second quarter. Turning to our community, as we touched on earlier, authentic human connection has become rare and valuable in the era of automated bite sized content. That is why Bilibili's interactive community feels like a true Oasis in today's digital world.

Here, hundreds of millions of users connect over shared passions, expressing their feelings through comments and bullet chats to find a genuine sense of belonging. In Q2, monthly interactions grew 9% year over year to 17.4 billion, while deeper connections like long comments jumped over 67%. Meanwhile, by processing these rich user interactions, our algorithms can spot and elevate high quality content much faster, driving healthy, steady growth in both our user base and time spent.

This level of engagement and interaction naturally keeps users coming back and expands our network of trust. In Q2, the average active user followed 96 creators, up 11% from a year ago. By the end of Q2, our official members reached 299 million with 12 month retention remaining solid at around 80%. Ultimately, our community doesn't just surface the best content, it builds lasting user loyalty and drives enduring platform value.

This summer, we brought our community offline once again through our signature events Bilibili World and Bilibili Macro Link. Over the three day event, more than 400,000 fans gathered in person in Shanghai, making it one of the largest offline ACG Expos in China and a vibrant new cultural landmark for the city. Seeing so many young people come together to share their passions was a powerful reminder of what community means. This is what Bilibili looks like off screen, authentic, energetic and deeply connected.

Now let's turn to our commercial businesses, beginning with advertising. In Q2, advertising revenue increased by 28% year over year to RMB 3.1 billion, marking our fourteenth straight quarter of 20% year over year growth. This industry leading growth reflects our high value, deeply engaged user base alongside ongoing enhancements to our ad products and technical infrastructure.

Growth was broad based across industries. Games, digital products and home appliances, Internet services, e-commerce and automotive where our five largest advertising verticals in Q2. While our core gaming vertical maintain healthy growth, new verticals are also flourishing as our users mature into new life stages with expanding consumption needs. Ad revenues from home decoration, footwear and apparel and automotive each grew more than 60% year over year.

We also captured incremental budget from emerging industries. AI advertisers continue to scale and revenues from this vertical more than doubled year over year, driving sustained growth in Internet services. Our ads are also becoming more efficient. By deepening our understanding of product information, creative assets, user interests and conversion goals, AI helps us deliver more relevant ads and drive better conversion. Our CCCVR continue to improve, increasing 19% year over year in Q2.

Beyond matching, we are extending AI across creative, production and campaign operations from AIGC tools to AD placement AI agents, making advertising easier, more efficient for a broader range of clients. We are also extending monetization into deeper high intent user scenarios. Take search for example a high value scenario sitting right at the moment of decision making. Search revenues doubled year over year in Q2.

At the same time, we are unlocking growth across additional scenarios including PC, smart TV and the watch page. As monetization expands across the entire user journey, we see vast commercial potential ahead. Turning to our games business, Game revenues for the quarter were RMB 1.4 billion, down 14% year over year, mainly due to the high base Samo Sangwa Modin Ke$ha said last year.

San MO's latest 2nd anniversary Season 15 went well with players ranking #2 on China's iOS top grossing chart. We'll keep focusing on the game's long term life cycle by delivering fresh content and carefully balancing user experience with monetization. Meanwhile, our legacy titles, including FGO and Azure Land continue to deliver stable performance during the quarter.

In July, we officially launched our casual card game and Card San Guo. We continue to refine the game and enrich its gameplay while approaching user acquisition with a long term focus on ROI and retention. Looking at the second-half of 2026, our self developed simulation game Lumi Master Shioba Lumi was well received by global players in recent tests.

Building on this encouraging reception, we plan to launch the game on September 17th globally. 三王三国志王道天下are new license SLG title is scheduled to roll out in Q4, complementing San MO with a differentiated gameplay experience. Beyond Lumi and San Wang, we also introduced 3 new titles at Philippi Lee World including two licensed games, Ragnarok Online 3 syncing Trendwalfant and MMORPG based on a globally recognized IP that has already secured its publication license and Miss Bound Guild Wars card game which is adapted from another well known IP.

