格隆汇发布哔哩哔哩2Q25更新报告

In line with market expectation. In 2Q25, revenue was at RMB7.3 billion (beat market consensus by 1%), increasing by 20% year-over-year. The non-GAAP net income reached RMB562 million (beat the consensus by 4%). Quarterly performance was in-line with market expectation. For active users, DAU/MAU increasing by 7.3%/8% year-over-year at 109 million/363 million, respectively. Users even accelerated in 2Q25, compared with 1Q25 (DAU/MAU+4.5%/7.8% year-over-year in 1Q25). User engagement DAU/MAU remains at around 30%. Average daily time spent per user was 105 minutes, continuing to grow by 6% year-on-year. Adjusted operating margin beat consensus at RMB573 million, primarily due to disciplined SG&A expenses.

Stock pullback driven by high expectations. The release of investor days (strong advertising in the second quarter, game pipeline in the second half of the year), and the stabilization of turnover during the season of San Mou and the hot opening of Bilibili World (the largest in history). The participants for Bilibili World and Bilibili Macro Link event this year reached record high. The three-day event attracted more than 400,000 participants, increasing by 60% year-over-year. It serves as one of the largest offline animation exhibitions in China. However, after the release of 2Q25 results, the actual growth of the game has not exceeded the guidance too much, and combined with the recent strong stock price, and the outcomes may disappoint many optimistic funds.

Gaming Segment: San Mou appears enduring strength. In 2Q25, mobile games segment achieved the revenue of RMB1.612 billion, in line with market expectation of RMB1.61 billion, with a year-over-year increase of 60%. The deferred revenue balance at the end of 2Q25 increased Rmb391 million sequentially. It suggested a meaningful improvement, compared with RMB46 million quarter-over-quarter increase at the end of 1Q25. Firstly, during the period of anniversary event of San Mou on June 30 2025, the DAU reached a new record high; secondly, in Season 8, the team validated an important operational method, namely the skin draws card mode; thirdly, San Mou is expected to launch a traditional Chinese version by the end of 2025, and plans to consider overseas regions like Japan and South Korea next year. In addition, there are several games in the pipeline, including Escape from Duckov, Trickcal RE:VIVE, and one more casual game of the Three Kingdoms IP. Those new games will further expand company’s presence in the gaming space.

Steady Growth on Advertising Segment: In 2Q25, the growth rate was 20% for advertising revenue, generally in line with company guidance. During the conference call, the company strengthened the advertising infrastructure by upgrading the recommendation algorithms, creative generation, and intelligent ad placement to improve conversion efficiency. It drove the growth of advertising business. Also, AIGC advertising tools to help the advertisers to generate a covers, titles, and content tailored to users' language and creative style at scale. Currently, about 30% of the advertising covers are AI generated and there will be more room to push the number forward. Furthermore, the company offers smart advertising placement tools to allocate, sequence, and monitor ad performance in real time, significantly reducing manual operations at the same advertising spending. These enhancements are boosting both efficiency and scalability. It improved ECPM by more than 10% year-over-year and fueled around 30% year over year growth in performance-based advertising revenue in 2Q25.

Share repurchase strengthens shareholder’s return. In 2Q25, the company repurchased approximately 5.6 million shares of Class Z ordinary shares (equal to 5.6 million ADS), totaling $100 million. At the end of 2Q25, these shares have been retired. According to the $200 million share repurchase plan approved by the board of directors in November 2024, as of June 30, 2025, the company has repurchased a total of 6.4 million shares at a total cost of $116 million, with approximately $84 million remaining available for future repurchases.

On the path to long-term profitability. Bilibili’s stock is currently trading at US$23.76 per ADS, with an enterprise value of US$8,629 billion. Consensus estimates for CY2025 and CY2026 EBITDA are US$447 Million and US$590 Million, respectively, translating to EV/EBITDA multiples of 19x and 15x for CY2025 and CY2026. This compares to the peer group, which is trading at 16x and 14x, respectively. While Bilibili is expected to be at a turning point in achieving long-term profitability by 2025, its current valuation appears relatively high compared to peers. However, Bilibili is still on the turning point of making steady profit. Management reiterated that it is expected to achieve an adjusted EBIT margin of 10% in 4Q25 and long-term EBIT margin target is 15%-20%. As the company gradually moves towards a steady-state profit margin level in fiscal 2025, the company's EBITDA will increase significantly, and EV/EBITDA will become significantly lower than its peers in FY2026-FY2027. For current growth rate, the company maintained a high growth rate of 60%/20% in the game/advertising business, respectively, and overall quarterly revenue growth was 20% year-over-year which was higher than the growth rate of its peers.