SenseTime Group (20) H1 2024 earnings summary

Executive summary

• Revenue grew 21.4% year-over-year to RMB1,739.7 million in H1 2024, driven by a 255.7% surge in Generative AI and strong Smart Auto performance, while Traditional AI declined sharply.

• Generative AI revenue soared 255.7% year-over-year to RMB1,051.2 million, now comprising 60.4% of total revenue.

• Overseas revenue grew 40.1% year-over-year, now 18.5% of total revenue.

• Net loss narrowed by 21.2% year-over-year to RMB2,477.2 million, reflecting improved operational efficiency and cost controls.

• Gross profit increased 18.2% to RMB766.8 million, with gross margin stable at 44.1%.

Financial highlights

• Adjusted EBITDA loss improved 6.7% year-over-year to RMB1,889.6 million; adjusted net loss improved 2.8% to RMB2,326.2 million.

• Selling expenses fell 21.2% and administrative expenses dropped 7.7% year-over-year, while R&D expenses rose 6.1% to RMB1,892.2 million.

• Cash and cash equivalents stood at RMB7,626.5 million, with term deposits of RMB1,193.4 million as of June 30, 2024.

• Net cash used in operating activities increased to RMB3,523.8 million, mainly due to higher prepayments and inventory for Generative AI expansion.

• Gearing ratio at -0.6%, indicating a net cash position.

Outlook and guidance

• Generative AI and intelligent computing are expected to drive future growth, with strong demand across multiple verticals including hardware, EVs, robotics, healthcare, and finance.

• Company aims to further scale SenseCore AI infrastructure and accelerate large model R&D, supported by recent share placement proceeds.

• Market reports position SenseTime as a top-three player in China’s LLM and AIDC markets.