Q1 2023 36Kr Holdings Inc. Earnings Call
Ladies and gentlemen, this is the conference operator. The conference will commence shortly. Please continue to hold thank you.
Hello ladies and gentlemen, thank you for sitting by 436KR Holdings Inc. first quarter 2023 earnings conference call. At this time all participants are in a listen only mode. For more information on the management's remarks there will be a question and answer section.
Today's conference call is being recorded. I'd now like to turn the conference over to your host, Xiaoqun Yuan, our manager of the company. Please go ahead, Xiaoqun.
Thank you very much. Hello everyone and welcome to 36KR Holding First Quarter 2023 Earnest Conference Call. The public financial and occupational results were released earlier today and have been made available online. You can also view the Earnest Press Leads by visiting the IR section on our website at ir.specifickr.com.
Participants on today's call will include our co-chairman and CEO Mr. Da Gongfeng and our CFO Ms. Lin Wei. Mr. Feng will start the call by providing an overview of the company and performance highlights of the quarter in Chinese, followed by an English interpretation.
Next we will then provide details on the public's financial results before on seeing the call for your questions. Before we continue, please note that today's discussion will contain forward-looking statements made under the Safe Harbor Commemorations of the U.S. Private Securities Litigation Reform Act of 1995.
For overlooking statements involving inherent risks and uncertainties. As such, the complex results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in the complex perspectives and 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 ethics or law. Please note that 35K-Rs earnings press release and this conference call include discussions of unaudited cash financial measures as well as unaudited non-cash financial measures. Please see the complete disclaimer at https://sites.google.com/+PID-MGN-DQ
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Thank you. Hello everyone. Thank you for joining our first quarter of the 2020 early talk.
As the pandemic's impact faded away, we are delighted to report stellar financial results, delivering double-digit revenue growth in the first quarter of 2023. Our total revenue reached R&D 55.5 million of 12% year-over-year, with expansive growth across all three of our primary business segments.
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For our segments, our advertising revenue is R&D $41.9 million of 11% year-over-year. Our enterprise value-added services delivers revenue of R&D $10.0 million of 7% year-over-year. And revenue from our subscription services jumps 36 year-over-year.
These achievements across the world are the direct results of our consistent efforts, forging ahead with content, products, and technologies, ushering in a new phase of high quality business growth.
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Let me start with content. As we expanded our content coverage to new industries, we also continued to direct more attention to leading enterprises and major inventors while stepping up our output of exclusive reports, offering users a holistic and insightful professional content experience.
The number of our blockbuster octopuses is on the right. In the first quarter, we had around 160 octopuses with PVs exceeding 100,000, many of which covered heated topics at less than 200,000 cases, including a dairy fishing company.
founder Bai Du, an article on TikTok's CEO shows the truth faced off with the US Congress and the peace covering the 24 hours after Silicon Valley Bank collapsed, initiating over 200,000 page views. These thought-provoking articles, among others, shook his 35th-day leading insight and industry influence.
Our enhanced content influence also contributed to significant growth in our user base. As of the end of the first quarter, we had more than 29 million followers of 22% year-over-year.
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Since the beginning of 2023, we have been closely following the latest developments in booming industries, including generative AI and large language models.
In response to current trends, we soon launched a new WeChat account, the Emergence Intelligence, to provide in-depth coverage on the AI areas' transformation across multiple industries. In the first quarter, we also rolled out Power On, a WeChat account focusing on the evolution of the auto industry, enabled by intellectualization and new energy.
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36KR has been on the frontlines covering the latest developments on-site through multiple channels, such as breaking news, photo galleries, and on-site video reports. The total examples from the first quarter include CES, MWC, and AWM.
