36Kr - Q4 2021
March 29, 2022
Transcript
Operator (participant)
Hello, ladies and gentlemen. Thank you for standing by for 36Kr Holdings Incorporated fourth quarter and fiscal year 2021 earnings conference call. At this time, all participants are in listen only mode. After management's remarks, there will be the question-and-answer session. Today's conference call is being recorded. I will now turn the call over to your host, Chu-Chen Wang, IR manager of the company. Please go ahead, Chu-Chen.
Chu‑Chen Wang (Investor Relations Manager)
Thank you very much. Hello, everyone, and welcome to 36Kr Holdings fourth quarter and fiscal year 2021 earnings conference call. The company's financial and operation results were released early today and have been made available online. You can also view earnings press release by visiting the IR section of our website at ir.36kr.com. Participants on today's call will include our Co-Chairman and CEO, Mr. Dagang Feng, and our CFO, Ms. Lin Wei. Mr. Feng will start the call by providing an overview of the company and the performance highlights of the quarter in Chinese, followed by an English interpretation.
Ms. Wei 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 safe harbor provision of 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 these and other risks and uncertainties, including in the company's prospectus and other public filings as filed with U.S. SEC.
The company does not assume any obligation to update any forward-looking statements, except as required and applicable law. Please note that 36Kr earnings press release and this conference call including discussion of audited GAAP financial measures as well as unaudited non-GAAP financial measures. 36Kr's earnings press release contain a reconciliation of the unaudited non-GAAP measures to the unaudited GAAP measures. Please note that all amount numbers are in RMB. I will now turn the call over to our Co-Chairman and CEO, Ms. Dagang Feng. Tao, please go ahead.
Dagang Feng (Co-Chairman and CEO)
[Foreign language]
Speaker 8
Thank you. Hello, everyone, and thank you for joining our fourth quarter and fiscal year 2021 earnings conference call.
Dagang Feng (Co-Chairman and CEO)
[Foreign language]
Speaker 8
2021 has been an eventful year given the complex environment. A year we face both expansion opportunities and rising challenges. Despite the rapid global change, China's new economy demonstrated a strong resilience and vitality. Commitment to our mission of empowering new economy participants to achieve more.
We continue to witness as well as accompany many new industries and verticals on their journey of development and expansion. In the meantime, 36Kr delivered solid top-line growth in 2021, with our total revenue reaching RMB 370 million for the full year. Notably, we also achieved quarterly profitability in the fourth quarter of 2021 for the first time in the past eight quarters.
These robust financial results were driven by the significant accomplishment and breakthrough in many aspects, including content strategy, product development, platform refinement, branding influence, and monetization capability.
Dagang Feng (Co-Chairman and CEO)
[Foreign language]
Speaker 8
In the fourth quarter, we delivered another record-setting performance in user traffic, with average monthly page views reaching 800 million, up 35% year-over-year. This 50-quarter of the growth demonstrated 36Kr unique leading position in the new economy. The release of the blockbuster articles, such as CTL crack in the RMB 1 trillion battery empire, Corporate espionage in TRG, undercover intelligence hunters in internet giants, and OU's white paper Stay Up Late, is further evidence of the continued rise of our content influence. These articles attract wide attention and giant popularity with their premier quality.
Dagang Feng (Co-Chairman and CEO)
[Foreign language]
Speaker 8
During 2021, nearly 700 pieces of articles published on their WeChat official account, amassed over 100,000 reads each, with some of them attract more than 200,000 views. Even more impressively, some of the financial articles achieved a phenomenal level of readership, over 300,000 reads, and in some cases over 600,000 reads.
Meanwhile, our content platform strategy remain intact as we dedicated to further enhancing our content quality deepen and diversify through both PGC and UGC. In addition, our ongoing efforts bore fruits with results in product development, presentation formats, distribution channels, user experience, and the expansion of our footprint.
Dagang Feng (Co-Chairman and CEO)
[Foreign language]
Speaker 8
With respect to the content column and product development, we continue to expand our high-quality content metrics. We target a wide range of industries, including new consumption, smart vehicle, high-end manufacturing sector, corporate digital transformation and the Beijing Stock Exchange, dual carbon economy. Meanwhile, we place more focus on new economy and capital market and continue to upgrade our product offering across both private and secondary market. To this end, we launched a series of new products such as Digital 36Kr, Kr Finance, OU, Super Review, 36Kr Research Institute, Kr Carbon and Waves, providing in-depth professional analysis of latest business trends. In addition, we continue to optimize and innovate a series of IT products such as Wise Conference, 36Kr and 36 Speedway Star Classes, and 36Kr Enterprise Service Review Platform.
Dagang Feng (Co-Chairman and CEO)
[Foreign language]
Speaker 8
Regarding content formats, in addition to reinforcing our advantage in text and image, we have further strengthened our strategy efforts and investment in audio live stream. In particular, short form videos. We have produced nearly 200 short-form videos acquiring over 600 million views across our platform with close to 20 million likes.
These videos are unique in terms of topic selection, visual presentation, appealing to a broad range of user demographics, and have currently attracted more than 6 million followers of our video across our platform. It is particularly noteworthy that the number of followers to our official corporate account on Bilibili now exceeds 1 billion, a testament to the increasing popularity and rising influence of 36Kr short-form video content among young audience.
Dagang Feng (Co-Chairman and CEO)
[Foreign language]
Speaker 8
36Kr audio content is another highlight of our content metrics. An example of one of our exciting audio program is Kr Walkman, which provides users with the latest business highlights in short audio clips that take just a few minutes to digest. We also collaborate with new radio to broadcast our business-centric product program on their new radio playlist, enabling 36Kr to deliver premier content to a wide audience across various settings. Furthermore, live streaming is a significant addition to our content advantage. Leveraging its interactive-first feature and 36Kr's rich pool of the business gurus and industry experts, we have attracted many new users to our live stream content.
