Earnings call transcript Q2 2023

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Operator

Hello, ladies and gentlemen. Thank you for standing by for 36Kr Holdings Inc.'s Second Quarter 2023 Earnings Conference Call. At this time, all participants are in listen-only mode. After management's remarks, there will be a question-and-answer session. Today's conference is being recorded.

the of to the turn [ph], host, now Manager IR Company. will call your over Jianen I Please go ahead, Jianen [ph].

Unidentified Company Representative

company's earnings Thank and you and call. have XXXX available earlier welcome everyone, operational The conference to XXKr been were very Holdings second today much. released financial and Hello, online. results made quarter

start and view will press our Feng; release opening also the provide ir.XXkr.com. quarter then the Participants highlights call questions. the Chief include at interpretation. call in Mr. by website Co-Chairman our and on visiting CEO, the the will before can Ms. providing Mr. Wei details You an for call your Officer, on English by the earnings overview of the today's Ms. company of our and the of Chinese, Lin Company's IR by will Feng Financial Section followed results Dagang performance financial Wei.

discussion the U.S. forward-looking Litigation please we contain XXXX. statements that the of will Provisions under today's made Private Act Harbor of Before note Reform continue, Securities Safe

risks involve statements and Forward-looking uncertainties. inherent

all the note are of Please earnings unaudited to release, please this such, and measures, well filed SEC. be Company included from statements, in the today. press does the prospectus reconsolidation assume press XXKr's required views unaudited law. expressed financial to that uncertainties financial filings numbers public that unaudited unaudited this And measures. materially GAAP information U.S. risks in Company's non-GAAP content may RMB. regarding discussions As applicable measures, call the Further is and as earnings under note obligation XXKr's any update Company's different with release non-GAAP include GAAP other results amount the as except other as the and and forward-looking not The conference measures of any as

Paul, now go Dagang the co-Chairman CEO, to call ahead. our over I Feng. and please will turn Mr.

Dagang Feng

Language] [Foreign

call. earnings Thank everyone. our second XXXX quarter joining Hello, you. for conference Thank you

[Foreign Language]

business primary steady continue second segments XXXX. that in the glad of are our quarter growth with to We note to develop

enterprise Our total subscription up revenue our increased XX% year-over-year, by X% services our XX%. revenue gross year-over-year. margin our to year-over-year and up XX% Notably, revenue value-added services from strongly rewarded with from

We also businesses. made [ph] and BXB in BXC strides great both

to high-quality in we scenarios business and segments, across growth. deeper and As embarked new of our content empowerment multidimensional enhance AI development diversified metrics diverse we continue on the applications stage our

Language] [Foreign

contactor First areas for high-quality content. our ecosystem new off, including multiple great made on destination engagement influence. industry number accumulation, content greater tailor industry growth quarter the and capping Page multichannel the our during network. services advancements showcasing content we XXX asset had coverage, second We and fronts, customer the XXX,XXX Furthermore, articles of X and quarter; our insights with broadening in fully articles

user Our and user long-term consistent creation high-quality enabled our enhance expand us base meaningfully of to content loyalty.

we second As quarters the quarter, consecutive end X of up achieving the XX than had of more million year-over-year, for, of XX% growth.

[Foreign Language]

in the impressive and we vertical sector. media in wages for our booming equally new and continuous including deeper economic gain important the The leadership into insights emergency mutagens allowing outcomes, achieved users of sectors the to content launched,

energy broad We also paper white the program quarter report business in content of on we further content survey offerings the our column; view, live. review and product certified pulling advantage attracted during our type through a by Super a more content optimizing audience

fun. well term intelligence fund also listeners live the more as been or bring affords We entitled also offerings to format actively business working our medium day. long up We've managed and topics as on enjoy a ideas orcas enrich that to more to audit each through the

[Foreign Language]

and to branding, through business new economic highlight also content monetization. to want an I our approach content video short integrated

our into new advertising a it radio growth and transforming of region optimization for shop accelerated metrics, marketing. have We content

including topics and our users opine, training on on kept and created were Inomec's that must videos earth, perspectives thanks engaged. million [ph] short ideas their times, the Wibi fresh to sent encore diverse X of Some was plan over

second As than of [indiscernible]. the the million of up XX% had among X year-over-year, quarter, end were we over was which more [indiscernible]

among opportunities become accounts platform-based ready stand leader and have of We official to commercialization seize for all we indeed a cooperation. more