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Specifically, we leveraged our first-hand perspective of the Shanghai Auto Export delivery comprehensive in-depth reports on the exhibition, as well as new car model comparisons, various auto enterprises from home and abroad, the differentiation between traditional vehicles and EVs, and a broad cohort of industry VIPs. We also took this opportunity to go out and upgrade.
to 36 KR's auto content matrix with our power on WeChat account, future auto daily WeChat account, and the WeChat video account titled 36 KR Auto. These channels not only deliver rich, insightful content to users, but also allows us to tap into the EV market's strong growth momentum and massive market potential, geographic information about timeframe, around the world, even below different levels of performance inch.
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I also want to highlight our short video business. In the first quarter of 2023, we built upon an outstanding content generating and production capabilities, driving a huge surge in user numbers. Our number of short video followers exceeded 8 million, a remarkable 42% year-over-year increase. 66KR became the first ever industry pioneer in using AI to create a new product.
store with AI robots, which features the key steps of a 36KS experimental opening of a Taobao store using AI technologies, including naming and establishing the store, product design, image generation, and copywriting.
The AI technology quickly improved efficiency while reducing cost of the store's operations. This original video was listed as hot and trendy by Billy Billy, Weibo, and Sock & Shoe and attracted over 35 million clicks and more than 80,000 likes.
It also triggers continued official follow-ups on this topic by Taobao. The organic combination of know-how expertise and AI technologies can diversify our granular generating channels and locking more value for our company.
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In addition, we have made major strides in long video content production and recently launched our first talk show for SING 2053. In the first season, I conducted in-depth interviews with industry employees.
including Ronglin Li, founder of Baiji, Shi Wang, founder of China Barcode, Xin Liang, co-founder of Xin.com Group, Xianglin Zhu, founder of Leet Motor, and Chen Yizhou, founder of Duodao, captivating audiences with fascinating insights into the future. For Scene 2033, we simultaneously livestreamed on YouTube, station video and television station on Honei-
and encourage synergies among our diverse formats, including long and short-form videos, as well as text, graphics, and audio mediums, unlocking our further growth potential.
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In highly specialized and innovative enterprises, popular deals and curated portfolios, the platform's key indicators are substantially increased, including matching frequency, number of active investors and new entrepreneurs, as well as platform traffic. In the first quarter of 2023, the 36 KR venture capital platform efficiently connected over 5,000.
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Before I move on to commercialization, let me briefly update you on our AI-GC initiatives. Over the years, Businesses Care has always paid close attention to the most advanced frontiers of tech development. AI-GC technologies involved leveraged its natural fit with content production and actively applied generative AI-X to our business.
integrating these technologies with our content ecosystem and product R&D. We focused on actively integrating AI checks into image generation, text translation, data collection, and other areas, as well as leveraging AI checks to open the Taobao store. As I just mentioned, for higher production efficiency, lower operations...
technology for smart, efficient customer service.
In summary, we fortified our content ecosystem accumulated product advantages
and equipped ourselves with AI techs during the quarter. These advances consistently boosted our commercialization capabilities and have enabled our steady revenue growth. Next, I'd like to share the details of our commercialization progress.
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In the first quarter of 2023, our total revenue increased by 12% year-over-year to R&D 55.5 million, and we achieved growth across all three of our primary business segments. Notably, our advertising revenue reached R&D 41.9 million of 11% year-over-year.
the number of advertising customers grew to 147 of 9% year-over-year, with Apple increasing to ID 285,000 of 2.3% year-over-year.
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and the digital market. Leveraging our deep understanding of customer-run positioning of target audiences. The 6KR offers one-stop marketing solutions centered on branding and advocacy. In the first quarter, ManyTechScience and Global 500 companies renewed their annual service contracts with us.
At the same time, we also expanded our customer base among small and medium-sized enterprises. On top of that, we received recognition from global giants such as Amazon, MECHA, and Tesla for the notable results they will achieve from improved brand communications based on our Fortune Glance Globalization Initiative camps.
For instance, for META, we invited experts in global business expansion to conduct speeches and interviews with companies to exchange ideas about brand globalization and connect Chinese companies with overseas platforms, bending both sides of bigger voice in brand communication. In addition, we ventured into new industries and joined hands with GREE, creating potential reversible and sustainable markets.
