Bilibili Inc

Bilibili Inc. announced the completion of its US$500 million marketed offering of convertible senior notes due 2031, along with a concurrent equity placement and a delta repurchase. The company repurchased 6,795,540 Class Z ordinary shares at the reference price of HK$115.38 per share as part of the Concurrent Delta Repurchase, which is one component of a separate special share repurchase program of up to US$300 million. The Concurrent Equity Placement, totaling 33,351,660 Class Z ordinary shares, included 6,976,760 shares borrowed from third parties and 26,374,900 shares sold by a Tencent subsidiary. The company also repurchased approximately US$100 million of its shares in the overall transaction, while Tencent's subscription for an additional US$200 million in notes and the company's repurchase of approximately US$200 million of shares from Tencent remain subject to shareholder approval at an extraordinary general meeting.

Bilibili reported its 16th consecutive quarter of gross margin improvement, with advertising revenue jumping 28% year over year to RMB 3.13 billion in the quarter ended June 30, 2026, while total revenue grew 8% to RMB 7.94 billion and GAAP net profit rose 55%. The advertising segment, which saw AI-driven ad revenue more than double and search ad revenue double, helped push gross margin to 37.2% from 36.5% a year earlier, and non-GAAP adjusted net profit climbed 25% to RMB 703.6 million. However, mobile games revenue fell 14% to RMB 1.39 billion due to a tough comparison with San Guo: Mou Ding Tian Xia's prior-year performance, though CFO Sam Fan expects games revenue to return to growth in the fourth quarter, supported by the global launch of Lumi Master on September 17, 2026, and a new licensed strategy title. The company repurchased 5.8 million shares for $118 million and approved a new two-year, $300 million buyback program, while daily active users rose 7% to 116.5 million and daily time spent increased to 113 minutes. Management flagged a challenging macroeconomic backdrop in China, with advertisers prioritizing conversion efficiency, and value-added services grew just 5% to RMB 2.97 billion, the slowest among major segments.

Bilibili reaffirmed its mid- to long-term profitability targets of a 40% to 45% gross margin and a 15% to 20% operating margin, while announcing a September 17 global launch for its game Lumi Master. In the second quarter, total revenues rose 8% year-over-year to RMB 7.9 billion, with advertising revenue up 28% to RMB 3.1 billion and gross margin expanding to 37.2%, marking the 16th consecutive quarter of improvement. Net profit increased 55% to RMB 339 million, and adjusted net profit rose 25% to RMB 704 million. The company also noted that gaming revenue, which fell 14% to RMB 1.4 billion, is expected to resume year-over-year growth in the fourth quarter. Additionally, the board approved a new two-year USD 300 million share repurchase program.

Bilibili provided an update on its two-year, $300 million share repurchase program initiated earlier in June 2026. As of June 30, the company had repurchased 1.9 million of its listed securities for a total cost of approximately $31.3 million under this program. For the first six months of 2026, total repurchases reached 4.8 million securities at a cost of about $100.1 million. The activity reflects ongoing capital structure management and a commitment to shareholder value.

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Bilibili's board of directors has authorized a new share repurchase program of up to $300 million. The program covers the company's Class Z ordinary shares and American depositary shares over the next 24 months, effective June 24, 2026. Bilibili intends to fund the repurchases from its existing cash balance. The board will review the program periodically and may adjust its terms and size.