KRKR 36氪

Operator

Hello, ladies and gentlemen. Thank you for standing by for 36Kr Holdings Inc.'s 2025 First Half Earnings Conference Call. [Operator Instructions] Today's conference call is being recorded. I will now turn the call over to your host, Xin Wang, IR Manager of the company. Please go ahead, Xin.

Xin Wang

Thank you very much. Hello, everyone, and welcome to 36Kr Holdings First Half 2025 Earnings Conference Call. The company's financial and operational results were released earlier today and they have been made available online. You can also view the earnings press release by visiting the IR section of our website at ir.36kr.com. Participants on today's call will include our Chairman and CEO, Mr. Dagang Feng; and our Chief Financial Officer, Mr. Xiang Li. Mr. Feng will start the call by providing an overview of the company and the performance highlights of the first half in Chinese, followed by an English interpretation. Mr. Li will then provide details on the company's financial results before opening the call for your questions. Before we continue, please note that today's discussion will contain forward-looking statements made under the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's results may be materially different from the views expressed today. Further information regarding this and other risks and uncertainties is included in the company's perspective in other public filings as filed with the U.S. SEC. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law. Please note that 36Kr's earnings press release and this conference call include discussions of unaudited GAAP financial measures as well as unaudited GAAP financial measures. 36Kr's earnings press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited GAAP measures. And please note that all amount numbers are in RMB. I will now turn the call over to our Chairman and CEO, Mr. Dagang Feng. Please go ahead.