We also announced a new self developed tactical RPG3 Kingdoms The Ravages of Time. All three titles will be released next year. Together, these titles expand our pipeline across genres and development models while attracting new player segments. Turning to our VAS business. In Q2, VAS revenues grew 5% year over year to RMB 3.0 billion.

Our live broadcasting business maintained its steady performance and we continue to refine our operations to ensure stable and sustainable growth with better margins. At the end of Q2, premium members reached 25.7 million, up 9% year over year with around 80% on annual or auto renewal plans. Fan charging also kept momentum, with revenue up nearly 50% year over year.

Fan charging turns audience appreciation into direct financial support so creators across a wide range of categories can do what they love and produce quality content over the long term. Beyond the numbers, we remain deeply committed to shaping a healthy culture and community for China's young generation. ESG principles are central to that mission.

This year, MSCIESG upgraded Bilibili to an A A rating from an A rating, recognizing our ongoing progress in using technology and culture to create meaningful social impact. At the end of the day, we found that across every technological shift, one thing remains constant. People crave rich, meaningful content and real human connection. Bilibili is uniquely built at the intersection of both.

As AI enables us to fulfill this mission with greater precision and scale, I couldn't be more confident in our path ahead. With that, I will turn the call over to Sam to walk through our financials in more detail. Sam.

Sen Fan

Thank you, Mr. Chen, and hello, everyone. In the interest of time on today's call, I will focus on our second quarter financial highlights. We encourage you to refer to our press release issued earlier today for a closer look at our results. Total revenues for the second quarter were RMB 7.9 billion, up 8% year over year.

The breakdown of total revenues by revenue stream was approximately 39% advertising, 37% VAS, 18% mobile games and 6% from our IP derivatives and other businesses. Cost of revenues increased by 7% year over year to RMB 5.0 billion. Gross profit increased around 10% year over year to RMB 3.0 billion, while gross margin expanded to 37.2% from 36.5% in the same period last year, marking our 16th consecutive quarter of margin improvement.

Our total operating expenses were up 7% year over year to RMB 2.6 billion. Sales and marketing expenses increased by 1% year over year. G and A expenses were flat and R&D expenses increased by 16%, primarily due to continued investment in our AI capabilities. Operating profit increased 48% year over year to RMB 373,000,000, while adjusted operating profit increased 21% to RMB 696,000,000, lifting adjusted operating profit margin to 8.8% from 7.8% in the same period last year.

Net profit increased by 55% year over year to RMB 339,000,000, while adjusted net profit increased 25% to RMB 704 million and adjusted net profit margin reached 8.9%. As of June 30th, 2026, we had cash and cash equivalents, time deposits and short term investments of RMB 24.3 billion or 3.6 billion U.S. dollars.

In June, our Board approved a new two year 300 million U.S. dollar share repurchase program. Under this new program, a total of 1.9 million shares had been purchased for a total cost of 31 million U.S. dollars as of June 30th, 2026. From the beginning of the year through today, a total of 5.8 million shares had been purchased for a total cost of 118 million U.S. dollars.

Moving forward, we will continue to evaluate market conditions and execute our repurchase program according. To enhance long term shareholder value. Thank you for your attention. We would now like to open the call to your questions. Operator, please go ahead.

Operator

Thank you, dear participants. As a reminder, if you wish to ask a question, please press *11 on the telephone keypad and wait for your name to be announced. To withdraw a question, please press *1 on one. Again, for the benefit of all participants on today's call, if you wish to ask a question to management in Chinese, please immediately repeat your question in English.

The company will provide consecutive interpretation for the management statement during the Q&A session. Please note that the English interpretation is for the convenience purposes only. In the case of any discrepancy, management statements in their original language will prevail. And now we're going to take our first question. Just give us a moment and the question comes line of Lincoln Kong from Goldman Sachs. Your line is open. Please ask the question.

Lincoln Kong

Thank you management for taking my question and Congrats on a very solid quarter. So looking back over the past few years, short form contents have surged, while the average length of the long form video has also steadily decreased. But Bilibili has sustained a very healthy growth throughout this dynamic. So what's driving this resilience? And looking ahead to the AI era, how do we expect a user preference and the consumption habits to evolve over time? Thank you.