[Foreign Language]

successfully also the audience additional attracted first season second first of for show companies. We our commercialization up bringing saving a season leading to return and us with long which will opportunities wrapped inverse video for attention,

[Foreign Language]

developed and lineup content strengthening cooperation platforms, including the content with for planning strategic development cycle entered the a stations we television and process more users a long more more full landscape with marketing effective, communication Beijing wide of this videos all way our Recently, life into synergetic on project promote empower production commercialization. variety video engaging format, and and Xiaohongshu, our diversify account, of innovative and distribution, also Part BBBs, to Segue IP from content initiative promotion we video stand radio with users. same groups to WeChat diverse As with -- [ph] we of our short and made

[Foreign Language]

humans We more store, exceeding digital big customer daily hosted Through generation our AGC for views we intelligent XXX,XXX session into our operations, streaming beta corporate first included service including matching, day-to-day by production of product actively the translation, during GMV imaging in [ph], cart with AI functions business and live have was our quarter. keyword cases among e-commerce technology writing also innovation, explore it been other image us with coating our in integrating stores. Tabolt impressive pioneering -- Super RMBXX,XXX, and AI sales

on including the and AI covered China AI all, TV marketing content success app, highly we story testament was XXX CC our well our was as recognized to by a channels, applications. first of or the the as shopping marketing in on toleration. again Central featured were XX.com China broadcast program leadership During The multiple innovation

[Foreign Language]

entered into strategic a a On note, with we cooperation related recently Baidu.

on content powered applications. application by are show language diversified application from atop and and our and media closely functions, a leasing and data RLM on landscape, and Group, services model, driving applications working commoditization including a large innovation enhancing platform, Mutual marketplace training, programs So our LLM as solutions AI-powered Power teams training production AI

Language] [Foreign

AI advance empower steady content our profiled technology, a persistently foundation with ecosystem business In summary, for solid our and we improvement. growth, laying as performance continuous we

review Next, commercialization elect progress second in earlier quarter. the our to

Language] [Foreign

In by RMBXX.XX revenue RMBXXX,XXX, our X% our year-over-year the total advertising year, second quarter XX% to Notably, increased on year-over-year. reached the with to of increased basically par our million. period up XXXX, million, last revenue advertising pool RMBXX same

Language] [Foreign

creative the every XXKr services content with offerings provides and of and to brand. features customers each tailored differentiated

of promotions depend giants cooperation accounts on one-stop the and customer new Alibaba added such quarter the and customers, with growth centered Our diverse Huawei second reach. in actively address our lending as we and broaden global our marketing industry provide solution marketing effective need utmost targeting precise to efficacy [ph] to

our an first videos our as reviews multidimensional X their approach in and across flash post-hold [ph] graphics, designed us them of form channels targeted target luxury taxes, brand Furthermore, signed promoted applicants online also innovative, promotional effectively and test an compete. and engaging holders new time. we helped nodes created winning reach We media well event, as the Joan for content diverse Juan rise metrics, the through our from

[Foreign Language]

XXXX of offer to of all, commercial shop stellar coverage we commitment. as video tell invited and Meanwhile, short the showcasing quarter Next, story partner, kinds were Tencent's to creativity. will with of business extensive in International, low another quarter its the on-site from at results bone business, of our delivered second TV first we strong ESG Cana which carbon advertising lines

have economy. quarter, the then launched traffic our auto attracts promotion second interest our the attract With earlier video lending leverage driving WeChat for our Regarding in our industry massive a primary metrics during circular video we to we greater business, increases cycle advertising a We short account virtuous BMW stickiness, of year, established auto evolution even video where featuring contact their users traffic. increase overall this the [indiscernible] from the an more content short partners. delivered and in the

Language] [Foreign

With venture during create part skew [ph] respect the hosted XXKr's influence. further expansion integrating social hosted to efforts Andrea’s global we in culture teams [ph] to generation, a services, and team. greatly our to enhancing second vibrancy. music younger technology, we of opportunity regains events Conference line as continued as and away Globalization autonomy consumption year-over-year the the XX% our quarter development, RMBXX.X revenues were In capital, for up the value-added Value the WiseXXXX We and our relaxed sustainable increased networking number of and open of and meantime, scenarios brand million for

reach attracting a addition In high-quality of business, in young our PC lifestyle. wide to continue our contently us business, range customers to we our with TV election more

fully reflecting also across our in and in for First meeting ability business expanding large innovation KPS sharing Chengdu or session, all, and was customers. life, malls various city the our we developing during San quarter, of enterprise Beijing, regional featuring established items have escalate shopping among our forest