Dagang Feng

[Foreign Language] [Interpreted] Thank you. Hello, everyone. Thank you for joining our first half 2025 earnings conference call. [Foreign Language] [Interpreted] Over the past 2 years, we have consistently upgraded our organizational structure, optimize expenses and improved operating efficiency. In the first half of 2025, our gross profit increased by 10% year-over-year. Operating expenses decreased by more than CNY 60 million from the same period last year, down 52% year-over-year. We narrowed our net loss by more than CNY 90 million, an impressive 95% improvement year-over-year, while our cash results remained stable following the company's solid business operations. [Foreign Language] [Interpreted] These operational achievements were largely driven by our ongoing efforts in content innovation, commercialization breakthroughs in technological applications which together optimize our organizational structure and improve the workforce efficiency. Let me walk you through our business progress in those three areas. [Foreign Language] [Interpreted] First, content. We consistently fortified on our content ecosystem in 2025, leveraging our peerless content creation promise to steadily expand our influence. In terms of a content dissemination network, we expanded our footprint across diverse channels, crossing a comprehensive circulation metrics encompassing major new media platforms like Weibo, Xiaohongshu, Toutiao, Zhihu, Bilibili, Douyin, and Kuaishou among others. Broad channel exposure brings us wider overall dissemination and higher visibility for our premium content. Our consistent production of high-quality content also broadened in the diversified user demographics, further elevating user engagement and the stickiness. As of the first half of 2025, we had over 36.57 million followers marking 17 consecutive quarters of growth. [Foreign Language] [Interpreted] We explored a growing area of content format throughout the first half of 2025 including text with graphics, short- and long-form video, audio and a live streaming, enriching our content offering with a greater diversity of styles. For text and graphics, we continue to create a high-quality content on multiple fronts while maintaining our existing content metrics. Leading our flagship channels, including 36Kr and the 36Kr Pro, we continuously broaden our reach in some verticals actively expanding high-quality content specific accounts like the emergence of intelligence, 36Kr auto, future consumption, 36Kr games, waves and 36Kr finance among others. This accounts enriched our metrics with both broad content coverage and deep expertise in specialized domains, providing users with invaluable insights into industry trends and the evolving business dynamics. At the same time, we continued to tailor content experiences for younger generations with our Youth and TIDE subvertical media channels. Greatly extending our content reach by successfully engaging younger audiences. At the start of 2025, we rolled out 36Kr industry future and all new content channel, spotlighting, urban innovation and the state-of-the-art technologies building our influence in the emerging industries. Within 6 months, we released over 60 -- more than 60 articles, including a notable feature on the innovative pharmaceutical sector in [indiscernible], which garnered over 70,000 page views on our official WeChat accounts and more than 100,000 total exposures. To date, our accounts cover artificial intelligence, global expansion, advanced manufacturing, digitalization, dual carbon and ESG, hard core technology, consumer life science and much more comprising a thriving content ecosystem. In the first half of 2025 under 36Kr of Visual Accounts alone, the 339 of our articles achieved over 100,000 page views. Meanwhile, WAVES followers expanded by 44% year-over-year. [Foreign Language] [Interpreted] In terms of a short video, our exceptional content creation capabilities earned us widespread visibility in the rate. Our video followers exceeded 9.52 million at the end of the first half of 2025. Our retail channels of followers surged by 69% year-over-year. Following the debut of 36Kr tech on Douyin in 2025, we released the blockbuster videos such as AI Confident and AI Creator. In addition, our video undercover multiple host live garnered over 10 million views on Xiaohongshu, Douyin, WeChat channels, [indiscernible]. [Foreign Language] [Interpreted] For live streaming, this year, we optimized our resources with a streamlined team in fully leveraged WeChat channels to cultivate an area of content-specific accounts, including the big deal global expansion, Golden Shovel and 36Kr CEO tips. We also unveiled AI Insider and episode targeting AI entrepreneurs and independent developers. During this year's World Artificial Intelligence Conference in July, 36Kr served as a special supporting media partner, offering full spectrum content coverage and multidimensional reporting. Our super live streaming channel jointly initiated by WAIC Organizing Committee and 36Kr provided professional cutting-edge of high-quality live streaming content that brought together leading ones in AI, focusing on scenario and application-driven insights. The live streaming -- the live stream combines for all conference reporting, expert panels, cutting-edge technology insights, future trend forecast and tech product groups, garnering 50.2 