Dagang Feng (Co-Chairman and CEO)
[Foreign language]
Speaker 8
On the content distribution front, we continue to reinforce our omni-channel distribution strategy, establishing a more comprehensive range of channels for distribution. In addition to our proprietary platform, 36Kr website and 36Kr app, we also distribute our content through external channels such as our official WeChat account, Weibo, Zhihu, Douyin, Kuaishou, Bilibili and Xiaohongshu, and several other web portals and apps. We have expanded our reach to almost all the mainstream platforms and our followers exceed 22 million, providing us unprecedented influence.
Dagang Feng (Co-Chairman and CEO)
[Foreign language]
Speaker 8
In terms of user experience, we continue to optimize and upgrade our product offering. For example, the iOS desktop widgets and the brand new UI/UE upgrade have made it easier for users to discover and browse our content more conveniently and smoothly. Moreover, the new user achievement system and localized community operation strategy have greatly promoted user activity and enhanced user stickiness in our platform. Compared with prior year, on a year-over-year basis, in 2021, the number of users posting comments increased by 47%. The number of comments rose by 204%, and our third-day retention rate grew by 97% across 36Kr websites and 36Kr apps.
Dagang Feng (Co-Chairman and CEO)
影响力的版图上，我们在国内区域扩张、下沉市场和国际拓展上都有新的布局。2021年8月，我们正式在深圳成立了第二总部，积极投入到大湾区如火如荼的新经济发展浪潮中。我们的地方站业务拓展至杭州、成都、郑州、西安、重庆等十二个重点省市，加大对下沉市场的和产业升级的潜力挖掘。另外一方面，我们的海外业务，36Kr Global也从东南亚进一步拓展到澳洲和欧洲。此外，36Kr的优质内容还被彭博终端、道琼斯和日经社等收录，极大地提升了我们在全球范围内的影响力。
Speaker 8
Moving to expansion of 36Kr footprint. We extend our presence across a broad range of domestic market, lower tier cities and international markets. In August 2021, we established our dual headquarters in Shenzhen. Through a localized operation strategy, we have exhaustively participated in the wave of new economy development in Greater Bay Area. We have expanded our regional office to 12 key provinces and cities, including Hangzhou, Chengdu, Zhengzhou, Xi'an, Chongqing, to explore the potential of the low-tier market and the industry upgrades. On international front, 36Kr Global further expanded its presence from South Asia to Australia, New Zealand and Europe. Furthermore, 36Kr primary content is also adopted by Bloomberg, Dow Jones and Nikkei, which substantially bolster our global influence.
Dagang Feng (Co-Chairman and CEO)
通过以上各方面的举措，2021年我们的客户群体得以快速增长，从创投企业、TMT巨头、投资机构、政府到传统企业和C端客户，这六大客群均在持续壮大。同时我们也打造了赋能企业从初创到发展壮大的全生命周期的产品和服务闭环，使我们的商业效率不断提升。下面我们就来回顾一下我们在商业化方面取得的进展。
Speaker 8
Driven by the initiatives above, our customer bases grow rapidly in 2021. Each of our six major customer communities continue to expand, including startups, TMT giants, investment institutions, local governments, traditional enterprises, and individual clients. At the same time, we have built a closed-loop product and a service offering that empower the entire enterprise life cycle. Spanning from startup and development to the expansion stage, we are also continuously boosting our new commercialization efficiency. Next, let us look at our achievements in terms of commercialization.
Dagang Feng (Co-Chairman and CEO)
在2021年疫情反复、经济形势复杂多变的大背景下，我们2021财年的各项业务均取得可比口径的坚实增长。其中广告收入达2.15亿元，同比增长24%，高于同行业平均水平。全年广告客户数量超过500家，客单价超40万元，同比取得双增长。不同于其他流量平台，36Kr以树立品牌美誉度及形象的品宣广告，得益于强抗扰性和弱周期，显示出强大的收益潜力。广告主选择与36Kr进行合作，一方面是基于36Kr多年在新经济领域的行业积累和强大影响力，另外一方面则看重36Kr的全平台运营，覆盖广大而且精准的高质量客群，传播力有目共睹。
Speaker 8
Despite the recovering COVID-19 outbreaks and complex macroeconomic environment, we achieved solid top-line growth on comparable basis in fiscal year 2021. Our full year advertising revenue reached RMB 250 million, representing a year-over-year increase of 24%, which was above the industry average. In addition, the number of advertisers exceeded 500, and average revenue per advertising customer was above RMB 400,000, both achieving solid year-over-year growth.
Unlike other traffic platforms, 36Kr advertisement for building brand reputation and visibility has benefited from the platform's significant leverage capability as well as limited impact of the recent macroeconomic cycles, enabling us to exhibit powerful revenue potential. The advertisers choose to collaborate with 36Kr because of a deep-seated industry expertise and a strong influence on the new economy. On the other hand, they are also able to harness 36Kr omnichannel distribution, which accurately target distinct audience within our high quality customer bases, a testament to our powerful platform asset.