[Foreign Language]

the always transformation as commercialization we -- dedicated a long-form to reference hands into industrial Cloud data and report, as short and and on and a innovation. In generation the office. industry support We industry with long [ph] post releasing for business providing Institute than, consulting massive trends insights. research guidance absorb informed XXKr analysis has leveraging insight been our innovation on technologies, development, opinions Next, provide business cutting-edge tax providing the trial strong for in consumption audio our Nest the audio quarter, valuable second joined Music in-depth well form as in content the XX,XXX Research

[Foreign Language]

and revenue order. venture of continue we of through quarter. in over the by services, ones online the University through second subscription to pool Oscar Meanwhile, in combination providing research and bus our training made class strides and long-based to driving business in our our a XX% drawing college learning top-tier place for training high our brought of RMBXX.X million we further cooperated enrich funding substantially growth This offered experiences for high-quality doctor KR capital program. courses users the to from wide increasing BXXXX of program to programs, array a off-line a solutions, grew As with the initiatives, in great cable to the increase

Language] [Foreign

users platform. Last and rankings and like rolled product review customer Through support the but flat environment, we share decision-making more I'd provided the user of interactive intelligent efficient product not enterprise more while service. based with precise our multidimensional on we across and information refining overall on core AI information, update an data lenses continuously to and platform, applications suite least, enable out

by increased the on XX% up of platform year-over-year reviews points products number year-over-year. the XX% of by quarter, on cumulative platform of year-over-year. the end XX the of of was number the number As as increased cumulative The the merchants second

pre customer its securing CM. cooperation SaaS Pinjin, Wondershare plan services, with lasting PR and review manufacturers IHR including XX won and the platform fields, high-quality Commercially, in various products long-term has service trust with

play platform making acquisitions role an even support their and better service to customers' ahead, review transformation, application either continue Looking attain will enterprise customer customers, will for and digital enterprise to integration needs marketing address active more our AI more the operations. sophisticated we in to both intelligent

Language] [Foreign

again both To second million, results RMBXX.X of for revenue growth sum and quarter-over-quarter. quarter, the delivered year-over-year we financial with up, total maintaining once momentum solid

Our on progressively scenarios The the our tremendous Norton the boom revised build above margin as our we of stated rebounded segments. content our integrate empower continue the content global across consistent growth business we our giants million generative thorough straight. believe advantage cooperation influence competitive the opportunities gross commitment sites and and to long-term, in of a technology our has enhance into also wide XX% level. will all and We on leveled the LM Moreover, innovation further high-quality to to $X with and sector. AI foresight number profiling industry, follow on-quarter us AI

will call to discuss over that, our who financial our CFO, With will Mr. now Wei, results. the turn I key

Lin Wei

Thank you, Paul.

of Now, note, details more all numbers walk through second otherwise like are to Please our XXXX I'd results. stated. quarter in financial RMB, amount unless you

revenues quarter were the quarter up XXXX was increased recovery. by second as level revenues by advertising continuously second is Total same macro to period of $XX.X same X% in $XX of in develop XXXX XX% Online services revenues of the lagging of economy, million period second million to value-added increased last early decrease $XX.X in of in in the enterprise the million the in stage million services million which we year. from $XX.X Enterprise The slight various for our quarter still to of proactive attributable effect primarily year-over-year customers. year. last $XX.X the the XXXX, to compared services of

Our notable off-line and the several growth the conferences as continues, reopening events hosted summits. successful we during quarter and achieved business

to of the the revenues increase products Subscription in quarter high-quality second XX% services compared revenue Cost to subscription subscribers. by in same million increased in second The to XXXX same second same the and higher primarily last period million year. million offer XXXX profit the the increase attributable Gross of of $XX.X compared costs to $XX.X $XX.X in was and Gross was previous was XXXX in to content in year. in to of our to profit to quarter period the in the million was the same last last of last to quarter attributable year. fulfillment XX% million our second in of of year. XX% XXXX compared margin the of period $XX.X quarter XX% CNYXX.X quarter costs. primarily efforts continuous was compared of $X.X period The million

to and was offline QX XX% increasing and attributable call, and strongly in costs. in by primarily XXXX, which the business level. to were of the second million a expenses On rebounded margin attributable earnings period last was was of the $XX.X the slight our compared period courses, year. expenses XX% $XX.X slightly quarter payroll-related basis, GP higher $XX.X of on the to Operating last forecasted primarily of in Sales same above as our year. quarter second resumption increase million travel-related were of early we and the expenses same to million in This $XX.X X% occur tuning expected the the year-over-year in expenses. events decrease XXXX, an from marketing of As off-line million increase back