Ray Chen

Actually over the past few years, we've see explosive growth for both short video content and long form content and the shorter form content grow much faster. And looking at Bilibili, we're not choosing the length of the content to to be focused on, but rather we are focusing on good content, high quality content. And naturally, for those high quality content, they are generally more inclined to be in the format of long form, mid to long form.

We believe whether it's whether the lens of the content or on the device of the consumption scenario, the ultimate goal from. Well, over the past year we do see exponential supply growth for short video content. But over time, as people are used to the have watched enough low quality repetitive content, they naturally develop a taste for high quality content.

They are no longer satisfied with the content that just grab their attention for one second. They care more and more about whether the time they spend on the content is actually worth it. And that is exactly why Bilibili have been able to keep growing. In the past few years we have been focusing on providing a high quality content that is interesting, in depth and really connects with user emotionally and that's why user are willing to slow down and spend their about intentional time on visibility.

The reason why Bilibili are able to constantly create, curate high quality content for two reasons 1 is that we have amassed a very talented group of content creator who believes in the community, who believes in the Bilibili platform. Secondly is over the past decade we have. Viewed a very engaging community with a lot of user who truly appreciates high quality content.

They have the view of what is good, good high quality content and forms a community that appreciates and also can select and. Define the quality. What is the good quality content they can choose? And promote among millions of daily video submissions and allow this high quality content and talented content creator to emerge from our platform.

Second quarter our monthly user interaction were over 17 billion, up 9% year over year. Long comments that over 100 characters grew even faster to abide 67%. This high level of real human interaction help us to better identify high quality content. And regarding in the AI era, how the video landscape is going to change, we believe that AI, the the AI tools will exponentially unleash the supply of. Video content and overtime the. High quality content is the only solution or the only answer.

Among those oversupply of video content. We believe over time only high quality content will have viewership. Those low quality content will have no trust. In the AI era, I will be very focused on 2 aspects. One as on video creation, content creation, second as on content. Distribution, First of all, on the content creation, I will pay very close attention to those content creator with high intelligence and high creative power, how they are leveraging AI to create content to. Realize their creation into actual work we believe the repetitive low quality content will have no room to for survival but those.

Talented content creator will be extremely beneficial from this evolution of creation tool. And in the past half year, we have been paying very close attention on this aspect and it's generating very positive results. As a matter of fact, in the second quarter, our monthly content submission increased by 28%. This is a hard, hard evidence to support the AI tool is enlarging, enhancing, uplifting our creators a creative output.

Secondly, on content distribution, compare with the short videos that only have these seconds to longer form videos, much comprehensive information and structures, traditional recommendation algorithm often struggle to. Fully understand and recommend this type of content and also. So user generally have more complex intent when they come to choose much longer form content.

That's why we are focusing on our AI, on helping our content distribution become more efficient. And we think this new generation of AI tool is helping us to comprehend, understand the content, the meaning of the content and better understand our user intention. And here's a few numbers to support our progress. In second quarter, DAU grew by 7% year over year and our total user time spent increased by 14% year over year.

And the number of creator with over 1000 followers provide 30% year over year. What if the driver behind those numbers are from using AI to make our algorithm working better? That concludes the first first question answer. Operator, next question please.

Operator

Perfect. Thank you so much. Now we're going to take our next question. And the question comes to the line of Yan Liu from Morgan Stanley. Your line is open. Please ask your question.

Yan Liu

Let me translate my question. My question is about the advertisement business. Since 2 Q, we start to see weakening macro and consumption data in China. How to think about the future second-half advertisement business growth? And also what is the marginal change for the advertisement from the AI industry? And also could management help to breakdown the two Q and the second-half advertisement growth driver? And also in second-half, we start to have a little bit higher base, which verticals can support the advertisement business to sustain relative high growth? Thank you.