Dagang Feng (Co-Chairman and CEO)
尤其是我们的短视频业务以及众多C端栏目的推出，正日益显现36Kr在品效合一方面的广告优势。我们利用短视频可视化、吸引力强、内容丰富、易于传播等副媒体特点，为客户提供品牌宣传和内容影响力解决方案。我们的广告客群从B端扩大至向C端，面向C端用户的品牌，吸引了Intel、三星、耐克、宝洁、爱奇艺、知乎、元气森林等众多国际和本土知名客户，客单价也随之节节攀升。
Speaker 8
Notably, our short form video business and the launch of viral content columns targeting customer end users has demonstrated 36Kr advertising advantages in achieving both in brand awareness and the performance. Leveraging the rich media characteristics of the short form video, such as its visual effect, strong engagement, diverse content, and wide distribution capabilities, we provide brand promotion and content marketing solution to help customer enhance their brand image and influence. Our customer bases has expand from corporate clients to brands targeting customer audience, including we have Samsung, Nike, P&G, iQIYI, Zhihu, Genki Forest, and many other international and well-known local companies. At the same time, our average revenue per customer has been rising steadily.
Dagang Feng (Co-Chairman and CEO)
接下来是我们的企业增值业务。2021年，我们主动缩减毛利率较低的整合营销业务，加大线下活动以及咨询服务的投入，同时继续孵化企服点评平台为抓手的平台级企服产品，积极打造第二增长曲线，取得良好的进展。2021年，企业增值服务总营收达到7,403万元，其中线下活动和咨询服务比较显著增长，同比分别增长19%和13%。
Speaker 8
Turning to the latest update regarding our value-added enterprise service. In 2021, we have strategically reduced low-margin integrated marketing business while increasing our investment in offline events and consulting service. Well, we are proactively incubating platform-scale enterprise service product such as Enterprise Service Review Platform with the purpose of driving our second growth curve and as a result have made positive growth progress. Our full-year revenue from enterprise value-added service reach RMB 74 million. Among those service, offline events and consulting service record a remarkable growth of 19% and 13% compared with 2020 respectively.
Dagang Feng (Co-Chairman and CEO)
我们的线下活动突破以往线下交互为主，更常态化地利用视频直播等多种形式，更灵活地服务客户。第二季度，我们以《硬核时代》为主题的WISE大会，在线下高质量峰会的基础上，还与抖音进行跨界合作，进行线上预热直播，以及二次创作分发，提高《硬核时代》的热潮。2021年WISE大会不仅收入创下佳绩，且全平台的曝光量达到13亿次，成为头部财经媒体与流量平台合作的标杆，实现共赢。
Speaker 8
Besides usual offline events, we adopt more flexible approach to serving customers by regularly leveraging the video and live stream formats for offline events. In the fourth quarter, we hold our annual WISE Conference with Year of Hardcore as the theme. In addition to holding high quality offline summit, we also partnered with Douyin to create an online live streaming program and the same theme to promote our WISE Conference. We successfully create a long tail effect from event promotion to live stream and finally the content recreation and the distribution, and turn to the event into a major industry influencer. Not only did the revenue from 2021 WISE Conference remained a high level, but the user exposure also exceeds a total of 1.3 billion across our platform, effectively establishing this partnership as a benchmark for win-win collaborations between financial media and Douyin.
Dagang Feng (Co-Chairman and CEO)
2021年，我们举办了多场线下活动，活动数量及单场收入均较去年有明显上升。我们的活动涉及产业趋势、投资热点、元宇宙探讨、出海电商，到地方产业招商引资、产业升级等众多主题。
Speaker 8
In 2021, we held various offline events. Furthermore, the number of our events and the revenue per event have both increased compared with last year. Our events covered a diverse range of topics, including industry trends, investment opportunities, the outlook for the matrix, overseas commercial expansion, local investment promotion and industry operates.
Dagang Feng (Co-Chairman and CEO)
咨询服务作为企业增值服务的重要组成部分，2021年也在持续发力。在企业端，我们帮助字节跳动、蚂蚁集团、蘑菇置业和安德医治等头部科技企业，出具行业定制化研究报告。在政府端，我们为深圳、杭州、西安等多地政府提供关于招商引资、新区建设规划等研究报告，产生了可观的商业化变现。2021年11月，36氪研究院受邀加入算术研究联盟，是业界对我们的权威认可。
Speaker 8
In 2021, we also continue to make positive progress in our consulting service, an important component of our enterprise value added solution. On the corporate side, we help leading high tech companies such as ByteDance, Ant Group, issue customized industry research report. On the government side, we produce research report on the investment promotion and construction planning for new development zone for local governments in Shenzhen, Hangzhou, Xi'an, among others, generating substantial monetization opportunity. In November 2021, 36Kr Research Institute joined a financial research alliance, a testimony to our professional capabilities with recognition from professional authorities.
Dagang Feng (Co-Chairman and CEO)
下面我来详细介绍一下我们的重点孵化项目，36Kr企服点评平台的进展。在数字化智能化的趋势下，SaaS行业进入了快速发展时期。据iResearch报告显示，中国企业级SaaS行业规模将从2020年的538亿增长至2023年的1,300亿元，年复合增长率达到34%。正是看到了企业数字化转型升级过程中巨大的产品需求和市场前景，36Kr企服平台应运而生。经过一年多的打造，36Kr企服平台已成为中国最大、最权威和最便捷的企服软件选型平台。
Speaker 8
Next, I would like to share in detail the upgrades regarding our key incubation project, the 36Kr Enterprise Service Review Platform. The digital and smart technology trend has ushered the SaaS industry into a year of the fastest growth. According to iResearch, the size of China enterprise SaaS market is expected to grow from RMB 53.8 billion in 2020 to RMB 130 billion by 2023, with a compound annual growth rate of 33.4%.