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Our short video business also delivered another quarter of stellar results. We launched an array of popular programs covering diverse topics including technology for innovation, business and...
to help them fully showcase and disseminate Snapchatting products while compelling communications, including behind-the-scenes stories and KOL marketing, boosting our contract size to another new record high.
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With respect to enterprise value added services, we experienced a rally in various businesses, including offline events and activities as the pandemic receded, driving revenue up 7% year-over-year to RMB 10.0 million during the first quarter. Also, to capitalize on the rise of AI large language models, we hosted the all-new WISE 2020
enhancing 36KR's industry influence and delivering positive commercialization results.
On the integrated marketing side, in the first quarter, we continue to expand our service content.
providing diversified offerings including agency service operations for both original WeChat accounts and original video platforms, as well as KOC businesses. These new features facilitated the continuous expansion of our customer base. We also entered into cooperation agreements with renowned companies including Jadhi and Huatai Securities.
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As for subscription services, we continue to optimize our membership system and subscription products, substantially increasing our revenue scale by 36% year-over-year. Pay particular attention to the optimization of the 36KR Business School actively developing
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I'd like to share an update on the 36KR Enterprise Services Review platform. In the first quarter of 2020, we continue to improve and optimize its product library, adding basic information such as product reference cases, pricing, and parameters. We also completed product mapping in nine core areas.
including SDRM, new retail and e-commerce, increasing our product classification accuracy to over 95%. Furthermore, while optimizing the platform's functions, we revamped the interfaces of both PC and mobile devices. By further improving the reading module and search function, we made the product more accessible and easier to use.
our platform's operational efficiency increased by over 10 times year over year.
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In short, our ongoing product function enhancements have comprehensively improved the convenience, efficiency and intelligence level of the 36KR Enterprise Services Review Platform.
reflected by rapid growth in its operating matrix across the board. As of the first quarter of 2023, the cumulative number of reviews exceeded 60,000 of 198% year-over-year. The cumulative number of products on the platform reached nearly 9,000 of 55% year-over-year.
and the number of merchants on the platform topped 1,200 WYO. In terms of commercialization, this quarter we implemented our next iteration of commercialization for the CSCI KRI Enterprise Services Review platform, building upon the existing offerings of brand promotion and content marketing.
We reinforced our integrated service capabilities and successfully built an all-new business model featuring lead generation and commission-based services, further empowering enterprise customer acquisition and decision-making support. Our new profit-generating model has began to bear fruit.
as we have received payments from 12 SaaS enterprises. Going forward, we will further enhance the platform service capabilities and provide enterprise customers with more secure, efficient services, transforming corporate decision-making by enhancing corporate digital awareness and realizing smartification of the decision-making process.
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As we embark on our new journey in 2023, we are excited to welcome a new era of growth and development. The latest wave of AI large language models and rapid development of next generation innovative technologies provide us with significant capital for growth in the new economy sector.
As a business survey platform, coaching visionary insights, 3.6 KR will directly benefit from this historic opportunity and deliver disruptive growth across our three core business segments in content, product, and commercialization. As a prominent brand and a pioneering platform dedicated to serving new economy.
This will also take into new opportunities to advance and apply innovative technologies such as ARGC, Drive Web Negroes in his network profitability, thereby generating long-term sustainable value shareholders, customers, and society as a whole.
worldwide stated. Total RAM news were 55.5 million in a first quarter of 2023, an increase of 12% compared to 49.6 million in the same period of last year. Online advertising services ran in revenue, increased 11% year over year to 41.9 million in a first quarter of 2023. The increase was primarily achievable to more innovative marketing solutions as well as
present year over year to 3.6 million in the first quarter of 2023. The increase was primary edge notable to our continuous efforts in high quality subsequent models to our subscribers. Council revenues was 32.4 million in the first quarter of 2023, compared to 23.9 million in the same period of last year.
of 2023 compared to 52% in the same period of last year. The decrease was primarily actual vote to the resumption of offline events and offline training courses in this quarter, which occurred higher for human costs, as well as the cost of some new content reproduced in quarter, such as video program for seeing 2033 and so on.