million total views while engaging 1.17 million viewers across the 36Kr live stream metrics. Moreover, at the Appliance and Electronics World Expo 2025 organized by the China Household Electrical Appliances Association, 36Kr launched its first robust themed exhibition, Future Plus in partnership with 5 robotics companies, showcasing the immense potential upside of embedded artificial intelligence in home appliances and home settings. With this exhibition, the 36Kr retail channels live stream grew 175,000 live views and 151,000 likes in a single session, while our Omni Channel live streaming garnered over 1.04 million views in total, racking up over 80 million views across diverse platforms. [Foreign Language] [Interpreted] In terms of the event IP, we successfully hosted WAVES in the first half of 2025, co-hosted by HI Camp and Hangzhou Liangzhu New Town Management Committee. This year's WAVES centered on the new era for venture capital. At both investor and entrepreneur sessions, founders of emerging companies, innovative young scientists and creators gathered with top-tier investors to discuss leading-edge topics, including AI breakthroughs, globalizations and value reassessment, sharing insights into their business aspirations and the perspectives on the future. This year's WAVES event amassed over 150 million views. In addition, on April 18, 2025, 36Kr hosted the 2025 AI Partner Summit at Modu Space Shanghai. Under the theme, here comes the Super App, the event highlighted the disruptive impact of AI super applications across diverse industries, delving into how AI innovations are redefining business logic and reshaping industry landscapes and exploring AI super apps limitless possibilities. We invited executives from AMD, Baidu, Qihoo, Qualcomm, Goofish, Dahua Technology, TAL Education, Chu Wang group, and The Best Brand to explore trending topics such as industry AI adoption, AI computing power, AI search, AI-powered imaging and breakthroughs in AI education. Our 2024 AI Partner Summit garnered over 130 million views. [Foreign Language] [Interpreted] Next, commercialization. In the first half of 2025, our deep expertise in innovation in content and IP sparked continuous commercialization breakthroughs, including client structure optimization, stronger commercialization of subvertical media channels for younger audiences, new momentum in live streaming and video revenue and meaningful progress in industrial service commercialization. [Foreign Language] [Interpreted] In terms of client structure optimization, our enriched content ecosystem and diverse content distribution channels empowered us to consistently expand our portfolio of services and products, consistently enhancing our commercialization capabilities. Within our -- within our Internet client portfolio, the AI and the large language model segments continue to gain momentum, driving an increasing share of revenue. Revenue directly generated by our Internet clients increased by 52% year-over-year. Revenue from the FMCG segment grew by 27% year-over-year as multiple brand clients acquired last year repurchased our offerings in the first half of 2025. [Foreign Language] [Interpreted] Regarding the commercialization of the subvertical media channels for younger audiences, revenue from these channels like [indiscernible] and TIDE increased by 30% year-over-year, with brand clients spending doubling year-over-year, up an impressive 1% to 2%, reflecting sustained brand recognition of our 2C content. [Foreign Language] [Interpreted] As for live streaming and video commercialization, leveraging major technology exhibitions in 2025, including AWE and WAIC, we stepped up our development of live streaming offerings tailored for event coverage. To address diverse market needs, we launched a low ARPU product line, effectively complementing our existing high ARPU premium commercialization content offerings. This expanded the appeal of our video and live streaming offerings to more clients, particularly early-stage start-ups, enabling them to reach more potential users. Furthermore, thanks to our sustained efforts in the global expansion segment in the live streaming content innovation, we achieved a breakthrough with Canton Fair clients, forging important commercial partnerships in earning high recognition from the organizers with our live streaming content. Looking ahead, we will continue to explore a new live stream formats and scenarios, delighting both our users and clients with richer content scenarios in a more diverse service model. [Foreign Language] [Interpreted] Regarding industrial service commercialization, global expansion is a core priority within this segment. At the beginning of 2025, 36Kr signed an agreement to enter a strategic partnership with Hangzhou Tiantang New Era Construction and the Investment Group Company for the Chinese Enterprise International Service Center operations project. This collaboration will leverage our expertise in organizational operations in online content distribution as well as our vast network of global expansion resources to support Tiantang area to be in building a unique service ecosystem and operational framework for corporate global expansion. This initiative aims to create a powerful brand for Tiantang new era, amplifying its international influence and its ability to empower Chinese enterprises to go global. In the first half of 2025, we