Good day, and welcome to Bilibili Fourth Quarter and Fiscal Year 2025 Financial Results and Business Update Conference Call. Today's conference is being recorded. At this time, I would like to turn the conference over to Juliet Yang, Executive Director of Investor Relations. Please go ahead.

Thank you, operator. During this call, we'll discuss our business outlook and make forward-looking statements. These comments are based on our predictions and expectations as of today. Actual events or results could differ materially from those mentioned in today's news release and in this discussion due to a number of risks and uncertainties including those mentioned in our most recent filing with the SEC and Hong Kong Stock Exchange. The non-GAAP financial measures we provide are for comparison purposes only. The definition of this measure and the reconciliation table are available in the news release we issued earlier today. As a reminder, this conference is being recorded. In addition, an investor presentation and a webcast replay of this conference call will be available on the Bilibili IR website. Joining us today from Bilibili senior management are Mr. Rui Chen, Chairman of the Board and Chief Executive Officer; Ms. Carly Li, Vice Chairwoman of the Board and Chief Operating Officer; and Mr. Sam Fan, Chief Financial Officer. I will now turn the call to Mr. Chen.

Thank you, Juliet, and thank you to everyone for joining us today. 2025 was a marquee year for Bilibili. We delivered standout results across both our community growth and financial performance. Throughout the year, our user growth regained its momentum while engagement and stickiness consistently hit new record highs. We also made incredible strides on the commercial front and achieved our first-ever full year of GAAP profitability. Looking at our community, momentum really picked up speed toward year-end. DAU growth accelerated every single quarter year-over-year, up 4% in Q1, 7% in Q2, 9% in Q3 and 10% in Q4, hitting 113 million users. Q4 MAUs also grew by 8% year-over-year to 366 million. While much of the Internet is still flooded with fast food content, more and more people are gravitating toward depth and quality. They're spending more time on high-quality PUGV content and the authentic community interactions that Bilibili is known for. In Q4, average daily time spent continued to rise, up 8% to 107 minutes. This strong momentum reinforces our conviction that users are elevating their content consumption, and we believe the shift gives us a massive long-term runway ahead. As our users dive deeper into the content they love, their willingness to spend continues to rise. This is reflected in our MPUs, which surged 21% year-over-year to a record 36 million. Users' growing spending power is also extending beyond direct payments. Bilibili has become a trusted destination for consumption decisions where users don't just watch but actively research and embrace new products. AI is a prime example. A growing number of AI advertisers now view Bilibili as the go-to platform to reach curious young minds. By leveraging our interactive community, they can turn exposure into real user conversion and lasting influence. These strengths combined with our refined ad infrastructure drove a 27% year-over-year increase in advertising revenue in Q4, once again exceeding expectations. The power of our community and commercialization engine and its potential is also showing up in our financial results. 2025 marked a major milestone as we reached our first full year of GAAP profitability alongside solid revenue growth. For the year, total revenues grew to RMB 30.3 billion, up 13% year-over-year, and we reported a GAAP net profit of RMB 1.2 billion. In Q4, total revenues increased by 8% year-over-year to RMB 8.3 billion, gross profit grew 11% and gross profit margin rose to 37.0%, marking our 14th consecutive quarter of margin expansion. With disciplined cost management and stronger operating leverage, our adjusted net profit nearly doubled to RMB 878 million, and our adjusted net profit margin expanded to 10.6%. By the start of 2026, the average age of our users reached 26.5. They are moving into higher income brackets with greater spending power and more diverse needs. As they move into new stages of life, we are growing with them, expanding our commercial opportunities and unlocking more value across every touchpoint in our ecosystem. To better serve our evolving community, we are integrating AI into every corner of Bilibili. To us, AI isn't just a buzzword. It's a practical tool that expands human creativity, increases connection and boosts distribution efficiency. By leveraging tier LLMs, we've made our content discovery and ad targeting sharper than ever. We are also providing AIGC tools that help creators and advertisers get started more easily while AI translation is helping our best content to reach a