(Yicai) March 6 -- Shares of Bilibili fell despite the Chinese video-sharing and gaming platform swinging into the black last year for the first time after revenue from advertising surged.

Bilibili [HKG: 9626] dropped 1.5 percent to HKD207.40 (USD26.52) a share as of 10.30 a.m. in Hong Kong today, after earlier tumbling by as much as 4.9 percent. Its New York-listed stock [NASDAQ: BILI] plunged 7.1 percent to USD25.55 yesterday.

Net profit was CNY1.2 billion (USD174 million) in the 12 months ended Dec. 31, compared with a net loss of CNY1.4 billion the previous year, Bilibili said in an earnings report released yesterday. Revenue rose 13 percent to CNY30.4 billion (USD4.4 billion).

Income from advertising surged 23 percent to CNY10.1 billion, from gaming jumped 14 percent to CNY6.4 billion, and from value-added services, which include membership subscriptions and livestreaming, rose 8 percent to CNY11.9 billion, Bilibili noted.

2025 was a milestone year for Bilibili as the Shanghai-based company recorded its first full-year profit based on generally accepted accounting principles, Chairman and Chief Executive Officer Chen Rui said in the report.

Bilibili will focus on two priorities going forward, Chen noted at the earnings conference call. First, maintaining and strengthening its high-quality content ecosystem, and second, enabling creators on the platform to enjoy longer lifecycles and greater commercial returns, he stressed.

Bilibili has fully integrated artificial intelligence into its platform ecosystem over the past year, it noted. By adopting cutting-edge large language models, it has achieved more precise matching and optimization in content discovery and ad delivery, it said, adding that AI-generated content tools offered to creators and advertisers have lowered barriers for content creation and advertising placement.

"AI is a transformative force that can deepen user engagement, improve distribution efficiency, and expand creative space," Bilibili said. The number of monthly paying users reached a record high of 34 million last year, mainly boosted by gaming and value-added services, it added.

Bilibili's user growth was thanks to the continuous expansion of high-quality content on the platform, according to Chen.

For the fourth quarter, Bilibili's net profit soared 478 percent to CNY510 million (USD73.9 million) from a year earlier. Revenue rose 8 percent to CNY8.3 billion, with advertising up 27 percent to CNY3 billion, value-added services up 6 percent to CNY3.3 billion, and gaming down 14 percent to CNY1.5 billion.

Bilibili's advertising revenue jump was driven by the healthy growth of the platform ecosystem with rising users and creator output, as well as various proactive measures from the company, including increasing ad load ratios, improving ad efficiency, and rolling out AIGC ad tools, according to Dolphin Investment Research. Favorable industry trends also played a part, as short dramas, mini-games, AI products, and other content are naturally well-suited to its user demographics.

Editor: Martin Kadiev