hosted a total of 11 events on global expansion, continuously supporting our clients' global ambitions. Furthermore, building on the growing influence of the 36Kr industry future, we focused on key sectors driving urban industrial transformation and the future industry development, including low altitude economy, commercial aerospace, advanced manufacturing and new energy and materials. This initiative attracted more than 200 upstream and downstream industry projects in the government entities, fostering deep collaborations in the commercial partnerships. [Foreign Language] [Interpreted] Beyond these advancements across content and commercialization, we continue to expand the boundaries in 2025, consistently driving cutting-edge EDI applications to further optimize content production and commercialization efficiency. [Foreign Language] [Interpreted] On the content side, we provided an intensive coverage of China's AI ecosystem in 2025. At the beginning of 2025, 36Kr made headlines at home and abroad as only tech media outlets worldwide to have exclusively interviewed DeepSeek's founder twice. This inspired the launch of our disruptors program in the first quarter, leveraging our deep roots and expertise in venture-focused media. We crafted a practical communication road map for Chinese tech companies advancing towards brand globalization. In addition to our context -- in addition to our text and a graphic account, the emergence of intelligence, we launched video channels such as AI Map and 36Kr tech in 2025, delighting users with multiple blockbuster videos. Furthermore, along with the launch of our new live streaming series, AI Insider, we hosted multiple live streaming sessions around major events such as WAIC, joining strong engagement and recognition from within the industry and beyond. [Foreign Language] [Interpreted] In addition to AI-focused content, we have actively integrated AI technology in our content ecosystem to enhance efficiency company-wide. Our AI meeting corporate product launched in the second half of 2024, leverages large-scale AI model technologies in AI algorithm to produce AI-powered interviews and generate content. The underlying system incorporates multiple developers of large AI models such as Doubao and Tongyi Tianwen. Among others, we also integrated the DeepSeek in March 2025. To date, AI meeting coverage has covered 993 companies, highlighting their latest initiatives in fundraising ventures. AI meeting coverage has meaningfully improved our content team's efficiency, substantially easing previous manpower limitations and enhancing our coverage of start-ups. [Foreign Language] [Interpreted] In addition, we launched the 36Kr corporate Omni intelligence in October 2024, targeting investors in the secondary market by providing AI-powered daily sentiment analysis reports for public companies. The service currently covers over 7,800 public companies listed in Mainland China and Hong Kong. Users can search, filter and subscribe to reports on their preferred companies, receiving daily analysis in a personalized content format. The product's underlying sentiment data is a collaboration between 36Kr and Soften, a fully owned subsidiary of Beyondsoft. Having nurtured a community of several hundred core users, currently, we have a cumulative user base of 25,000, including 4,220 subscribers. [Foreign Language] [Interpreted] In the first half of 2025, as Doubao's exclusive technology and finance media partner, we launched the Doubao AI agent. Since its launch, we have achieved a consistent 10% weekly increase in user interactions. Furthermore, we plan to roll out user review and discovery platform for AI tools in the second half of the year, integrating AI product guidance, real user reviews and community engagement. This platform will assist both individuals and the businesses in identifying the ideal AI tools, all while facilitating user experience sharing. [Foreign Language] [Interpreted] Our advancement of AI products and tools further underscores the 36Kr's foresight acumen and outstanding execution capabilities in AI, leveraging the inherent synergies between AIGC technology and the content production industry, we maximized AIGC technology utilization in our content production activities this year, including information identification, text processing and image generation. Moreover, we continue to broaden our business scope by actively promoting AI applications across diverse business scenarios. By introducing diverse AI products, we enhanced the coverage in the precision as of our customer outreach initiatives, connecting with a diverse spectrum of enterprises and organizations previously beyond reach due to the bandwidth and manpower limitations and turning them into clients. [Foreign Language] [Interpreted] In summary, 36Kr comprehensively improved its operating efficiency throughout 2025, thanks to our peerless content creation prowess, robust IP assets, deeply engaged users and the commercialization breakthroughs. Looking ahead to the second half of 2025, we will continue to hone our competitive edge in content creation, broaden the reach of our products and the service offerings and further harness AI technology to empower high-quality development among new economy stakeholders. With that, I will now turn the call over to our CFO, Mr. Xiang Li, who will discuss our key financial results. Please go ahead, Xiang.