As a result, we launched 36Kr Enterprise Service Review Platform to fill this huge product demand and the market potential driven by corporations undergoing digital transformation. After more than a year of optimization and fine tuning, our Enterprise Service Review Platform has become China's largest, most authoritative and most convenient enterprise service software selection platform.
Dagang Feng (Co-Chairman and CEO)
主要源于买卖双方的信息不对称的痛点。三十六氪企服点评通过以下几点打造产品，帮助寻求企业数字化升级服务中的各方做出最佳决策。第一，丰富产品信息库，覆盖中国企服市场的核心赛道，以及每个赛道头部的大部分企业，可对同类型软件进行功能、价格和评分等维度的对比。第二，增加用户真实点评的量级，寻找软件的真实使用者，分享他们的真实使用体验。第三，知识结构化，将企服行业碎片化的知识连接融合起来，组成结构化的知识体系，帮助用户获得更多相关的知识和信息。
Speaker 8
Targeting the pain point of information asymmetry between demand side and the supply side service providers. 36Kr Enterprise Service Review Platform team has built its platform with three notable features to empower every enterprise service seeking the best solution for their corporate digitalization transformation.
First, a library rich in product information covering the key industries in China enterprise service market as a measure of leading players in each industry, allowing the demand side to compare similar software products in terms of the functionality, price, rating. Secondly, authentic user reviews from real users of the software products willing to share their experience. Third, a structured knowledge system is created by integrating various distinct items of knowledge from across enterprise service industry to help users accurately aggregate knowledge and the information.
Dagang Feng (Co-Chairman and CEO)
截至2021年第四季度，平台已累计收录了近6,000款软件，环比上升13%，同比增长近20倍。月活用户近60万，环比上升72%，同比增长近600倍。累计评论近两万，环比提升超400%，同比增长千倍。产品打造日趋完善。
Speaker 8
As of the fourth quarter of 2021, we have grown our Enterprise Service Review Platform to include close to 6,000 software applications, up substantially and at 20 times year-over-year. The platform's monthly active users reached almost 600,000, recently a 72% increase from the third quarter, and a growth of nearly 600x year-over-year. The cumulative comments amount to nearly 20,000, increasing more than 400x quarter-over-quarter and 1,000 times year-over-year. These outstanding operational metrics further prove that our product review portal has become appealing to an even broader but still growing user base.
Dagang Feng (Co-Chairman and CEO)
2022年，我们将加速平台护城河建设，提升36氪在企服点评市场的综合影响力。首先是建立中国企服行业评价标准，利用先发优势带领用户新势；第二完善产品矩阵，加固护城河。最后，作为独立的三方平台，扩充真实评论，引领用户在平台发声，确保平台的客观公正性。平台也会逐步渐开始商业化试水，通过销售线索信息、咨询服务以及平台营销等举措展开商业化变现。我们将集合自身优势，联手国内一线SaaS服务、云服务提供商、金融、新能源及医疗等重点数字化有需求的企业，树立标杆案例，打造旗舰平台。目前，企服点评平台已收录市面超过60%的企服产品。我们有理由相信，随着36氪和企服点评平台上覆盖率不断加深，我们的平台优势、产品优势以及服务优势，更能助力我们在这个千亿规模的市场中拔得头筹，实现高的商业回报。
Speaker 8
In 2022, we are accelerating the development of 36Kr competitive advantages and overall influence in the enterprise service review market. Firstly, we will set the evaluation standards for China enterprise service industry and leverage our first mover advantages to educate the market. Second, through improvements in the product library, user reviews, knowledge map and the key influence library, we will further reinforce our enterprise service review platform and reinforce the product competitive advantage. In addition, as an independent third party, 36Kr Enterprise Service Review Platform will collect real comments from a wide user demographic, as well as encourage users to voice their opinions to ensure the objectivity and fairness of our platform.
Furthermore, we will gradually begin testing Enterprise Service Review Platform's commercialization potential, looking to achieve monetization by generating sales leads, providing consulting service, and a brand marketing solution, plus other effective measures to realize the monetization of our platform. Building on our own advantages, we will collaborate with leading domestic SaaS and product service providers as well as industries with digitalization demands such as finance, new energy and healthcare to establish Enterprise Service Review benchmark and create a flagship platform.
To date, we have grown the platform to cover over 16% of Enterprise Service products in the market. We believe that with deepening Enterprise Service Review portals market penetration, advantage of the platform's product and service will position us to capitalize on the best opportunity of this 100 billion RMB market and enable us to achieve impressively further returns.
Dagang Feng (Co-Chairman and CEO)
最后是我们的订阅服务。2021年全年收入为2,802万元，同比增长35%。机构和企业订阅客户数及客单价均得到了提升，客户数同比增长40%，客单价同比增长9%。
Speaker 8
Last but not least, let's turn to our subscription service. Our full-year revenue from subscription totaled RMB 28 billion, up 35% year-over-year. In 2021 We achieved the solid growth in number of institutional and enterprise customers, which increased by 40% year-over-year, with average revenue per customer growth by 19% year-over-year.
Looking ahead to 2022, a prominent brand pioneering platform dedicated to serve the new economy. We will continue to build and develop our content, products and ecosystem to provide entire life cycle of the service for our customer. We will continuously optimize the three major business segments to grow our customer base, including enhancing new formats such as short form video programs targeting individual subscribers.
We will also increase our Pro and explore new business opportunities from low-tier markets and industry upgrades. In addition, regarding our emerging business, we will continue to maintain an unwavering commitment to bolstering the research and development, operations and commercialization of 36Kr Enterprise Service Review Platform. We believe this Enterprise Service Review Platform will become our second growth curve. For quite some time, we have been facing a challenge of COVID-19 outbreaks and a complex macroeconomic environment.