Ray Chen

The second quarter, despite macroeconomic pressure on consumer spending, our ad business delivered a very strong performance with revenue reaching 3.13 billion Army up 28% year over year. This resilient growth reflects a strong market recognition of our user base and our community value. More and more advertiser realized it's it's a must. Platform for them to gain access to the young generation. We also achieved early success in our vertical industry strategies and our AD scenario. Expansion

Our content ecosystem users time spent on AI related knowledge. Content search by 72%. Year over year, Bilibili has become the largest AR learning video. Community across the Internet as user actively come to our platform to track and learn about large language models and AI tools. At the same time, AI spend, ad spend from AI factor grew by over 100% year over year in the second quarter, benefiting from the strong match between AI target audiences and our user base as a as AI as a major long term trend, we expect continuous demand from various clients across different stages and we remain very optimistic about this incremental.

As for the second-half outlook, we're seeing that more advertisers and entire conversion efficiency. In the short term, but at the same time they also want channels that deliver sustained long term impacts rather just one off. Impressions to help them to be lasting brand value. They are also prioritizing their limited budget on high value users with genuine, genuine purchasing power. All of these demands precisely match with billability. Unique.

Bilibili user now is 26.5 years old, making them the primary driver or the main consumption force in the current Chinese society over the past 2. Years. They also have established a strong purchasing mindset on Bilibili. Demonstrating a clear winning list to buy products recommended by the platform or by the content creators. In the second quarter, our top five ad verticals were gain, consumer electronics, Internet services, e-commerce and automotive, while our total advertiser base expanded by 14% year over year.

Unlike other platforms, we have a multi stream, multi scenario strategy that allows the ability to accompany users seamlessly throughout their day, whether it's listening or watching Bilibili during commute or casting Bilibili content on TV screen at home with their family or using our apps or iPad during spare time. Across this different screens user can watch and upload video, interact Google chat, commentary, search their favorite client and all creators during live stream, watch anime or documentaries and play games and ads naturally follow users who have their daily touch.

That's why in the first half of this year you see in app search, Watch page, Smart TV, portal, PC and mini programs. Have all unlocked valuable new ad inventories with revenue. From this multi scenario, placement grew by 50% year over year. Last but not least is AI is also empowering our efficiencies from several angles more including improving our user comprehension, including user profiling, content matching, ad creative generation and algorithm efficiency to continuously lift our monetization.

And also we have launched our automated ad placement system that also has made it much easier for new advertisers to join us. This is driving a double digit growth for our new advertisers client base. As you mentioned, it is it is indeed a very challenging macro environment and there will be a lot of changes among across different industry players. However, given what we just mentioned, we still. Remain quite confident about our continuous growth for our. App business. Thank you. Operator, next question please.

Operator

Yes, of course. And now we're going to take our next question. And the question comes line of Danielle Chan from JP Morgan. Your line is open. Please ask your question.

Danielle Chan

So my question is on the online game. So the company just share quite a lot of information on the game pipelines. I was wondering which one is the most anticipated ones and also what's the expectation for the launch timing and on. And besides this Samo, the Three Kingdom strategy game has has been launched for two years. So how do we look at the the future performance of this game? Thank you.

Ray Chen

From the second-half to next year, it will be a harvesting season for Bilboil Games. We do have several exciting titles lined up for launch. The first title in our pipeline is Boomi Master. Boomi Master is self billability, self developed like casual like casual game that involves pack catching and simulation gameplay. It received a lot of positive feedback during its global test in May and also recent testing feedback has been very well.

We are planning for a global launch in September 17th next month and we have innovate. We have developed developed a very innovative gameplay. And artistic profit designs to cater to young generations needs we believe with its lighter gameplay and appeal to younger. Players, we hope this game can catch a broader casual game. Audiences on a global base, especially for young gamers.

The second title in our platform is Sun Wang, which is a strategy game officially licensed from the Classic. Three Kingdom I sangoji 3 Kingdom IP we expect to. To launch this game towards end of this year. Compared to some MO, it targets a more mature audience with a strong interest in IP and both of the visual style and gameplay have been significantly upgraded from the classic IP.