Xiang Li

Thank you. Thank you for joining today's presentation. We will now review the first half of 2025 financial performance. Please note that all amounts are in RMB unless otherwise stated. Total revenue were CNY 93.2 million in the first half of 2025 compared to CNY 102.4 million in the same period last year. Online advertising services revenue was CNY 74.5 million in the first half of 2025 compared to CNY 80.4 million in the same period last year. The decrease was primarily due to the advertisers adjusting their advertising and promotion strategies in response to macro pressures and to a lesser extent for ongoing optimization of our customer structure to control credit risk, which lead to decreased revenue scope. Enterprise value-added services revenue were CNY 12.2 million in the first half of 2025 compared to CNY 13.4 million in the same period last year. The decrease was primarily due to our proactive and ongoing refinement of service offering to strategically focus on margin improvement. Subscription services revenue were CNY 6.4 million in the first half of 2025 compared to CNY 8.6 million in the same period last year. The decrease was primarily due to the change in our training services business model. Cost of revenue decreased by 25% to CNY 42.5 million from CNY 56.9 million in the same period of 2024 as a result of the company's strict cost control measures. Gross margin increased by 11% to CNY 50.7 million from CNY 45.5 million in the same period of 2024. Gross profit margin was 54.4% in the first half of 2025, representing an increase of 10% from 44.4% in the same period of 2024. The increase in gross margin were primarily driven by savings in payroll-related costs following the strategic workforce optimization. Operating expenses decreased by 52.3% to CNY 55.9 million from CNY 117 million in the same period of 2024. The decrease was primarily attributable to strategic cost management actions, including target workforce reductions and streamlined noncore spending. Sales and marketing expenses were CNY 29.4 million in the first half of 2025, a decrease of 35.1% from CNY 45.4 million in the same period last year. The decrease was primarily attributable to the decrease in payroll-related expenses, rental expenses, marketing and promotion expenses and travel and entertainment expenses. General and admin expenses were CNY 20 million in the first half of 2025, a decrease of 68.2% from CNY 52.8 million in the same period last year. The decrease was primarily attributable to the decrease in the allowance for doubtful accounts payroll-related expenses. Research and development expenses were CNY 6.4 million in the first half of 2025, a decrease of 27.1% from CNY 8.8 million in the same period last year. The decrease was primarily due to the decrease in average compensation level for our research and development personnel as we restructured our R&D team. Share-based compensation expenses recognized in cost of revenue, sales and marketing expenses, research and development expenses as well as general and admin expenses totaled CNY 90,000 in the first half of 2025 compared to CNY 50,000 in the same period last year. Other income was CNY 0.4 million in the first half of 2025 compared to CNY 24.3 million of other expenses in the same period last year. The change was mainly due to the decrease in long-term investment loss. Income tax credit was CNY 4,000 in the first half of 2025 compared to CNY 70,000 of income tax expenses in the same period last year. Net loss was CNY 4.8 million in the first half of 2025 compared to net loss of CNY 95.9 million in the same period last year. Non-GAAP adjusted net loss were CNY 4.7 million in the first half of 2025 compared to non-GAAP adjusted net loss of CNY 95.9 million in the same period last year. Net loss attributable to 36Kr Holdings Inc.'s ordinary shareholders was CNY 5 million in the first half of 2025 compared to net loss attributable to 36Kr Holdings Inc.'s ordinary shareholders of CNY 94.4 million in the same period last year. Basic and diluted net loss per ADS were both CNY 2.307 in the first half of 2025 compared to CNY 44.859 in the same period last year. As of June 30, 2025, the company had cash, cash equivalents and short-term investments of CNY 75.1 million. Well, this concludes all our prepared remarks today. We will now open the call to questions. Operator, please go ahead.

Operator

[Operator Instructions] Your first question comes from Yong Zhang from SWS Research.

Lingyi Zhao

[Foreign Language] [Interpreted] I will translate the question in English. We noted that the company's financial performance has achieved a significant improvement in the first half of 2025. And I would like to ask, firstly, how did the company achieve this financial turnaround? And secondly, what's the company's full year financial outlook for 2025?

Dagang Feng

[Foreign Language] [Interpreted] First of all -- first off, through sustained operational efforts over the past 2 years, we have implemented a series of cost reduction and efficiency boosting measures. This include relocating to an office building with lower rent cost, streamlined our tech and R&D teams, adjusting unprofitable businesses, improving workforce efficiency in core operations and upgrading our organizational structure. As a result, operating expenses decreased by more than CNY 60 million year-over-year, and net loss was narrowed by more than CNY 90 million. [Foreign Language] [Interpreted] While second, our gross profit margin rebounded to over 50% in the first half of this year. This was primarily driven by adjustments to our customers and businesses, coupled with stricter cost controls. Over the past 6 months, we optimized our product portfolio and client structure. Additionally, we implemented more rigorous project approval standards internally to enhance cost management. [Foreign Language] [Interpreted] Well, for the first half of this year, the company will continue to improve its content creation capabilities and optimize our product metrics, focusing on achieving profitability, and we predict that we will have profits at the end of 2025. That all answer for this question.