Despite those difficulties, we have sustained by exceptional performance of our core business, which achieved solid year-over-year growth, riding the wave of industry upgrades and digital transformation aimed at the rise of the new consumption, advanced technology and dual carbon industry, plus the growth of specialized, refined, differentiated and innovative enterprises. We will seize the historical opportunity to build a system of optimized product and service, achieving faster and high quality business growth.
We expect 36Kr will continue to deliver strong revenue growth and achieve profitability on a full-year basis in 2022. Under the circumstances that the COVID-19 pandemic is substantially contained and the macroeconomy is stabilized, they will result in a comprehensive reshaping of 36Kr business fundamentals, promoting the market to reassess 36Kr valuation and usher in the inflection point of a company's value. We are confident that our robust long-term fundamentals will empower us to forge ahead to deliver long-term sustainable value to society and our shareholders.
Dagang Feng (Co-Chairman and CEO)
With that, I will now turn the call over to our CFO, Ms. Lin Wei, who will discuss our key financial results. Please go ahead, Lin.
Lin Wei (CFO)
Thank you, Feng, and hello, everyone. We are very pleased to report another set of solid financial results for the fourth quarter and fiscal year 2021 despite the intermittent resurgence of COVID-19 and the complex macroeconomic environment. We achieved strong growth across all three business segments on a comparable basis in fiscal year 2021, beating Wall Street consensus on both the top line and bottom line.
I want to highlight that our online advertising business grew 24% year-over-year, outperforming most of our peers in the industry. Most importantly, as we continuously improve our operating efficiency, we booked record high gross profit margin of 65% and a net income of RMB 15.4 million for the fourth quarter of 2021, the first time of profitability in the past eight quarters.
In addition, we ended the year of 2021 with a very strong cash position of RMB 216.1 million, as we generated positive operating cash flow in both the fourth quarter and full year of 2021. When we venture further into 2022, we will continue to solidify our core strength in content production and service offerings while expanding our monetization channels. We believe that we are well positioned to capture the vast opportunities in China's new economic space and create greater value for our users, customers and shareholders. Now, I'd like to walk you through more details of our fourth quarter and fiscal year of 2021 financial results.
Online advertising services revenue increased 10% year-over-year to RMB 76.4 million in the fourth quarter, and grew 24% year-over-year to RMB 214.7 million for the full year of 2021. The increase was primarily attributable to more innovative marketing solutions we provided to our customers. The number of advertising customers and the average revenue per advertising customer both achieved growth in fourth quarter and full year of 2021.
Enterprise value-added services revenue were RMB 30.3 million in the fourth quarter of 2021, and RMB 74 million for the full year of 2021. As we stated in our earnings release, starting from the first quarter of 2021, we ceased to act as a principal assuming low gross margin businesses and acted solely as an agent.
Hence, revenues of such businesses were recognized on a net basis from the first quarter onward. To increase comparability of operating results and help investors better understand our business performance and operating trends, we introduced gross transaction value as a supplemental metric to describe our business.
Gross transaction value of enterprise value-added services increased 46% year-over-year to RMB 60.5 million in the fourth quarter of 2021, and increased 12% year-over-year to RMB 217.2 million for the full year of 2021. In particular, our consulting services revenues and offline events revenues increased by 13% and 19% year-over-year, respectively, for the full year of 2021, reflecting the sustained growth despite the influence of the lingering pandemic.
Subscription services revenue decreased by 11% to RMB 9.6 million in the fourth quarter of 2021, mainly because some of our offline training programs were canceled or delayed due to the resurgence of COVID-19. For the full year of 2021, our subscription revenues increased by 35% to RMB 28 million, primarily attributable to our continuous efforts in offering high-quality subscription products. Total revenues were RMB 116.3 million in the fourth quarter of 2021, and RMB 316.8 million for the full year of 2021, respectively.
Taking into consideration of the aforementioned changes in revenue recognition for enterprise value-added services, where there was a RMB 30.2 million and RMB 143.2 million variance between revenues and gross transaction value for fourth quarter and full year, investors can figure out that our overall business trend is upward and demonstrated solid year-over-year growth. Cost of revenues decreased 42% year-over-year to RMB 40.7 million in the fourth quarter, and decreased 51% year-over-year to RMB 128.8 million for the full year of 2021. The decrease was primarily due to our continuous shift in focus towards higher margin businesses and recognition of certain revenues on a net basis.
Gross profit increased 49% year-over-year to RMB 75.6 million in the fourth quarter of 2021, and increased 50% year-over-year to RMB 187.9 million for the full year of 2021. Gross profit margin reached a record high of 55% in the fourth quarter of 2021, compared to 42% in the same period of last year. For full year 2021, gross margin was 59% compared to 52% last year. The increase was primarily due to our continuous shift in focus towards higher gross margin businesses and recognition of certain revenues on a net basis, as well as our improved operating efficiency in fiscal year 2021.
Operating expenses decreased 32% year-over-year to RMB 61.6 million in the fourth quarter of 2021, and decreased 28% year-over-year to RMB 282 million for the full year of 2021. Sales and marketing expenses were RMB 39.3 million in the fourth quarter of 2021. The increase was primarily attributable to an increase in payroll-related expenses and marketing expenses, partially offset by decrease in share-based compensation expenses. For full year 2021, the sales and marketing expenses were RMB 143.9 million. The increase was primarily attributable to an increase in payroll-related expenses, partially offset by the decrease in share-based compensation expenses and marketing expenses.
