Kuaishou Technology Class B · HKEX:1024
Kuaishou Technology Class B — Kuaishou Technology B — Q2 2024 Earnings Presentation
32 slides from Kuaishou Technology Class B's earnings presentation, Aug 20, 2024
Slide 1: 2Q24 Management Presentation
2Q24 Management Presentation August 2024
Slide 2: Disclaimer
Disclaimer By attending the meeting that includes this presentation, or by reviewing the presentation material, you agree to be subject to the following restrictions: The information involved in this presentation has been prepared by the representatives of Kuaishou Technology (the “Company” and toge
Slide 3: Contents
CONTENTS 1 Overview 2 Business Development 3 Financial Results 4 Environment, Social & Governance (ESG) 5 Appendix 3
Slide 4: 1. Overview
1. Overview
Slide 5: World's 2nd Largest Short Video Platform & China's 3rd Largest App
1.1 World’s 2nd Largest Short Video Platform & China’s 3rd Largest App(1) Large and highly engaged user community with 395 million average DAUs and 122 mins average daily time spent per DAU in Q2 Kuaishou’s AI matrix supports content creation, understanding, recommendations, and user interactions; m
Slide 6: Setting a New Record in User Community Scale
1.2 Setting a New Record in User Community Scale • Enhanced user experience and community interaction by upgrading traffic allocation mechanism and building scenarios for user demand, significantly improving user retention, achieving high-quality growth in DAUs. • In 2Q24, average DAUs were 395 mill
Slide 7: Robust Revenue Growth, with Profitability Surging Significantly
1.3 Robust Revenue Growth, with Profitability Surging Significantly • 2Q24 revenues grew by 11.6% YoY. Specifically, online marketing services revenue grew by 22.1% YoY, other services revenue (including e-commerce) grew by 21.3% YoY. • Domestic business operating profit increased by 48.3% YoY, prim
Slide 8: 2. Business Development
2. Business Development
Slide 9: Operating Highlights
2.1 Operating Highlights Massive User Base Highly Engaged Community Interactive Platform 395 million 122.0 minutes 10 billion Average daily time spent per Average daily short video Average DAUs(1) DAU(1) interactions(1) (3) 692 million 305.3 RMB billion 35.1 billion Average MAUs(1) Total e-commerce
Slide 10: Rich Content Supply, Comprehensively AI Search Update
2.2 Rich Content Supply, Comprehensively AI Search Update • Delivered differentiated content showcasing Kuaishou‘s unique ethos, “Kuaishou Village Olympics” gained broad attention; led short play industry with over 12 blockbuster short plays(2), premiered China’s first original AIGC fantasy short pl
Slide 11: Outperforming Online Marketing Service with Improved Monetization Efficiency
2.3 Outperforming Online Marketing Service with Improved Monetization Efficiency • In 2Q24, revenue from online marketing services reached RMB17.5 billion, up 22.1% YoY, accounting for 56.5% of total revenue. • Refined smart marketing solutions, deepened sales funnel conversion paths to enhance clie
Slide 12: Smart Marketing Solution to Enhance Conversion Efficiency
2.4 Smart Marketing Solution to Enhance Conversion Efficiency • Leveraging AI and large models capabilities, smart marketing solution provided clients with end-to-end solutions to improve efficiency, covering smart creation, smart placement and smart connection, lowering clients’ customer acquisitio
Slide 13: Solid E-commerce Growth, Driving Diversified Omni-Domain Operations
2.4 Solid E-commerce Growth, Driving Diversified Omni-Domain Operations • 2Q24 GMV up by 15.0% YoY to RMB305.3 billion, will continue to foster KOL ecosystem, advance diversified omni-domain operations. • Committed to user-centric strategy, leveraging a focused approach to tapping specific industrie
Slide 14: Continued Prosperity on the Supply and Demand Side of E-commerce
2.4 Continued Prosperity on the Supply and Demand Side of E-commerce Supply side Demand side 50%+ 131m YoY increase of monthly active merchants in 2Q24 Number of monthly active customers in 2Q24 New merchants’ cold-starts and growth: Increased omni-domain user base: • Through Set Sail Initiative, wh
Slide 15: Live Streaming Maintained Healthy Momentum
2.5 Live Streaming Maintained Healthy Momentum • Live streaming revenue reached RMB9.3 billion in 2Q24; continued to iterate refined operating approach to bolster a healthy and positive live-streaming ecosystem. • Established regional teams to attract high-quality new talent agencies and support lea
Slide 16: Deepened Overseas Penetration, Major Boost in Profitability
2.6 Deepened Overseas Penetration, Major Boost in Profitability • Refined operations in traditional marketing channels, explored new growth avenues, 2Q24 average DAUs in key overseas markets grew steadily, with DAUs in Brazil rising by 15.4% YoY； • Further enhanced localized content operations, nota
