VK International (VKCO) Q2 2024 earnings summary

Executive summary

• Revenue for H1 2024 grew 23% YoY to RUB 70.2 bn, driven by online advertising, SME, EdTech, and VK Tech segments.

• Net loss for H1 2024 was RUB 24,617 mn, with negative working capital and material uncertainty regarding going concern.

• Daily audience reached 77 mn, with over 95% monthly reach in the Russian internet segment.

• Continued investment in product development, infrastructure, content, talent, and advanced technologies supported growth.

• 4.2 bn minutes spent daily in Q2 2024.

Financial highlights

• Online advertising revenue rose 20% YoY to RUB 42.0 bn; SME advertising revenue up 29% YoY.

• Non-advertising revenue increased 27% YoY to RUB 28.2 bn.

• Adjusted EBITDA for H1 2024 was negative RUB 0.7 bn, down from RUB 3.9 bn in H1 2023.

• Cash and cash equivalents at June 30, 2024 were RUB 31,092 mn, down from RUB 51,294 mn at year-end 2023.

• Net cash from operating activities was RUB 1,690 mn for H1 2024, up from RUB 115 mn in H1 2023.

Segment performance

• Social platforms and media content revenue rose 23% YoY to RUB 46.2 bn; VKontakte revenue up 24% YoY.

• EdTech revenue up 27% YoY to RUB 8.9 bn, with near-zero adjusted EBITDA, driven by demand and platform consolidation.

• VK Tech revenue surged 49% YoY to RUB 4.5 bn, with adjusted EBITDA of RUB 0.7 bn, led by VK Cloud (62% YoY growth) and VK WorkSpace (2.2x YoY growth).

• Ecosystem services and other business lines revenue up 14% YoY to RUB 11.2 bn; Mail.ru Email and Cloud Mail.ru revenue up 21% YoY.

• VK Clips daily views up 61% YoY; VK Video daily views up 21% YoY; VK Music subscriber base up 14% YoY.