global audience. The more we invest in these capabilities, the more confident we are that AI will take our ecosystem and our business to the next level. With that, let me walk you through the core pillars of content, community and commercialization. Starting with content and community. The biggest takeaway from our 2025 story is that in a world full of short and disposable content, demand for high-quality content and authentic community connection is only getting stronger. We've leaned into this trend by deliberately allocating more resources to promoting high-quality content and fostering welcoming interest-driven communities. The results are clear. In Q4, average daily time spent reached 107 minutes, up 8% year-over-year, while watch time for videos longer than 5 minutes grew by more than 20%. Our commitment to quality content across categories is driving higher user engagement and time spent. In Q4, watch time of lifestyle content grew by more than 30%, while Chinese anime and game-related content increased by 56% and 24% year-over-year, respectively. Notably, in July 2025, we officially launched a video podcast initiative and quickly established an early lead in this impactful format. Our highly engaged community played a key role in driving its rapid adoption, sparking more meaningful discussions among users. In the second half of 2025, total watch time for video podcasts exceeded 8 billion minutes. In 2025, AI became a powerful amplifier of our content ecosystem, driving engagement, unlocking creativity and accelerating the discovery of high-quality content. Total watch time for AI-related topics surged 53% year-over-year in Q4, cementing Bilibili's position as the go-to platform for AI learning. Beyond consumption, AI is streamlining the creative process and even reshaping how content is made. A great example is AI music. Creators are now turning simple ideas into professional-quality music videos with ease. In the fourth quarter, the number of AI music videos reaching the million-view milestone grew over fivefold year-over-year. At the same time, AI-driven distribution helps high-quality work find its audience much faster. This is especially beneficial for emerging creators. In Q4, the number of creators with over 1,000 followers increased by more than 30% year-over-year. As creators build larger audiences and stronger connections, that engagement is increasingly turning into monetization on Bilibili. In 2025, nearly 3 million creators earned income on our platform across advertising and VAS channels. And with improved commercialization efficiency, average income per creator grew 21% year-over-year. Just as importantly, users are demonstrating more and more willingness to pay for content they genuinely enjoy and creators they truly value. Last year, more than 10 million users supported high-quality PUGV content and creators through fan charging. Turning to our core community metrics. In Q4, each active user followed over 90 creators on average, up from 81 a year ago, reflecting strengthening network effects within our community. By the end of 2025, we had over 284 million official members and their 12-month retention rate remained stable at around 80%. Our creator ecosystem also balances longevity with fresh energy. This is evident in the 2025 up 100 list, where creators have been active on Bilibili for 7 years on average, while nearly 40% were first-time honorees compared with the last year. Beyond daily activity, Bilibili continues to reinforce its role as a cultural home for the young generation. Our Signature New Year's Eve Gala delivered its best commercial performance to date and has grown into an annual ritual for young audiences. During the recent Chinese New Year, we once again partnered with CCTV as the exclusive bullet chat platform, enabling young viewers to celebrate the festival together online. On the day of the broadcast, more than 133 million bullet chats were shared and DAUs reached a record high, up 16% compared with last year. Now let's talk about our commercial businesses and their progress. First, we were very encouraged to see our advertising business deliver better-than-expected results in Q4. Advertising revenues accelerated to RMB 3.0 billion, up 27% year-over-year, and full-year advertising revenues increased by 23% to RMB 10.1 billion. This industry-leading growth reflects both the rising value of our user base and our continued progress in improving ad efficiency. As users spend more on the platform, Bilibili is becoming an even more compelling destination for advertisers. In Q4, the top 5 ad verticals were games, digital products, home appliances, Internet services, e-commerce, and automotive. Home decoration was a standout with ad spend jumping over 80% year-over-year, another strong signal that our users are maturing and seeking more lifestyle-focused upgrades. AI advertisers also ramped up activity with