G&A expenses were RMB 9.6 million in the fourth quarter, and RMB 90.6 million in full year 2021, representing an 88% and 57% reduction compared to the corresponding period of last year. The decrease was primarily attributable to a release of the allowance for credit losses and the decrease in share-based compensation expenses, partially offset by the increase in payroll-related expenses.
The release of allowance for credit losses was mainly due to improved collection of accounts receivable, as well as continuing to increase our efforts in accounts receivable collection. Research and development expenses were RMB 12.6 million in the fourth quarter of 2021, and RMB 47.5 million for the full year of 2021. The year-over-year increase was primarily attributable to the increase in payroll-related expenses as we bolstered our research and development capabilities.
Share-based compensation expenses recognized in cost of revenues, sales and marketing expenses, research and development expenses, as well as G&A expenses totaled RMB 4.1 million in the fourth quarter of 2021, compared to RMB 9.1 million in the same period last year. For full year 2021, the total amount of share-based compensation expenses were RMB 15 million, compared to RMB 39.3 million in 2020.
Other income was RMB 1.5 million in the fourth quarter of 2021, and RMB 3.6 million for full year 2021, respectively, compared to other expenses of RMB 10 million and RMB 8.3 million in the corresponding period of last year. The fluctuation was primarily attributable to net losses recognized from equity method investments in fiscal year 2021.
Net income was RMB 15.4 million in the fourth quarter of 2021, compared to RMB 90.1 million net loss in the same period of last year. This is the first quarter we achieved quarterly profitability in the past eight quarters. For the full year of 2021, net loss was RMB 90.6 million, compared to RMB 279.3 million in 2020, a significant reduction of full year net loss. non-GAAP adjusted net income was RMB 19.6 million in the fourth quarter of 2021, compared to RMB 81.1 million net loss in 2020. For full year 2021, the adjusted net loss was RMB 75.6 million, compared to RMB 240.1 million last year.
Net income attributable to 36Kr Holdings ultimate shareholders was RMB 14.6 million in the fourth quarter of 2021, compared to RMB 91.4 million net loss in the same period of last year. For full year 2021, net loss attributable to the owner shareholders were RMB 89.6 million, compared to RMB 280.2 million in last year. Basic and diluted net income per share were both RMB 0.014 in fourth quarter of 2021, compared to net loss per share of RMB 0.09 in the same period of last year. For full year 2021, the basic and diluted net loss per share were both RMB 0.087 compared to RMB 0.275 in 2020.
As of December 31, 2021, the company has cash equivalents and short-term investments of RMB 216.1 million, the highest cash level in the past two years. This was mainly because we generated positive operating cash flow in both the fourth quarter and full year 2021. Lastly, let me provide some updates on our share repurchase program.
On May 6, 2020, the company announced that its board of directors authorized a share repurchase program under which the company may repurchase up to a total of 1 million of its American Depositary Shares, each representing 25 Class A ordinary shares. As of December 31, 2021, the company had repurchased approximately 786,000 ADSs for approximately RMB 17.5 million under this program. This concludes our prepared remarks. We will now open the questions.
Operator (participant)
Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. As a reminder, if you wish to ask a question, please press star and one on your telephone keypad and wait for your name to be announced. 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. The first question comes from the line of [Jing Tong] from CICC. Please ask your question.
Speaker 6
I have two questions. The first is, under the current macro environment, how do you view the advertising business in 2022? And my second question is, how did COVID-19 in March affect the company's offline business in the first quarter? Thank you.
Dagang Feng (Co-Chairman and CEO)
[Foreign language]
Speaker 8
Thanks for your question. For your first question, I would like to say in 2021, our advertising revenue grew 24% year-over-year, a relatively high growth rate compared to our peers. As the pandemic comes under control, I believe the economy will gradually recover, and we believe the advertising industry will trend upward as well. From our perspective, our advertising growth mainly comes from two sources, the increasing number of advertisers and the steady growth of ARPU. As 36Kr distribution channels become more diversified and target more niche markets, the new forms like short form videos, we expect both number of advertisers and ARPU will grow.
We subsidized the branding advertising, which is characterized by stronger leverage and less susceptibility to economic cycles. Therefore, our advertising business were less affected by the inflections in the economy. From the industry side, it's more dependent on the pandemic situation. I can, I believe the new media will be better than the traditional media. That's my opinion about the industry.
Dagang Feng (Co-Chairman and CEO)
好的，第二个问题关于疫情对线下活动的影响。首先，疫情确实会对线下活动展开有一个比较明显的影响，但是其实我们也在跟客户去沟通，说将部分的线下活动转变成一种线上跟线下相结合的直播的形式，那这样可以有效减少对疫情的影响。而且我们其实包括去年十二月份的这个WISE会已经证明了我们的线上跟线下相结合的模式，对客户来说是影响力更好的。这相对来说整个效果会比单纯的线下活动有可能会更好。然后另外从历史数据上来看，Q1并不是一个三十六氪举办线下活动的高峰期，所以对我们的收入影响不会很大。然后另外就是我们迄今为止发现的我们的所有客户，在线下活动需求方面，我们发现的主要的他们的主要变化是在延期，所以在三月份之后主要是在延期，延期到四月份或者五月份，而并不会把项目取消掉。
Speaker 8
About your second question. The pandemic will indeed impact our offline events. However, we are planning to communicate with customers about the moving certain events online or adding the live streaming components, which will help alleviate the pandemic impact. From historical perspective, Q1 is not the peak season for offline events in any cases, so the pandemic should not have too great an impact on revenue. We also may communicate with our customer about the postponing their events so that even if our Q1 revenue is affected by postponements, full year revenue will remain intact. Thank you.
