Bilibili Holds Steady Amid Mixed Financial Projections

Morgan Stanley analyst Yang Liu CFA has maintained a Hold rating on Bilibili, citing mixed financial projections. The company's game revenue is expected to decline due to a high base effect from the previous year, while its advertising segment shows promise with a projected 20% year-over-year growth. The valuation remains relatively high at approximately 25 times the 2026 estimated P/E.

Bilibili Inc. (NASDAQ: BILI), a leading Chinese video streaming platform, has reported robust financial results for the second quarter of 2025, marking its first profitable quarter. The company's revenue grew by 20% year-over-year, reaching RMB7.34 billion (US$1.02 billion), driven by strong performances in its mobile games, advertising, live broadcasting, and e-commerce segments. Additionally, Bilibili's premium membership program and sales of virtual items contributed significantly to the revenue increase [1].

The company's net profit improved dramatically, reaching RMB218.3 million (US$30.5 million) compared to a net loss of RMB608.1 million in the same period last year. This represents a 136% improvement in the company's bottom line. The gross profit margin also expanded to 36.5% from 29.9% a year ago, indicating enhanced monetization efficiency. Notably, the company's user metrics showed solid growth, with daily active users (DAUs) increasing to 109.4 million, up 7% year-over-year, and average daily time spent reaching 105 minutes, up 6 minutes compared to a year ago [1].

Bilibili's mobile games segment saw a particularly strong performance, with revenue surging 60% year-over-year to RMB1.61 billion. The company's advertising business also grew by 20%, driven by the effectiveness of its AI-powered ad tools. The platform's premium membership program and sales of virtual items also contributed to the revenue increase, with the number of monthly paying users increasing by 9% year-over-year [1].

The company's financial flexibility has been bolstered by a robust cash flow of RMB1.99 billion and a strong balance sheet with RMB22.29 billion in cash and equivalents. Bilibili also completed a US$690 million convertible notes offering at a favorable 0.625% interest rate, reflecting market confidence in the company's financial trajectory [1].

Looking ahead, Bilibili aims to maintain its momentum by delivering premium content experiences that resonate with young audiences, fueling user growth and deepening engagement. The company will continue to unlock the full commercial potential of its vibrant ecosystem while focusing on efficient, sustainable, and profitable operations [1].

However, analysts have expressed caution regarding the company's future growth. Morgan Stanley analyst Yang Liu CFA has maintained a Hold rating on Bilibili, citing mixed financial projections. The company's game revenue is expected to decline due to a high base effect from the previous year, while its advertising segment shows promise with a projected 20% year-over-year growth. The valuation remains relatively high at approximately 25 times the 2026 estimated P/E [2].

References:
[1] https://www.stocktitan.net/news/BILI/bilibili-inc-announces-second-quarter-2025-financial-8n81if21lt7r.html
[2] https://www.stocktitan.net/news/BILI/bilibili-inc-announces-second-quarter-2025-financial-8n81if21lt7r.html