the fees payroll-related the expenses, professional in for million decrease a share-based increasing and million slightly development were increase the quarter and in expenses, the same expenses, were credit $XX.X period and year. well related from and of as year. cost in marketing expenses expenses. XXXX primarily sales to server expenses share-based $X.X G&A $XX.X expenses second of development expenses to partially decrease quarter quarter in expenses, second the G&A bandwidth This decrease period was allowance revenues, expenses million same and to the the losses. in totaled by of of period in decrease as primarily attributable in million last well year. in in second compared of last was XXXX, in $X.X Share-based peso million compensation research of expenses $XX.X of to compensation as Research the recognized attributable XXXX, The last compensation as $XX.X same million the offset compared XX%

same in of in million was the the from the quarter loss arising in fair second quarter of of because income decrease was recognized period Net XXXX $XX.X the to quarter the $XX.X of the last last of income net in the value was change attributable period XXXX XXKr year. million income compared loss net in compared compared million of The attributable quarter in second million in period ordinary investment of Non-GAAP year. in non-GAAP $X net year. second the year. million the year. to Other XXXX approximately loss same company $XX.X of of shareholders $X last of last primarily our second million adjusted was second the XXXX in $X.X million same long-term $XX.X to shareholders to of to on income Net adjusted million $XX.X million of income $XX.X same period investments of to XXKr was of quarter last compared net

basic to per same the XXXX the for ADS Basic last net loss of of both, quarter $X.XXX in and compared in of second of ADS income net year. and $X.XXX diluted diluted period

mainly as cash activities, June and payments XXXX, XX, the cash related Beijing. XXXX. lower compared $XXX.X cash investments approximately from The restricted $XXX.X short-term $XX its which headquarters decrease office of to March company's outflow the include to move of to operating to company net cash, of million a building As XX, equivalents, was rental attributable of had million million cash in

concludes all remarks prepared of our today. This

questions. will Operator, We go to now open call the ahead. please

Operator

first CICC. Our today Jing of Instructions] Chen from [Operator come question will

Jing Chen

[Foreign Language]

I have questions. X

upgrades And the to for is, what first recovered second return advertising afterwards? off-line third The the the to in question normal, outlook off-line activities the market what quarter? And plans recovery as company's the is is and activities... business the of company's trend is the how

Lin Wei

of mostly is have And still the macro the advertising for to the economy the companies, medium-sized We companies, have clients names has Jen. at they the Lynn. the need the pool you, will usually, including other have on which recovers, big advertising a market as expected and Thank to we names. This gradually the ligand of our growth we effect orally of giant a stage hand, demand answer first in advertising, advertising. as increase. compared well era Internet as early spending big new economy on more and advertisement of think a And your question as are look But names, KR, XX I recovery. both XXX small- the as client brands. also you of lot is these the the big to Fortune cautious if

If at customers QX you grew a number to advertising to our advertising ago, decreased but a our actually, of compared our ago. results, ARPU strongly compared year year look

the so net-net, a on that's QX the revenue year advertising par from ago; is results. So basically

we think meaning And growth the X you optimistic an will because the we if view, advertising guidance of we your at year. we back you. or economy, the you already answers we trend, next but macro the look the still Thank question. -- have the the our asking our XXXX. for will optimistic that go achieve cautiously to rest year-over-year hopefully, And And still for for we upward the observed outlook quarters and think for we might rest think QX of recovery have optimistic the of year, view, are a although if

Jing Chen

Language] [Foreign

Dagang Feng

Thank you, Jen.

over hosted centralization momentum year, as a wings number with skill also of with courses enrich in class as Let the we content we all-new camp. and offline launched the events greatly with driving as in pool influence well were in will and all capital variety our We degree-based enhance a of our achievements, to gaining of the business the were events. over on through increase see sell offline XXKr funding meantime, to initiatives partnership of We Meanwhile, question. pleased launch me acceleration and venture Festival [indiscernible], the cement fronts. of This the filling programs and we In answer ARPU both continue an our designed offered events to program vast University Lab events. company the format RMBXX,XXX. like creative new through your our second City a new

Operator

next today of our question Securities. And from will Industrial Hang [ph] come Jon

Unidentified Analyst

[Foreign Language]

The management mentioned business about AI. the brought just opportunity by

So, give us enterprise. your about you AI plan relevant I more offering AI want -- product cooperation color internal use and more the could about with

Dagang Feng

Language] [Foreign

Thank you, Jan.

questions answer me from your Let X perspectives.