Operator (participant)
Thank you. The next question comes from the line of PeiPei Qiu from Industrial Securities. Please ask your question.
PeiPei Qiu (Financial and Equity Research Analyst)
你好，管理层可以听到我的声音吗？
Lin Wei (CFO)
嗯，可以，佩佩。
PeiPei Qiu (Financial and Equity Research Analyst)
好，丹老师，魏总，恭喜公司取得这么好的业绩。那我的问题是关于内容这一块的。我们知道，三十六氪是从新经济为起点，最近也在不断地拓展这个内容的边界。那其实也想了解一下有没有一些这个量化的效果可以跟我们分享。那公司是如何一直保持自己这个在内容这一块的优势。I will translate my question. We know that company start with new economy content and recently making a lot of assets to expand the content boundaries. Could you give us more color of what you've achieved and how would you maintain your competitive advantage in content ID? Thank you.
Lin Wei (CFO)
Thank you for your question, PeiPei. Yeah, you ask a very good question. Yes, in terms of content, innovation and production, we have been doing a lot of initiatives. First of all, we have been expanding our presentation format. For example, we previously only have text, flash information, flash news and pictures. Now we are expanding to more rich format, including short videos, audio formats, as well as live streaming formats.
That's number one on the presentation format. Number two, on our columns and content productions, we have mentioned in our prepared remarks that we now have many WeChat account matrix, including our 36Kr official account and 36Kr Pro and 36Kr Finance and 36, the secondary market WeChat accounts and the 36Kr Research Institute, 36Carbon and the Waves, which target at the institution as well as you know, all users we targeting at the younger generation lifestyle content as well as Super Review.
For example, we provide real name reviews for the 3C products as well as new consumption products. Overall, our presentation formats as well as the coverage of the channels and the verticals are both expanding. That translates into our commercialization. First of all, our short form video contribute a lot to our commercialization. We have more C-end customers than before, when we only have a lot of B-end customers, for example Intel.
Now we are expanding into [inaudible] Nike, P&G, a lot of beverage brands. That's our expanding the category of customers. So that helped us to increase our advertising customers as well as our pool. That's why we are very confident, as Mr. Feng just mentioned, that we expect in 2022, both our advertising revenue as well as our enterprise value add services revenue will both grow and we expect we will achieve a full year profitability in 2022. Hope that answers your question, PeiPei.
PeiPei Qiu (Financial and Equity Research Analyst)
Very clear. Thank you.
Operator (participant)
Thank you. The next question comes from the line of Don Tang from TH Capital. Please ask your question.
Speaker 7
嗨，管理层晚上好，感谢接受我的提问。恭喜非常强劲的业绩啊。我的问题是有关于那个毛利率的，我们可以看到，公司四季度的毛利率是达到了65%，创下了历史新高，然后比上个季度也提高了大约9个百分点。我的问题就是可不可以请管理层分享一下这个毛利率改善的原因和2022年毛利率的一个趋势呢？我自己快速地翻译一下。Hi management, thanks for taking my question. I have a small question regarding margin. So the overall gross margin was a record high at 65%, up about 23 percentage points year-over-year and 9 percentage points quarter-over-quarter. I wonder what the reason for this trend and how should we look at margin outlook in 2022? Thanks.
Lin Wei (CFO)
Thank you for your question, Don. That's a very good question. Yes. Our fourth quarter gross margin of 65% is a record high, actually, in our history. That's a very amazing gross margin level. Actually the year-over-year increase of gross margin, mainly because we recognize certain revenues on that basis. That gives us almost a 20% raise for gross margin. If you compare every quarter compared to the first three quarters of last year, we basically increased gross margin by almost 20%. That's the main reason for year-over-year improvement of gross margin.
The quarter-over-quarter gross margin improvement mainly comes on the economy of scale, which in other words, if you look at our revenue for the fourth quarter, due to seasonality, the fourth quarter is the strongest quarter for the entire year. We achieved almost RMB 120 million revenue. That's a very high level. Our cost remain on a relatively stable level. That's why, you know, you will have a leverage here, which we call it economy of scale. That's why sequentially our Q4 gross margin also increased a lot. To a smaller extent, because some of revenues, we recognize the revenue on a cash basis out of prudential accounting policy.
Due to our, you know, efforts in collecting account receivables, we have improved a lot in the fourth quarter. Before year-end, we collected some revenues on cash basis that also were recognized in Q4, which we couldn't recognize in the previous quarter. That also resulted in a higher, you know, gross margin in the fourth quarter. Hope that answers your question, Don.
Speaker 7
Very clear. Thank you.
Lin Wei (CFO)
Thank you.
Operator (participant)
Thank you. The next question comes from the line of Lingyi Zhao from SWS Research. Please ask your question.