AI-related ad budgets climbing nearly 180% year-over-year in Q4, and that momentum has carried into 2026. In 2025, we pushed AI even deeper into our commercial algorithms, boosting traffic value without compromising the user experience. The precision paid off. Ad spend aimed at deeper conversions grew by more than 40% year-over-year, and negative user feedback was cut by over 50%. We also made performance advertising faster and easier. Our smart ad delivery system and AI-powered creative tools have now streamlined campaign setups, lifting cold start success rates by nearly 300% from last year. On top of these efficiency gains, we broadened our ad inventory across the ecosystem, with new openings in search, PC, and OTT driving ad revenue in these scenarios, up by over 60% year-over-year. This rapid growth shows the untapped potential we have across our multiscreen, multi-scenario ecosystem, and we still have plenty of runway to expand further. Looking ahead to 2026, we are confident in the outlook for our advertising business. That confidence comes from rising user value and plenty of room to drive more efficiency, especially as we continue applying AI to strengthen monetization capabilities. At the same time, demand from gaming and AI advertisers remains strong, with both sectors eager to reach Bilibili's young high-value user base. With stronger tools and the supportive market backdrop, we are set to capture even more of the opportunities ahead. Turning to our game business. Game revenues were down 14% year-over-year to RMB 1.5 billion in Q4, reflecting the high base set by San Mou, San Gou: Mou Ding Tian Xia, in the same period last year. Even so, full-year game revenues still grew 14% to RMB 6.4 billion. In Q4, Season 11 of San Mou held steady, and we're focused on extending the title's life cycle by elevating the user experience and maintaining balanced monetization. On the global front, we launched the traditional Chinese version in January and plan to roll out the game across more Asian markets later this year. Meanwhile, our Evergreen titles, FGO and Azur Lane, remain stable and continue to generate reliable revenues. Our biggest surprise of 2025 was Escape from Duckov. This self-developed title was a real dark horse. It sold over 3 million copies in the first 3 weeks of its October debut and went on to become the best-selling domestic single-player game of the year and now ranks among the top 3 of all time. This success is a clear example of how we spot unmet demand and turn it into breakout hits. As AI continues to reshape the digital landscape, strong IP is becoming even more valuable. It can migrate across platforms and spawn new experiences. That is why Duckov is now moving to consoles and mobile, widening its reach and deepening its growth runway. Looking ahead, our pipeline is strong, including our exclusive casual card game NCard, San Gou, and our self-developed simulation game, Lumi Master. Our pipeline of jointly operated games for 2026 is also shaping up well, giving us a broad and diversified slate. Our strategy is straightforward: build and scale high-quality, genre-defining games that have lasting appeal for the gamers of tomorrow. As for our VAS business, users are showing a stronger willingness to pay directly for the content and services they care about. That demand drove revenues up 6% year-over-year to RMB 3.3 billion in Q4 and up 8% to RMB 11.9 billion for the full year. In 2025, our live broadcasting business maintained steady growth and gross margin continued to expand. Premium memberships reached 25.3 million by year-end, up 12% year-over-year, supported by a strong performance from our Chinese anime slate led by our hit production, Mortal's Journey to Immortality. Annual subscriptions and auto renewals remained around 80%, highlighting the loyalty and long-term commitment of our core community. Other VAS products delivered strong momentum in 2025. Revenues from our fan charging program were particularly strong, doubling for the full year with more than 10 million users directly supporting creators and high-quality content throughout the year. In closing, our progress this year underscores the strength of our content and community. Our flywheel is working. High-quality PUGV attracts and retains young users. Deeper engagement creates more value for creators and that energy is translating to a healthier and more sustainable commercialization. AI is also reshaping our industry, and we see it as a powerful accelerator of this cycle. We will continue investing in AI to reinforce our position as the platform of choice for China's most engaged young audience. With profitability achieved and momentum building, we will stay focused on what defines Bilibili: great content, a strong community, and disciplined execution that creates lasting value. With that, I will turn the call over to Sam to share more financial details.

