36Kr Holdings - Earnings Call - Q2 2025

Transcript

Operator (participant)

Hello, ladies and gentlemen. Thank you for standing by for 36Kr.

36Kr Holdings Inc.'s 2025 first half earnings conference call. At this time, all participants are in listen-only mode. After management's remarks, there will be a question and answer session. 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.

Speaker 1

Thank you very much. Hello everyone and welcome to 36Kr Holdings Inc. first half 2025 earnings conference call. The Company's financial and operational results were released earlier today and 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 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. 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 prospectus and other public filings. As filed, the Company does not assume any obligation to update any forward-looking statement except as required under applicable law. Please note that 36Kr Holdings Inc.'s earnings press release and this conference call include discussions of audited GAAP financial measures as well as unaudited GAAP financial measures. 36Kr Holdings Inc.'s earnings press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited GAAP measures. Please note that all amounts are in RMB. I will now turn the call over to our Chairman and CEO Mr. Dagang Feng. Please go ahead.

Dagang Feng (Chairman & CEO)

Thank you. Hello everyone. Thank you for joining our first half 2025 earnings conference.

Over the past two years, we have consistently upgraded our organizational structure, optimized 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 RMB 60 million from the same period last year, down 52% year over year. We narrowed our net loss by more than RMB 90 million, an impressive 95% improvement year over year, while our cash reserves remained stable, propelling the company's solid business operation. These operational achievements were largely driven by our ongoing efforts in content innovation, commercialization, and breakthroughs in technological applications, which together optimize our organizational structure and improve workforce efficiency. Let me walk you through our business progress in those three areas. First, content.

We consistently fortified our content ecosystem in 2025, leveraging our PLS content creation promise to steadily extend our influence in terms of a content dissemination network. We expanded our footprint across diverse channels, crossing a comprehensive circulation matrix encompassing major new media platforms like Weibo, Xiaohongshu, Toutiao, Zhihu, Dili, Douban, 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 and diversified our user demographics, further elevating user engagement and thickness. As of the first half of 2025, we had over 36.57 million followers, marking 17 consecutive quarters of growth. We explored a growing area of content formats throughout the first half of 2025, including text, graphics, short and long form videos, audio, and live streaming, enriching our content offering with a greater diversity of styles for text and graphics.

We continue to create high quality content on multiple fronts while maintaining our existing content metrics, building our flagship channels including 36Kr and 36Kr Pro. We continuously broadened our reach in subverticals, 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 account enriched our metrics with both broad content coverage and deep expertise in specialized domains, providing users with invaluable insights into industry trends in the evolving business dynamics. At the same time, we continue to tailor content experiences for younger generations with our old youth and DID subvertical media channels, greatly extending our content reach by successfully engaging younger audiences. At the start of 2025, we rolled out 36Kr Industry Future, our all new content channel spotlighting urban innovation and state of the art technologies, building our influence in emerging industries.

Within six months we released over 60 articles, including a notable feature on the innovative pharmaceutical sector in Jianshan, Zhejiang Province, which garnered over 70,000 page views on our official WeChat account and more than 100,000 total exposures. To date, our accounts cover artificial intelligence, global expansion, advanced manufacturing, digitalization, dual carbon and ESG, hardcore technology, consumer life science and much more, comprising a thriving content ecosystem. In the first half of 2025, under 36Kr official account alone, 339,000 articles achieved over 100,000 page views. Meanwhile, Waves followers expanded by 44% year over year in terms of short video. Our exceptional content creation capabilities earned us widespread visibility in the rave. Our video followers exceeded 9.5 million at the end of the first half of 2025. Our WeChat channel followers surged by 69% year over year.

Following the debut of 36Kr Tech on Douyin in 2025, we released broadband videos such as AI Confident and AI Creator. In addition, our video Undercover Multiple Host Lives garnered over 10 million views on Xiaohongshu, Douyin, Bei Chat channels and DDT for live streaming. This year we optimized our resources with a streamlined team and fully leveraged Bei Chat channels to cultivate an area of content-specific accounts including the Big Deal, Global Expansion, Golden Shovel and 36Kr CO Tips. We also unveiled AI Insider and Episodes 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 in multidimensional reporting. Our Super Live Streaming channel, jointly initiated by WAIC organizing committee and 36Kr, provided professional, cutting-edge, high-quality live streaming content that brought together leading voices in AI.

Focusing on scenario and application-driven insight, the live stream combines full conference reporting, expert panels, cutting-edge technology insights, future trend forecasts and tech product scoops, garnering 50.2 million total views while engaging 1.17 million viewers across the 36Kr live stream metrics. Moreover, at the Appliance & Electronics World Expo 2025 organized by China Household Electrical Appliances Association, 36Kr launched its first robot-themed exhibition Future Plus in partnership with five robotics companies, showcasing the immense potential upside of embodied artificial intelligence in home appliances in the home settings. With this exhibition, the 36Kr Tech channel's live stream drew 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.