Lingyi Zhao (Retail Chief and eCommerce Analyst)
管理层好，谢谢管理层接受我的提问。我是申万赵灵一。首先恭喜三十六克取得优异的业绩。我有两个问题想向管理层提问。第一个是我们近期也看到了冯大刚老师讲过的一个专访，不要变成一个以广告为主的公司，那当前广告业务仍然是公司的核心主业，如何看待广告业务以及其他业务的其他新业务的潜力？这个是我的第一个问题。那我先翻译一下吧。Uh, thank you for taking my questions. I have two questions. One is, Mr. Feng said that never to be a company that lived by advertisement. Currently, the ad business is still the core business of our company. How we see the potential of advertising business and other new business in the future? [Foreign language]
Dagang Feng (Co-Chairman and CEO)
赵灵一，那我现在问——赵灵一，我先回答第一个问题吧。
Lingyi Zhao (Retail Chief and eCommerce Analyst)
好的，好的。
Dagang Feng (Co-Chairman and CEO)
好，谢谢问题。感谢关注我们的报道。是这样，其实我自己是不太喜欢广告业务的，因为我自己做媒体行业时间太长了，然后我觉得这个广告业务有它的这个……
在规模上的局限性，所以这个虽然它有毛利的优势，我们几年以来一直在致力于提高我们的非广告业务的比重。当然我们从来没有放松过对广告业务的支持力度，我们一直都是——广告业务还在非常稳健的增长，我们预计在可预计的很多年里面，我们的广告业务还是会有比较高的，比如说30%至40%以上的这样的一个增长。但同时我们也寄了更多的希望给我们的新的企服产品和平台。我们也有时候会开玩笑说，我们要在企服平台，一定要在广告高速增长的情况下还要超过它，所以它要获得更高的增长，比如说100%以上的增长，所以这样才能达到我们的目标。从我们今天的实际情况来看，在过去一年，我们的可比口径下的广告业务大概占我们的收入的46.6%，我们的企服业务大概占我们的收入的47.2%。所以其实可以看到我们今天的企服业务已经超过了广告业务，并且去年应该也是超过的，所以我们希望在未来的时间里面，通过企服业务比广告业务更高的增长来获取这样更健康的公司的结构和更大的一个未来。谢谢。
Speaker 8
Thanks for following my interview. I would like to say, I'm not a very big fan of the advertising business, 'cause no matter from the revenue scale and the growth margin, they have the limitation there. Of course, from our advertising business perspective, we are confident that in the future, we have at least 30% or 40% growth in the future. I would like to say this, we would like to put more attention on our new business like Enterprise Service Review Platform.
Actually, in 2021, our advertising business and the value-added Enterprise Service accounted for 46.6% and 47.2% of the GTV respectively, which indicating a very healthy revenue mix. In the future, we'll continue to build our second growth curve, Enterprise Service, in the short term. We hope this revenue will be the important part of our future revenue. We believe that the growth driven by the Enterprise Service Review Platform, 36Kr, will continue upwards along the new curve. Thanks.
Lingyi Zhao (Retail Chief and eCommerce Analyst)
谢谢，谢谢大老师，谢谢翻译。我有第二个问题，刚才其实你也讲到了，企服行业是未来公司这个新的增长驱动力，而且增速也比较快。那作为这个企服行业的卖产人，我们三十六氪的差异化的优势在哪里？我翻译一下这个问题哈。As a tool provider in the enterprise service industry, what's the advantages of 36Kr enterprise service platform? Thank you.
Dagang Feng (Co-Chairman and CEO)
好，谢谢。其实我们在一年半以前开始做这个企服的点评产品的时候，我们已经分析过，这件事情可能需要的几种核心的能力。那么我现在来说一下36氪我认为相对于大厂来说具备的一些独特的东西。首先是我们的独立客观性。当然，这个今天市场中，有其他的大厂，比如说某某的云市场，这样的，其实他们早就存在了，但是他们发展得并不好。那我想很大程度上跟他们的缺乏第三方的独立客观性是有关的。而36氪是一个在行业中非常有公信力的这样的一个第三方的媒体品牌，然后它受到整个行业的认可，并且有非常好的客户资源，我想这个是我们的第一个优势。那第二个优势是我们在做这样的一个，服务于买卖双方的平台，需要有很强的服务能力和服务客户的意愿。我想这方面也许我们的，这也许是我们相对于大厂的另外一个优势。第三是关于这件事情，如果想要做成的话，我们认为说，因为企服行业看起来是一个行业，但它其实非常的复杂，光我们分类的第一级类目可能就要超过两百个类目，所以其实没有任何人能知道所有的信息。那我们认为说如何来组织信息和结构化的知识，这是一个非常重要的一个竞争点。而这方面36氪因为长期对内容的投入，所以我们这方面应该是有优势的。这是我们看到的三个点，希望能回答你的问题，谢谢。
Speaker 8
Thanks for your second question. 36Kr Enterprise Service Review Platform with three advantages. First I would like to say is the fairness and objectivity of our Enterprise Service Review Platform. As an independent platform, we especially value authoritative user reviews which cannot be biased by commercial purpose. Compared with other large internet companies with their own SaaS and cloud products, our Enterprise Service Review Platform can display user feedback on software applications sales impartially, enhancing decision-making efficiency for both the sellers and the buyers. The second one is about ability and the willingness to serve customers.
The third one, the last advantage is our complete product system. We originally saw the pain point for both seller and buyer in enterprise service market and started to build our presence earlier. Content such as software product library, user review library, key person database and knowledge maps constitute the Magic Quadrants in our enterprise service software selection platform. Hope my answer is enough for you. Thanks.
Chu‑Chen Wang (Investor Relations Manager)
Lingyi, do you have any further questions?
Lingyi Zhao (Retail Chief and eCommerce Analyst)
我的问题问完了，谢谢。
Chu‑Chen Wang (Investor Relations Manager)
好，谢谢 Lingyi。
Operator (participant)
As there are no further questions now, I would like to turn the call back over to the company for closing remarks.
Chu‑Chen Wang (Investor Relations Manager)
Thank you operator. Thank you again for joining us today. If you have any further questions, please feel free to contact 36Kr or investor relations through the contact information provided on our website or TPG Investor Relations. Thank you.
Operator (participant)
That does conclude our conference for today. Thank you for participating. You may all disconnect. Have a nice day.