Thank you, Mr. Chen. Hello, everyone. This is Sam. In the interest of time on today's call, I will review our fourth quarter highlights. As Mr. Chen's remarks have already covered our full-year results at a high level, we encourage you to refer to our press release issued earlier today for a closer look at our full-year results. In the fourth quarter, we continued to deliver solid top line growth while expanding margins and strengthening our profitability profile with gross margin improving for the 14th consecutive quarter and operating leverage continuing to build across the business. We entered 2026 with much greater financial resilience to build on. Total revenues for the fourth quarter were RMB 8.3 billion, up 8% year-over-year. Our total revenues breakdown by revenue stream was approximately 39% VAS, 37% advertising, 18% mobile games, and 6% from our IP derivatives and other businesses. Our cost of revenues increased by 6% year-over-year to RMB 5.2 billion in the fourth quarter while our gross profit rose 11% year-over-year to RMB 3.1 billion. Our gross profit margin reached 37.0% in Q4, up from 36.1% in the same period last year, showing the strength of our business model as we continue to scale. Our total operating expenses were down 3% year-over-year to RMB 2.6 billion in the fourth quarter. Sales and marketing expenses decreased by 9% year-over-year to RMB 1.1 billion, mainly due to decreased marketing expenses for our games. G&A expenses increased 4% to RMB 528 million, and R&D expenses were flat at RMB 921 million. Our operating profit was RMB 504 million, up 299% year-over-year. Our adjusted operating profit was RMB 838 million and our adjusted operating profit margin reached 10.1%, improving from 6.0% in the same period a year ago. Net profit was RMB 514 million versus RMB 89 million in Q4 2024. Our adjusted net profit was RMB 878 million, and our adjusted net profit margin expanded to 10.6% from 5.8% in the same period last year. Cash flow-wise, we generated about RMB 1.8 billion in operating cash flow in the fourth quarter and RMB 7.1 billion for the full year. As of the 31st of December 2025, we had cash and cash equivalents, time deposits and short-term investments of RMB 24.2 billion or USD 3.5 billion. Under our USD 200 million share repurchase program approved by the Board in November 2024, we had repurchased a total of 0.6 million shares in Q4 for a total cost of USD 14.7 million. As of the 31st of December 2025, we have repurchased a total of 7.0 million shares at a total cost of USD 131.2 million, leaving about USD 68.8 million available for future buybacks. Thank you for your attention. We would now like to open the call to your questions.