And why? We are launching another Three Kingdom I title. We think it really complements. Symbol in both gameplay and target audiences, and it can further strengthen our presence in the strategy game genre. We also gain a lot of valuable feedback from the second better testing we just finished and we will continue to fine tune this game, we hope. Our goal is to build another strategy game that can be lasting. And popular for our audiences.

And beyond that, we have also introduced several new pipeline titles in the Bilibili world and will be launched next year. The first one is 3 Kingdom, The Ravage of Time. Then go for full. This is another self developed title that. That is focused on tactical RPG genre. This title is based on a classic manga IP with a history of over 20 years and Bilibili platform. Has also produced and published the anime that based on this IP.

Our goal is to make this classic IP revitalize this classic IP and make it a great tactical RPG for younger generation. And the second title for next year is Ro 3. Meatless to say, this is. Is a very classic IP with a large audiences that last over 20 years. It's a very classic MMORPG and we've received a lot of users demand for bringing this. Back to them. That is why we have signed and licensed. This IP and hopefully to bring this classic IP back to its fan base.

Currently, this game has already. Securities license and we actually we started to. Launch technical testing today with. Mainland Currently the user feedback has been quite positive and we are targeting to launch this game next year. To answer your question on our classic Sammo game, this game has just celebrated second year anniversary. With a major update in June and the new content has been well received by. Our players as matter of fact, from Season 8, our first anniversary season last year throughout Season 15, our 2nd anniversary season in this year Demo has ranked among the top five on the ILS top closing chart every game season, which is quite impressive.

And for this game, our goal has remained unchanged. Our targets to be that the lasting strategy game that can accompany the gamers for life and our goal or strategy for game business remain to focus on the vertical genre to either do become the best or first in its own own segment and make sure every title has a long life cycle that that is the strategy we'll continue to be focusing on.

When I mentioned touch based on the N card thing which was recently. Launched officially, we've noticed that the LTV for July. Version has doubled compared to the April version and we. Plan to launch the game Season 2 in October. With a focus on improving long term retention and adding more and interactive fun gameplay you would know. That recently we have launched many different Three Kingdom IP titles, including the Live casual poker game and also we have Immersive Hardcore.

Strategy game like Samoan sanwang the reason why we. We are exploring this IP in a such dynamic way is first of all, we think that there's a lot of overlaps for users who are interested in this IP and they can. Cross sell from each other. And secondly is that we have a very and very high quality video community that with a lot of gamers who can share the experience and promote this game and also provides a very good platform for us to engage with user and continue to improve our game.

That is why we are hoping to achieve long term operation across different IPS and different titles. And continues to provide good gaming experience for our. For gamers, that concludes this question. Operator, next question please.

Operator

Thank you so much. Now we're going to take our next question. And the question comes line of Shuai Ching Jiang from CICC. Your line is open. Please ask your question.

Shuai Ching Jiang

Thanks management for taking man My question and congratulations on the solid quarter. My question about AI, the company discussed how AI has improved its advertising and help increase EC plan at the USA. Could management elaborate a little more on how AI is enhancing these community ecosystem, user engagement and different baselines? In addition, how much of the previously announced 1 billion in Arkansas related CapEx has been deployed so far and what's the expected pace of spending going forward? Thank you.

Ray Chen

Well, we believe AIS already are consensus for the next era. And for us, it's not it not to think about how important AIS for us is to think about how we will use AI in our own business. As a matter of fact, there are a lot of things in the AI chain we won't be engaged with. The things where we invest will be very closely tied to our core business, which is video and to be more specific, some three areas, video understanding, video distribution and video creation. All of our investments will be strictly focused on those 3.

First of all, AI is helping us to better understand both content and users. Bilibili has a huge amount of video library and this video carries much more information and you our user have a very diverse interest. So be able to better understand the value of our content. That the meaning of the content and what user want is a key component in both improving user experience and our commercialization efficiency.

With AI. We're improving our video understanding, search and recommendation capability. It is helping users to find content they are interested the more efficiently matter, while helping our ad system to better match ads with users needs. And for us, this investment not only is working on our user growth, it is also working on on our commercialization results.

