Kuaishou Technology (1024) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue rose 11.6% year-over-year to RMB31.0 billion, driven by strong growth in online marketing and e-commerce, both exceeding 20% year-over-year growth.

• Adjusted net profit for Q2 2024 reached a record RMB4.7 billion, with a margin of 15.1%, and gross margin set a quarterly record at 55.3%.

• User engagement remained robust, with DAUs at 395 million (+5.1% YoY) and MAUs at 692 million (+2.7% YoY), and average daily time spent per DAU at 122 minutes.

• AI advancements, including Kling AI and Kolors, were integrated across business lines, enhancing content creation, recommendation, and commercial applications.

• For H1 2024, revenue grew 14.0% year-over-year to RMB60.4 billion, with net profit reaching RMB8.1 billion.

Financial highlights

• Online marketing services revenue rose 22.1% year-over-year to RMB17.5 billion, accounting for 56.5% of total revenue.

• E-commerce GMV increased 15% year-over-year to RMB305.3 billion; monthly active paying users grew 14.1% to 131 million.

• Live streaming revenue was RMB9.3 billion, down 6.7% year-over-year.

• Overseas revenue surged 141.4% year-over-year to RMB1.1 billion, with operating loss narrowing by 64.5% to RMB277 million.

• Gross profit grew 23% year-over-year to RMB17.1 billion; gross margin was 55.3%, up 5.1 percentage points year-over-year.

Outlook and guidance

• Management expects continued high-quality growth in H2 2024, leveraging AI innovation to sustain market leadership and deliver long-term value.

• Confident in achieving a mid-term adjusted net margin target of 20%, driven by improved revenue mix and operational efficiency.

• AI investments expected to have minimal short-term impact on profitability, but significant long-term value creation.

• Continued focus on leveraging AI to drive business innovation and sustainable growth.

• Plans to foster the KOL ecosystem and advance omni-domain e-commerce operations.