Bilibili's Q1 2025: Unpacking Key Contradictions in AI Strategy, Margins, and Gaming Growth

AI integration and user experience, gross margin expectations, game business growth expectations and pipeline, advertising revenue growth drivers, AI integration strategies and user experience enhancement are the key contradictions discussed in Bilibili's latest 2025Q1 earnings call.



Revenue Growth and Margin Expansion:
- Bilibili Inc. reported total revenues accelerated year-over-year by 24% to RMB7 billion, driven by strong performances in their high-margin advertising and game businesses.
- The growth was attributed to enhanced product offerings and infrastructure upgrades, particularly with the sustained popularity of the SLG title San Mou.

User Engagement and Content Diversification:
- The average daily user time spent rose to a record 108 minutes, with monthly paying users reaching an all-time high of 32 million.
- This increase was driven by the expansion of content categories like AI, travel, and home appliances, which saw significant year-over-year growth in watch time, attracting a broader audience.

Advertising and Game Business Performance:
- Advertising revenues were up 20% year-over-year to RMB2 billion, with game revenues rising by 76% year-over-year to RMB1.73 billion.
- The advertising growth was driven by Bilibili's high-value user base and strong brand association with quality content, while game revenue growth was supported by the continuing success of San Mou and legacy titles like Azur Lane and FGO.

Operational Efficiency and Cost Control:
- Gross profit increased by 58% year-over-year, with gross profit margin expanding to 36.3%.
- The operational efficiency was supported by the rising share of high-margin gaming and advertising revenues, contributing to a stable cost structure and improved profitability.