And now we'll take our first question from Lincoln Kong of Goldman Sachs.

Congratulations on the strong finish. My question pertains to the community. In 2025, we've observed accelerating growth in our user base and the time they spend on the platform. Could management elaborate on how we should view future growth potential for both users and time spent? Additionally, considering the competitive landscape, how does Bilibili plan to retain our creators and users? What is our strategy in this regard?

The main factor driving Bilibili's growth is the ongoing increase in high-quality content available on our platform. I've mentioned before that in the content industry, the competition centers around quality. Platforms that can consistently provide exceptional content will ultimately emerge as the victors, especially in today's environment where there is an overabundance of mass-produced content. In this context, authentic high-quality content is increasingly valuable and influential in gaining users' attention. Bilibili is positioned to unlock a steady supply of high-quality content because we have both the supportive environment and the talent to foster it. Our community acts as fertile ground, as we have a large user base that appreciates, recognizes, and disseminates great content. These users can identify high-quality content early on and spread it throughout our community. They don't just consume content; they give feedback that helps define what makes content good. Content creators depend on this input to enhance their work, enabling them to produce content that resonates not only with Bilibili users but with society as a whole. This type of community is crucial for content creators. While top creators might have similar experiences across various platforms, the larger group of middle or emerging creators genuinely relies on community feedback to understand what constitutes good content and the direction they should take. This is vital for the creator community, which is why Bilibili witnesses a constant influx of new content creators who flourish on our platform. Each year, when we showcase our top one hundred content creators, about a third are newcomers who have not been previously recognized. This illustrates the strength of our community—our fertile soil—that nurtures a plethora of new, talented creators. Over the past 17 years, we have been dedicated to cultivating and building this type of community, which hinges on every user's contributions and feedback. Building this close-knit community takes time and patience, and it represents our most significant competitive advantage. In contrast, purely traffic-driven models struggle to establish a community. Creators are essential to this ecosystem. We believe that high-quality content stems from the unique attributes of creators. Their distinctiveness, combined with strong production capabilities, showcases why these creators trust our platform to support their growth and creativity. Consequently, we have cultivated a distinctive ecosystem. We are optimistic about future user growth. As we've noted before, there's a noticeable trend of upgrading content consumption, and once individuals encounter truly outstanding content, they typically do not revert to inferior options. With the oversupply of shorter content, as users engage deeper with content, they naturally begin to appreciate the high-quality offerings from Bilibili more. We also have captured user attention, which is driving more individuals to our platform. Additionally, our average user age is now 26 to 27, meaning as they progress into different life stages, their content consumption patterns will evolve, accompanied by increased purchasing power, representing a long-term opportunity for growth. Regarding competition, we will concentrate on two aspects. First, we will maintain a clear focus on our positioning around high-quality content, ensuring that our platform remains a hub for in-depth expression and interest-driven community engagement. Second, we will prioritize our creators, making sure our platform supports their long-term development and enhances monetization opportunities. We are pleased with the current outcomes regarding our creators. Many have been creating content on our platform for 5 to 10 years, continuously gaining followers and adding lasting value. On the monetization front, we are actively creating more income opportunities for content creators; last year, 3 million creators earned income through our platform, with average earnings increasing by 21% year-over-year. Additionally, the number of creators with 10,000, 100,000, and 1 million followers all grew by over 20% year-over-year. These factors combined position us strongly in the competitive landscape, allowing us to continue thriving.

We will now take our next question from Xueqing Zhang from CICC.

Congratulations on the strong advertising growth in the first quarter. My question is about advertising as well. Could management share which industries and products were the main drivers behind the strong performance in Q4? We've also noticed that many AI applications have been increasing their marketing spending recently. How does management see this trend benefiting your advertising business? Additionally, could management provide some insights on the advertising growth outlook for the first quarter and the entire year of 2026?

The performance of our advertising business in the fourth quarter and for the full year 2025 met our internal expectations. Growth accelerated quarter by quarter throughout the year, increasing from 20% year-on-year growth in the first quarter to 27% year-on-year growth in the fourth quarter. We are gaining a larger share of overall ad budgets. The results highlight both the increasing value of our user base and the continuous enhancement in our monetization efficiency. The better-than-expected performance in Q4 can be attributed to the additional ad inventory we released. We continue to provide more ad placements within our multiscreen and multi-consumption products, particularly on top of feed scenarios. Areas like search, PC, and OTT showed growth of over 60% year-over-year, with some specific scenarios exceeding 200% year-over-year in ad consumption. Additionally, we're improving our ad efficiency, primarily through the integration of AI-generated content with ad creative campaigns, deeper conversion penetration, and our AI-driven smart delivery system. These factors combined improve overall ad efficiency and recommendation effectiveness. In terms of industry contributions, in addition to our strong verticals like Internet services, digital products, home appliances, and e-commerce, we are also gaining from the intensified competition in AI applications and the rapid growth of instant retail in the fourth quarter. We’re experiencing significant growth from the education sector, automotive sector, and the home and furnishing sector, all reporting double-digit growth. During periods of industry booms or increased competition, there’s often a quest for advertising budgets in the short term, with the AI sector being a clear example. However, we also see long-term opportunities arising from industry shifts and budget reallocations, though there are still challenges ahead in securing a larger share of budgets in the AI sector. For now, let's focus on the short-term impacts from the AI sector. The AI industry is contributing additional ad budgets to Bilibili, with companies focused on AI applications, large language models, and AI tools significantly increasing their spending. This trend is a clear growth driver for advertising platforms, including Bilibili. Bilibili is well-suited for AI advertisers due to our young, tech-savvy user base that is open to adopting new AI applications. Our platform fosters a community centered on high-quality content, and advertising here tends to translate into actual user engagement more effectively than pure traffic strategies. Concerning the outlook for Q1 and full year 2026, we see that the overall market remains competitive with a focus on securing existing market shares. Advertisers are becoming increasingly demanding regarding performance and efficiency, paying more attention to conversion quality after delivery rather than just the number of exposures. Our users, with an average age of 26 to 27, are in a phase where their purchasing power and influence are rapidly growing, which is the exact demographic that advertisers aim to reach. As our CEO noted, Bilibili is a community built on high-quality video content. With the ongoing evolution of AI technology, the distinction between great content and effective advertisements will begin to blur. Good advertisements can resemble excellent content, and high-quality content can also serve as effective ads. We believe this model can quickly scale on Bilibili. Over the past 2 to 3 years, our advertising products and algorithms have reached a strong mid- to upper-level performance compared to the industry, and we see considerable room for further improvement ahead. Regarding the growth outlook for Q1 and full year 2026, we remain optimistic about our continued growth and further market share expansion.