And secondly, is AI is helping creating new types of content and unleashing productivity on Bilibili. As I mentioned, we are very focused on seeing those high quality content creator, talented content creator, how they are using leveraging AI to produce good content. And in the past two quarters, we've seen so many good examples of how AI tools is unleashing those talented brains to bring good content on our platform.

We're seeing some animation or film content that is to require a whole professional team or even a company to create. Now can be created by. Individual content creators that the quality is so premium that they achieved 10s of millions of video views. We're also seeing AI inspire new types of content across animation, film, music, auto tune, remix categories. It is truly unleashing their the creator's talent, their talent, their creativity.

We've seen a surge in content submission and the number of high quality content videos are emerging on our platform. Here's a very vivid example for your reference. In May, we launched our creator animation campaign on our platform. Just in three months, this videos in this campaign has generated 270 minutes of watch time and over 180 million views and six series each surpassing 10 million views.

Those are the perfect example of how AI tools is helping buildably to unleashing creators output and unleashing the supply of high quality content.

Sen Fan

This is Sam. As Mr. Ken mentioned, our AI investment were highly forecast regarding our previous of one day R&D, which is well on track. You have already achieved 70% to 80% of this in the first half of the year, primarily on the procurement of servers, computing power. This was expected to incur R&D expenses for the whole year 26 by 500 million RMB, which remain. Enchant. Operator, next question please.

Operator

Yes, of course. And now we're going to take our last question for today. And the question comes line of Thomas Chong from Jefferies. Your line is open. Please ask your question.

Thomas Chong

Thanks. Good evening. Thanks management for taking my questions and congratulations on a very solid set of result. My question is how does management view the margin upside, of course a different business line on AI. How should we think about AI empowerment to fix cost leverage and rooms for the lowering in OpEx ratio? And any color about the AI spending over the next couple of years? On the other hand, how to management view the potential upside or downside to margin in second-half and 2027? And lastly, what are management thoughts on capital allocation? Thank you.

Sen Fan

Thank you. This is Sam. I will take your question. In Q2, our financial performance continued with strong momentum. Both revenue and gross profit grow nicely, with our gross profit margin expanding to 7037.2%, marking the 60 consecutive quarter of sequential improvement. Meanwhile, our operating leverage continued to expand. Net profit grew by 55% year over year and our adjusted net profit margin increased to 8.9%.

Looking at the mid to long term, we believe there's still significant role for PDB's commercialization driven by the sustained and healthy development of our business lives, more efficient operation against empowered by AI. We are highly confident in our future probability improvement. First, our high margin advertising business continue to grow and has become our largest revenue contributor accounting for 39% of total revenue.

Despite some macroeconomic no pressure, we expel advertising revenue to maintain a sustainable and healthy growth trajectory going forward. On games, we have a robust pipeline of five new titles set to launch in Q4 of this year and into next year. We are confident that our gaming revenue will resume a year over year growth trend starting in the fourth quarter.

We remain confident in our future profit expansion and our Mr. lump sum target remains unchanged. A gross profit margin of 40 to 45% and the operating operating margin around 15 to 9 or 20%. We are confident in maintaining healthy revenue growth when continuously improving our operating efficiency also to drive the profit, you know realization. We will carefully balance our AI investment with commercial monetization and we firmly believe that today's investment will play a virtual role in BDB substantive development in the future.

Regarding to the shareholder return, the lowering shareholder return is also a priority for us. From the beginning of this year to date, we have execute accumulated 118 million U.S. dollar in share repurchases. In June of this year, our Board of Directors approve a new 300 million U.S. dollar share repurchase program. As of the end of June, we are already repurchased 1.9 million shares for over 31 million U.S. dollars under this new program.

Going forward, we will continue to execute repurchase and doing approaching made to the market windows for quick long term sustainable value for our shareholder. Thank you, operator. That concludes our question and answers.

Operator

And that concludes the question and answer session. Thank you once again for joining Billy Billy's second quarter 2026 financial results and business update conference call today. If you have any further questions, please contact Juliet Jiang, Billy Billy's Executive IR Director or PR Centre Financial Communications. Contact information for IR in both China and the US can be found on today's press release. Thank you and have a great day.

Details at Bilibili IR

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