In terms of the event IP, we successfully hosted Waves in the first half of 2025, co-hosted by Hi Camp and Hangzhou Liangjun New Town Management Committee. This year's WAIC centered on the new area of venture capital, both investor and entrepreneurial 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 perspectives on the future. This year's WAIC event amassed over 150 million views. In addition, on April 18, 2025, 36Kr hosted the 2025 AI Partner Summit at Moosu Space Shanghai under the theme Here Come 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 in the reshaping industry landscapes and exploring AI super apps' limitless possibilities.

We invited executives from AMD, Baidu, Qihoo, Qualcomm, Bluefish, Dahua Technology, TAL Education, Chu Wang Group, and The Best Band to explore trending topics such as industry AI adoption, AI computing power, AI search, AI-powered imaging, and breakthroughs in AI education. Our 2021 AI Partner Summit garnered an overwhelming 30 million views. Next, commercialization in the first half of 2025, our deep expertise in innovation in content and IT sparked continuous commercialization breakthroughs including client structure optimization, stronger commercialization of sub-vertical media channels for younger audiences, new momentum in live streaming and video revenue, and meaningful progress in industrial service commercialization. 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 Internet client portfolio.

The AI and 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 2020. Regarding the commercialization of the sub-vertical media channels for younger audiences, revenue from these channels like 36Kr Tech and 36Kr Industry Future increased by 30% year over year, with brand client spending doubling year over year, up an impressive 1 to 2%, reflecting sustained brand recognition of our content. 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 analog streaming offerings to more clients, particularly early-stage startups, enabling them to reach more potential users. Furthermore, thanks to our sustained efforts in the global expansion segment and live streaming content innovation, we achieved a breakthrough with Canton Fair clients, forging important commercial partnerships and earning high recognition from the organizers with our live streaming content. Looking ahead, we will continue to explore new live stream formats and scenarios, delighting both our users and clients with richer content scenarios and more diverse service models. 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 Investment Group for the Chinese Enterprise International Services Center Operations project. This collaboration will leverage our expertise in organizational operations, in online content distributions, as well as our vast network of global expansion resources to support Hangzhou Tiantang New Era Construction and Investment Group in building a unique 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 36Kr Industry Future, we focused on key sectors driving urban industrial transformation and future industry developments, including low altitude economy, commercial aerospace, advanced manufacturing in new energy and materials. This initiative attracted more than 200 upstream and downstream industry projects and government entities, fostering deep collaborations in the commercial landscape like commercial partnerships. Beyond these advancements across content and commercialization, we continued to expand the boundaries of our mission in 2025, consistently driving cutting edge AGI applications to further optimize content production and commercialization efficiency. On the content side, we provided intensive coverage of China's AI ecosystem in 2025. At the beginning of 2025, 36Kr made headlines at home and abroad as the only tech media outlet worldwide to have exclusively interviewed Deep Sea'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 roadmap for Chinese tech companies. The one thing towards brand globalization in addition to our context, in addition to our text and 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, drawing strong engagement and recognition from within the industry and beyond. In addition to AI focused content, we have actively integrated AI GDC technology in our content info system to enhance efficiency company wide. Our AI meeting coverage product launched in the second half of 2024 leverages the large-scale AI model technologies in AI algorithm to produce AI-powered views and generate content.

The underlying system incorporates multiple developers' large AI models such as Doubao and Tongyi Tianwen, among others. We also integrated DeepSeek in March 2025. Today, the AI meeting coverage has covered 993 companies, highlighting their latest initiatives or fundraising ventures. AI meeting coverage has meaningfully improved our content team's efficiency, substantially easing pre-discrimin power limitations and enhancing our coverage of startups. 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 accumulated an active user base of 225,000, including 4,220 subscribers. In the first half of 2021, 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 a user review and discovery platform for AI tools in the second half of the year. Integrating AI product guidance, real user reviews, and community engagements, this platform will assist both individuals and businesses in identifying the ideal AI tools, all while facilitating user experience sharing. Our advancement of AI products and tools further underscores 36Kr's foresight, human and outstanding execution capabilities in AI.

Leveraging the inherent synergies between AI GC technology and the content production industry, we maximize AI GC 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 enhance the coverage and precision 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. In summary, 36Kr comprehensively improved its operating efficiency throughout 2025 thanks to our peerless content creation prowess, robust IP assets, deeply engaged users, and 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 product and service offerings, and further harness AI technology to empower high 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 (CFO & Director)

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 was RMB 93.2 million in the first half of 2025 compared to RMB 102.4 million in the same period last year. Online advertising services revenue was RMB 74.5 million in the first half of 2025 compared to RMB 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, our ongoing optimization of our customer structure to control credit risk, which led to decreased revenue scope. Enterprise value-added services revenue was RMB 12.2 million in the first half of 2025 compared to RMB 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 was RMB 6.4 million in the first half of 2025 compared to RMB 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 RMB 42.5 million from RMB 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 RMB 50.7 million from RMB 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 was primarily driven by savings in payroll-related cost following the strategic workforce optimization.