Slide 17: Local Services: Maximized Value-for-Money, Rapid Growth in Supply and Demand
2.7 Local Services: Maximized Value-for-Money, Rapid Growth in Supply and Demand • Differentiated customer base empowered merchants to operate with lower costs and higher conversion rates. Leveraging top-quality KOL resources and efficient traffic allocation, crafted high-quality content, further en
Slide 18: Fully Upgraded AI Matrix to Empower More Business Scenarios
2.8 Fully Upgraded AI Matrix to Empower More Business Scenarios • Milestone breakthroughs in AIGC: self-developed large video generation model, “Kling AI” launched full beta testing globally, text-to-image model “Kolors,” open-sourced. • Focused on empowering businesses with large models: in 1H24, n
Slide 19: 3. Financial Results
3. Financial Results
Slide 20: Financial Highlights
3.1 Financial Highlights 2Q24 GPM improved significantly YoY to 55.3%, adjusted Operating net cash inflow ~ RMB7.61 billion with total NPM continued to increase and reached a historical available funds increasing QoQ for 8 consecutive high of 15.1% quarters Domestic business operating profit reached
Slide 21: Steady Revenue Growth, Continuous GPM Improvement
3.2 Steady Revenue Growth, Continuous GPM Improvement • 2Q24 revenues grew by 11.6% YoY, including 56.5% from online marketing services, 30.0% from live streaming and 13.5% from other services (including e-commerce); • In 2Q24, online marketing services revenue grew by 22.1% YoY, other services reve
Slide 22: Driving Growth through Quality and Productivity Enhancements
3.3 Driving Growth through Quality and Productivity Enhancements, Consistent Improvement in Operating Efficiency • S&M as a percentage of revenue increased by 1.3 ppts YoY to 32.4%, primarily attributable to the increased promotional spending on e-commerce and other businesses; • R&D expenses as a p
Slide 23: Improved Profitability for Domestic Business, Significantly Narrowed Overseas Loss
3.4 Improved Profitability for Domestic Business, Significantly Narrowed Overseas Loss YoY • 2Q24 Domestic business operating profit was RMB4.50 billion, profitability further improved YoY. • 2Q24 Overseas revenue monetization efficiency continued to improve. Operating loss narrowed by 64.5% YoY. RM
Slide 24: Continuous QoQ Growth in Group-Level Adjusted Net Profit
3.5 Continuous QoQ Growth in Group-Level Adjusted Net Profit, Hitting Record High • The group’s operating profit reached RMB3.91 billion at a margin of 12.6%, up by 7.9 ppts YoY. • The group’s adjusted net profit increased QoQ to RMB4.68 billion, with adjusted net profit margin hitting a record high
Slide 25: 4. Environment, Social & Governance (ESG)
2.7 AI LLM to Empower More Business Scenarios • For Self-developed LLMs, following the KwaiYii 13 billion and 66 billion models, we focused on developing and training the 175 billion model in Q4, which significantly surpassed GPT-3.5 in overall performance. The overall performance of AI text-to-imag
Slide 26: ESG Recognitions
4.1 ESG Recognitions Receives MSCI ESG rating of “BBB” in Other accreditations, awards and recognitions recognition of commitment to sustainability 2023 Data Center Technology Achievement 2023 IDC Industry Award - First Prize Annual Green ——Water and Power Control Solutions Awards Energy Efficient A
Slide 27: ESG Highlights (2023)
4.2 ESG Highlights (2023) ENVIRONMENT SOCIAL GOVERNANCE Protecting our planet and Support for the communities Operate with integrity and being a responsible where our team members live embrace fairness and diversity as environmental stewardship and work our drivers for sustainable growth • Kuaishou’
Slide 28: 5. Appendix
5. Appendix
Slide 29: Income Statement
Income Statement RMB million 2024Q2 % of revenue 2024Q1 % of revenue 2023Q2 % of revenue YoY change QoQ change Revenues 30,975 100.0% 29,408 100.0% 27,744 100.0% 11.6% 5.3% Cost of revenues (13,840) (44.7%) (13,288) (45.2%) (13,810) (49.8%) 0.2% 4.2% Gross profit 17,135 55.3% 16,120 54.8% 13,934 50.
Slide 30: Adjusted Net Profit and Adjusted EBITDA
Adjusted Net Profit and Adjusted EBITDA RMB million 2024Q2 2024Q1 2023Q2 Profit for the period 3,980 4,120 1,481 Add: SBC 723 292 1,056 Net fair value changes on investments (24) (24) 157 Adjusted net profit 4,679 4,388 2,694 Adjusted net profit margin 15.1% 14.9% 9.7% Adjusted net profit 4,679 4,38
Slide 31: Balance Sheet
Balance Sheet June 30, December 31, June 30, December 31, RMB million RMB million 2024 2023 2024 2023 ASSETS EQUITY AND LIABILITIES Non-current assets Share capital 0 0 Property and equipment 11,871 12,356 Share premium 271,804 273,459 Right-of-use assets 8,908 10,399 Treasury shares (284) (88) Inta
Slide 32: Thank you!
IR Contacts Thank you! Kuaishou Technology Investor Relations Email: ir@kuaishou.com
Kuaishou Technology B — Q2 2024 Earnings Presentation on 6ix