Next question comes from Alex Liu of Bank of America.

I will translate myself. The company's key game title San Mou has been operating steadily for 1.5 years. We saw last year that the self-developed game Escape from Duckov gained a lot of traction among gamers. Can management share some high-level strategic insights regarding the game business into 2026? What will be the operational focus for San Mou and any recent updates on the growing trend for that game? For game pipelines, can you share more about your thoughts and expectations for titles like 3 Kingdoms, Cars, and Lumi Master?

For San Mou, our goal and strategy are clear. We are focusing on the long life cycle of this game. Our intention is to keep this game at the forefront of the strategy game genre. Strategy games lend themselves well to long-term operation, so we have planned for this year to concentrate on evolving game seasons and storylines to provide users with a fresh and engaging gaming experience. Additionally, we will organize more brand and community activities during key moments to promote player involvement and discussions, enhancing the community's connection with this game. While we aim to maintain a strong Chinese fan base, we will also work on expanding this IP's influence globally. In January, we launched this game in the Hong Kong, Macau, Taiwan region, and we intend to introduce this IP to the Korean and Japanese markets, as well as other Asian markets, to further extend our reach and growth potential. Regarding Escape from Duckov, we are very pleased with its performance on PC, and we are in the process of developing a console version. We are also exploring more options for this IP on mobile platforms, as we believe it has the potential to become a significant player in China’s gaming market. NCard is aimed at being a lightweight competitive strategy game. It is designed for quick, enjoyable play sessions lasting about three minutes per round. Our strategy of reinventing games for younger players has led to this unique combination of casual poker and a distinctive card hero system that matches the tastes and preferences of this generation. Feedback from our beta testing indicates that this game has been well received by younger audiences. Due to its innovative approach, our team has committed extensive time to refining it. We have already completed two rounds of beta testing and plan to conduct another round of paid beta testing in March, with an official launch scheduled for mid-year. Our objective is to maximize daily active users through sustained operation, and we are prepared to be patient throughout this process. Lumi Master is a self-developed game that embraces a casual and cozy style with elements of simulation and pet care. It represents another step in our strategy to reinvent games for a new generation. This unique game blends pet nurturing with simulation gameplay. We received approval for it at the end of last year and are planning a paid beta test in the second quarter, aiming for a global launch later this year. Looking ahead to 2026, we will focus on two main areas: ongoing operations, which provide a solid foundation for our gaming business, and exploring new projects that have the potential to define genres. Currently, about 70% of our gaming revenue comes from long-term games like San Mou, FGO, and Azur Lane, ensuring a stable income. We also aim to be either number one or a pioneer in new genres, which will contribute incrementally to our revenue. This strategy is guiding projects such as NCard and Lumi, among others in our pipeline, and we are confident that it will lead to a successful future. Our biggest advantage at Bilibili in the gaming sector is our close relationship with young gamers in China. The company is dedicated to high-quality content, and our shared vision and patience will ultimately help us discover and develop the best games possible. That wraps up this question.

We will now take our next question from Felix Liu of UBS.

Congratulations on the strong Q4 result. My question is about AI. We've observed ongoing advancements in Video Gen AI, making video content creation increasingly easier. How does management view the opportunities and challenges arising from these developments in Video Gen AI? Looking ahead to 2026, what are your main investment priorities concerning AI?