First of in generative we're understanding our consistent our forced besides nuance AI proud all, emergency the technology of submits, and terms intelligence. launching of vertical of

XXXX AIG that Wide stimulating of We with development AI, Commit also a steady in insights we in-depth by second inspired show ideas. reports stream the have continuously public the hosted our offering and latest and the of quarter interpretation

fated point on by stream on we facilitate into AI generative with digital and CDK Taba, by our line translation, to manual store was investment effectively to sessions e-commerce corporating day-to-day keyword saving customer were initiatives. other generation CCT functions our service humans, pioneering out and create cost using reducing like a including operations, sales that reduction follow-up launching technologies AI Second, and efficiency ever integrating live among multiple been resources, efforts the and exclusively first have industry actively time we intelligent image pioneer hosted would matching, in AI I

driving as the in so we with AI our training manual strategic entered commercialization and Baidu innovation enterprise platforms, applications media power addition, and services we cooperation recently into goals. across In offerings, a enhance broadening

closely LFX, diversified model, AI holding production powered Our teams working you. Thank a and LLM and training large by content [ph] a application AI-powered solutions applications are on on marketplace showcasing an landscape, for applications. language

Operator

today Research. from Zhao Our next come SWS question Lingyi of will

Lingyi Zhao

Language] [Foreign

really The how ship if don't this find on think to both you you on well. has we business short Now into video been doing further a -- face plan will tap take -- you're And to what's in England. growth how on going the you our what's potential... Tinier year don't

Dagang Feng

[Foreign Language]

Thank you, line.

TC insight topics, we will and present, open. further shop At with all, our expand business users technological covers innovation, of diverse launch and lifestyle, of First content continue video including content offerings a our delighting products. to lineup variety diversified

multichannel us. a In remains for content addition, focus key distribution

on including and posting media Sega to Doi platforms, addition video Bilibili, WeChat In Kuaishou, video short account.

We expanded platforms. our also reach social across media actively

our up of are We X plus forwards pleased among than million year-over-year, bit number XX% $X.X more were to which short users. see the video million,

additional from a cooperation question. our our marketing, we more of advertising year-over-year, of next than Regarding for XX% this industries. Revenue for wide revenue. signed from total creative customers segment commercial doubled array accounting

Operator

Our Securities. from Sealand next question Yin today Rui will come of

Rui Yin

[Foreign Language]

gross this profit How margin did achieve the company quarter? results in

Lin Wei

gross will Thank you, your margin. regarding is take Rui. This Lin. I questions profit

think as rebound to of scale. mainly our attributable of is I business economy the well nature seasonality our the as

revenue We revenues have our between That cost is our that mentioned several when growth. times cost on our such means fixed. previous our largely a relationship and linear is not grow, structure growth calls there

So if was very look sequential revenue X%. almost look a at revenues, But our our QX by costs jump. of obvious XX%. growth actually, economy a if That's only you cost, scale. our big grew That's very our at you

economy scale also, we strong we content of of rebound -- our basically sequential that's off several started the and new in the to the contributed margin. seasonality initiatives. And QX, So GP

year. For in launched the long-form forecasting long-form called to beginning view sinXX.That's example, program the for our of we first produce view started

haven't we the So basically QX, in off commercialization. started

But the both has well the advertising -- received audiences in been also our program customer. QX, this very by and

cost the we revenue production to of of this -- cost more So than cover this and program in QX, the have actually cover program. cost achieved

we higher XX% GP because our level high we even at we think of able cleaning to Rui? as maintain and XX% will or add GT and to business to grow growth. profit services gross to margin, that has is be revenue XX% high-margin and our contributing a will said, well advertising and your reason this And looking revenue our continue to will another revenue we our will a management GP ahead, higher enterprise between that's Hope contribute why grow as that's So as value answers margin. question, relatively contributed to our believe also a advertising business.

Rui Yin

Yes. you. Thank

Operator

are there back the turn questions, now company remarks. no closing over the like to As to further call for I'd

Dagang Feng

Thank today. you once again for joining us

questions, contact free Relations contact Thank to information through on Investor website the Relations. PST feel XXKr's further have Investor provided or our you. the you If Group

Operator

the concludes call. This conference

You may disconnect Thank now line. your you.

36Kr (KRKR) 31 Aug 232023 Q2 Earnings call transcript