Operator

Your next question comes from Rui Yin from Sealand Securities.

Rui Yin

[Foreign Language] [Interpreted] Well, thank you for your question, and I will interpret it for you. Well, there are two questions. The first question is, could management share the future plan for your new initiative of industrial service business?

Dagang Feng

[Foreign Language] [Interpreted] Well, first off, we have already hosted and will continue to host many of our IP events in 2025. We have a series of events scheduled for the second half of the year, including [indiscernible], the AI Partner Conference for all industries, the industrial future conference and more. Beyond this IP summit in 2025, we also restructured our content layout business strategy and organizational structure for the industrial service business. While these adjustments are beginning to yield positive outcomes, 36Kr industry future, our new -- all new content channels spotlighting urban innovation, our state-of-the-art technologies and our reach across emerging industries have published over 60 articles within the past 6 months. While a lot of the articles of 36Kr industry future garnered and unmatched a lot of page views on our official WeChat accounts. While leveraging our content influence, we have connected with over 200 upstream and downstream companies in the local government. [Foreign Language] [Interpreted] Moreover, we will continue to expand our overseas ventures, sustaining our strong globalization momentum from 2024. In addition to Southeast Asia, Japan, the Middle East and Europe, we will further strengthen our global network and collaborate with the China Council for the promotion of International Trade Beijing Subcouncil to tap into additional resources from Beijing-based service providers specializing in global expansion-related solutions and identify enterprises seeking global expansion. At the beginning of this year, we made our first foray into operating a local government's global expansion service center in our capacity as a media entity, partnering with Hangzhou Tiantang New Era Construction and Investment Group company on the Chinese Enterprise International Service Center Operations project. In the first half of 2025, we hosted a total of 11 events on global expansion. [Foreign Language] [Interpreted] As our business adjustments are implemented in the second half of the year, our industrial services had 4 new commercial opportunities with optimized offerings that are more sustained and profitable. Well, the second question from Sealand in Ray is, how does the company position itself in generative AI across content and product offerings? [Foreign Language] [Interpreted] Before DeepSeek gained widespread attention, we were the only tech media outlet worldwide to have exclusively interviewed DeepSeek founder Liang Wenfeng twice. Building our existing influence in the AI field in 2025 on the content side, we launched 36Kr tech on Douyin and our new live streaming series, AI Insider as a supplement to our graphic and text content. This initiative delivered multiple blockbuster videos shortly after the debut. In the second half of 2025, we will also launch the future human laboratory graphic account to document ordinary people's real-world interactions with AI and exploring their experiences and the challenges using AI tools. [Foreign Language] [Interpreted] As I just mentioned, we've made good progress this year on several AI products. To date, AI meeting coverage has covered nearly 1,000 companies, highlighting their latest initiatives in fundraising ventures. 36Kr corporate Omni Intelligence currently covers over 7,800 public companies listed in Mainland China and Hong Kong with a cumulative user base of 25,000, including 4,220 subscribers. In the first half of 2025, as Doubao's exclusive technology and finance media partner, we launched our Doubao AI agent. achieving a consistent 10% weekly increase in user interaction following this launch. Well, furthermore, we plan to roll out a user review and discovery platform for AI tools in the second half of this year, integrating AI product guidance, real user reviews in the community space for experiencing sharing. This platform will assist both individuals and businesses in identifying the ideal AI tools for their needs. [Foreign Language] [Interpreted] While in 2025, we will continue to develop our AI content ecosystem, maintaining our edge in covering the latest AI trains in consistently delighting users with premium content associated with AIGC technology. We will also further integrate AIGC technology with content production to unlock new avenues for success. Well, that's all answer for your two questions. Thank you for your question.

Operator

As there are no further questions, I'd now like to turn the call back over to the company for closing remarks.

Xin Wang

Yes, please say the closing remarks.

Operator

This concludes the conference call. You may now disconnect your lines. Thank you. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]