The essence of AI creation tools is to enhance the productivity of high-quality content compared to the already oversupplied short-form vertical content. The value of generating additional short content is limited. In contrast, Bilibili focuses on long-form high-quality content, where AI is assisting a select group of talented creators to produce high-quality work more efficiently, thereby increasing the availability of rare quality content. This fundamentally benefits our platform by empowering these creators to generate more high-quality material. We are beginning to see early indicators of how AI creation tools are improving the supply of high-quality content. AI music is an excellent example; with the help of AI music tools, even those without formal training can turn their ideas into professional-quality music. The same is true for categories like auto-tune remixes. Previously, creating a good auto-tune remix video was challenging. Now, with creativity and a sense of humor, our creators can produce high-quality content much faster. We have noticed this reflected in the growth of video views and watch time due to AI content creation tools, with these metrics increasing significantly year-over-year in the fourth quarter. Looking ahead, I will outline several points that will enhance our investment in AI and demonstrate how it is supporting our community. First, we plan to use large language models to improve our understanding of content and user intent, which is crucial for platforms like Bilibili that feature long-form high-quality content. Previously, grasping the full meaning of this content and matching it with the appropriate users was difficult. Now, by utilizing AI, we can better understand meaning and user preferences, improving our ability to identify high-quality content early and promote it to a wider audience. In the user metrics from Q3 and Q4, AI comprehension is driving improvements in user engagement and growth. Secondly, as Carly mentioned, AI is helping to better match advertisements with the right users through content understanding and recognizing user needs on the platform, thus enhancing ad effectiveness. Moreover, we have already introduced several AIGC tools to boost content creators' efficiency, and we aim to significantly enhance these tools to further increase video creation productivity this year. We believe this will substantially improve the efficiency of our content supply and overall content creation process. These tools will also feature advanced translation capabilities that extend beyond basic subtitles, providing a more natural translation of the original meaning and nuanced subtitling that accurately represents the creator's voice. We genuinely believe we can translate Bilibili's content into all major global languages. This will help our content creators showcase their high-quality work on the global stage. Based on our experiences and observations, we will focus our investments on two main areas: enhancing the productivity of our content creators and improving recommendation efficiency to better understand our content and users' needs. Our investment strategies will be closely aligned with these areas, fostering long-term value for our overall ecosystem.

Next question comes from Yiwen Zhang of China Renaissance.

First, congratulations on achieving GAAP profitability for the entire year. My question is about the financials. We observed that in the fourth quarter of last year, the adjusted operating margin reached 10.1%, bringing us closer to our short-term guidance of 15% to 20%. How should we view the revenue and profitability outlook for 2026? Also, do we have any updates on the medium to long-term targets?

Thank you. I will take this question. Looking ahead to 2026, we remain confident in the continued growth of our community. At the same time, we will keep improving our monetization efficiency and more effectively translate this growth in high-quality users to commercial value. Among our business sectors, advertising is where we see the clearest growth opportunity. Our operating leverage will also continue to manifest. We expect gross profit will improve slightly quarter-over-quarter in the first quarter and our adjusted operating margin should continue to improve year-over-year in Q1. We are steadily progressing toward our mid- to long-term target of 40% to 45% gross profit margin and 15% to 20% adjusted operating margin. In 2026, as mentioned by Chen Rui, we will modestly increase our investment in AI and reinvest a portion of our incremental profit into AI applications closely aligned with our core business. This investment will help us further improve the supply of high-quality content, drive user growth, enhance monetization efficiency, and ultimately deliver strong returns over the long term. Thank you for your question.

Operator, that concludes all the Q&A session.

Thank you. And that concludes the question-and-answer session. Thank you once again for joining Bilibili's Fourth Quarter and Fiscal Year 2025 Financial Results and Business Update Conference Call today. If you have any further questions, please contact Juliet Yang, Bilibili's Executive IR Director. Contact information for IR in both China and the U.S. can be found on today's press release. Well, thank you, and have a great day.