Operating expenses decreased by 52.3% to RMB 55.9 million from RMB 117 million in the same period of 2024. The decrease was primarily attributable to strategic cost management action including target workforce reductions and streamlined non-core spending. Sales and marketing expenses were RMB 29.4 million in the first half of 2025, a decrease of 35.1% from RMB 45.4 million in the same period last year. The decrease was primarily attributable to the decrease in payroll-related expense, rental expenses, marketing and promotion expenses, and travel and entertainment expenses. General and administrative expenses were RMB 20 million in the first half of 2025, a decrease of 68.2% from RMB 62.8 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 $6.4 million in the first half of 2025, a decrease of 27.1% from $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 administrative expenses totaled $90,000 in the first half of 2025 compared to $50,000 in the same period last year. Other income was $0.4 million in the first half of 2025 compared to $24.3 million of other expenses in the same period last year. The change was mainly due to the decrease in long-term investment. Income tax credit was $4,000 in the first half of 2025 compared to $70,000 of income tax expenses in the same period last year.

Net loss was $4.8 million in the first half of 2025 compared to net loss of $95.9 million in the same period last year. Non-GAAP adjusted net loss was $4.7 million in the first half of 2025 compared to non-GAAP adjusted net loss of $95.9 million in the same period last year. Net loss attributable to 36Kr Holdings Inc. ordinary shareholders was $5 million in the first half of 2025 compared to net loss attributable to 36Kr Holdings Inc. ordinary shareholders of $94.4 million in the same period last year. Basic and diluted net loss per ADS were both $2.307 in the first half of 2025 compared to $44.859 in the same period last year. As of June 13, 2025, the company has cash equivalents and short-term investments of $75.1 million. This concludes all our prepared remarks today. We will now open the call to questions. Operator, please go ahead.

Operator (participant)

Thank you.

If you wish to ask a question, please press Star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press Star two. If you are on a speakerphone, please pick up the handset to ask your question for the benefit of all participants on today's call. If you wish to ask your question to management in Chinese, please immediately repeat your question in English. Your first question comes from Yunda Zhang from SWS Research. Please go ahead.

Xiang Li (CFO & Director)

Waika.

Moderator (participant)

I will translate the question in English, but 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, was the company's full year financial outlook for 2025. First off, through sustained operational efforts over the past two years, we have implemented a series of cost reduction and efficiency boosting measures. This includes 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 ¥60 million year over year and net loss was narrowed by more than ¥90 million. 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 six months, we optimized our product portfolio and the client structure. Additionally, we implemented more rigorous project approval standards internally to enhance cost management. 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.

Dagang Feng (Chairman & CEO)

That's all answer for this question.

Operator (participant)

Thank you. Your next question comes from Rui Yin from Sealand Securities. Please go ahead.

Moderator (participant)

Thank you for your question and I will interpret it for you. There are two questions. The first question is could you management share the future plan for your new initiative of Industrial Service business? First off, we have already hosted and will continue to host many of our legacy IP events in 2025. We have a series of events scheduled for the second half of the year including the AI Partner Conference for all industries, the Industrial Future Conference and more. Beyond those IP summits 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 all new content channels spotlighting urban innovation, our state-of-the-art technology and outreach across emerging industries, have published over 60 articles within the past six months.

A lot of the articles of 36Kr Industry Future garnered and amassed a lot of page views on our official WeChat account. While leveraging our content influence, we have connected with over 200 upstream and downstream companies in the local segment. 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 China Council for the Promotion of International Trade Beijing Subcouncil to tap into additional resources from Beijing-based service providers, 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 global expansion services center in our capacity as a media entity, partnering with Hangzhou Tiantang New Era Construction and Investment Group company on the Chinese Enterprise International Services Center Operations project. In the first half of 2025, we hosted a total of 11 events on global expansion. As all business adjustments are implemented in the second half of the year, our industrial services reform commercial opportunities with optimized offerings that are more sustained in the profit. The second question from Sealand in Ray is how does the company position itself in generative AI across content in the product offerings? Before Deep Seek gained widespread attention, we were the only tech media outlet worldwide to have exclusively interviewed Deep Seek's founder Dagang Wenfeng twice.

Building our existing influence in the AI field in 2025 on the content site, 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 delivers multiple broadcaster videos. Shortly after the debuts 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 explore their experiences and challenges using AI tools. 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 or 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 double AI agent, achieving a consistent 20% weekly user interaction following the slides. 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 and real user reviews in a community space for experience sharing. This platform will assist both individuals and businesses in identifying the ideal AI tools for their needs. In 2025 we will continue to develop our AI content ecosystem, maintaining our edge in covering the latest AI trends and consistently delighting users with the premium content associated with AIGC technology. We will also further integrate AIGC technology with content production to unlock new avenues for success. That's all answer for your two questions. Thank you for your question.

Operator (participant)

Thank you.

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

This concludes the conference call. You may now disconnect your line. Thank you.