Kunlun Tech Co (300418) Q1 2026 earnings summary

Executive summary

• Achieved revenue of ¥2.57 billion in Q1 2026, up 45.69% year-over-year, with overseas revenue of ¥2.49 billion, up 49.29% year-over-year, driven by rapid growth in AI and short drama platforms.

• Net loss attributable to shareholders was ¥887 million, compared to a loss of ¥769 million in Q1 2025, mainly due to investment losses from market volatility in March.

• Operating cash flow improved significantly to ¥89 million from a negative ¥3 million year-over-year, reflecting enhanced internal cash generation.

• Launched AGI “4+3” strategy, focusing on SOTA models for video, music, world modeling, and text/multimodal, empowering AI-native entertainment platforms.

Financial highlights

• Revenue increased 45.69% year-over-year to ¥2.57 billion, driven by AI short drama, Opera ad, and AI businesses.

• Net loss attributable to shareholders widened to ¥887 million from ¥769 million year-over-year.

• Operating cash flow turned positive at ¥89 million, a significant improvement from last year.

• Gross margin impacted by rising costs; operating costs rose 58.74% year-over-year to ¥868 million.

• Overseas business accounted for the majority of revenue, with international competitiveness strengthening.

Outlook and guidance

• AI business, especially SkyReels and Mureka, expected to maintain high growth momentum.

• Continued investment in AGI and AI-native platforms to drive future revenue streams.

• Company aims to expand global AI content ecosystem and enhance cost structure.