We believe this is more of a wonder of scenario and weak spec growth profit margin to rebound back to the 50% range at commercialization of the new content kick-themed and revenue continue to grow in the coming quarter. Operating Census was 63.6 million in the first quarter of 2023 compared to 33.4 million in the same period of last year.
Bill's marketing expenses was 31 million in the first quarter of 2023, compared to 29.7 million in the interior of last year. The increase was primarily attributable to the increase in payroll related expenses, especially offside by the decrease in marketing related expenses.
DNA transits was 17.2 million in the first quarter of 2023, compared to negative 10 million in the same period of last year. Reflectoration was primarily actually about to release a lot of a credit losses of 32.9 million in the same period of last year.
which was mainly due to the cash collection from account receivables fully-impared in previous year. It's including such financial atoms impact. Our GNX Census actually went down by approximately 25% year over year. Thanks to various cost control measures we drove out. Research and development Census were 15.5 million in the first quarter of 2020.
1.9 million in the first quarter of 2023 compared to 4.1 million in the same period of last year.
Other income was 1.2 million in the first quarter of 2023 compared to 40.3 million in the same period of last year. The decrease was primary because the company right-knies approximately 308 million of gain arising from disposal of a subsidiary in the same period of last year. Nine loss was 9 million in the first quarter of 2023 compared to net income of
1.4 million in the first quarter of 2023, compared to not-ecom-achvable to 36-PRs honorary shareholders of 33 million in the same period of last year.
Basic and diluted NALOS per ADS, both 92 cents in a first quarter of 2023, compared to net income per ADS of 80 cents in the same period of last year.
As of March 31, 2023, the company had cash, cash equivalents, restricted cash, and short-term investments of 170 million compared to 185 million as of December 31, 2022. The decrease was mainly actual vote to the payments of year-end employee bonuses and benefits, as well as small-sized investments were made.
in the new economy start-up company in the first quarter of 2023. This concludes all of our prepared remarks today. We will now open the call to questions. Operator, please go ahead. Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for a name to be announced. If you wish to cancel your request, please press star 2. 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 questions to management in Chinese Please immediately repeat your question in English The first question comes from Jing Tang from CICC. Please go ahead.
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The symptoms were taken by questions. I have two questions. The first is how is a typing business recovery in the second quarter and the sixth one, eight, a commerce festival. What is the outlook for the recovery of advertising market in the companies of the typing business? In my second question is
what are the plans to further develop the growth potential of short-video business, giving us strong growth in the past. And we also launched long-video content and how do you consider the exploration of diversified content formats? Thank you.
potential of short video business, given the strong growth in the past. And we also launched long video content and how do you consider the exploration of diversified content formats? Thank you.
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In the first quarter, we were delighted to see that our advertising business was on the road to recovery. We were really increasing by 11 percent year-over-year.
delivering growth in both number of customers and our pool. As the market began to pick up, the demand for advertising was actually increased. Moreover, our advertising solutions centered on branding and efficacy earned us the continuous trust and support of our customers. And we did a steady growth business growth. This year's advertising business was the 618 Grand Promotion Series.
Better than two-hacken, two thousand and ten thousand two. For example, e-commerce joint including towel and JD.com, please add rotation on our platform. A 6-1-8-gram promotion advertising is mainly TMB around it. Some advertisers prefer to utilize platforms with more havelics, Raw specific calories products and stomach black.
brand marketing platform. It's a successful eight channel for the development that we economy now runs the third in our advertising industry. We remain cautiously optimistic about the broader advertising in the second quarter in four year 20th, 23th. The post pandemic recovery was not as rapid as expected.
and is more time to observe. But for the statistics they are as part of the new economy sector, they are uniquely positioned to benefit from our advantages in this market environment. For instance, we observed that it grows in demand from FMCG, VC companies, and Chinese enterprises expanding overseas. We will provide more appealing, differentiated, advertising products and services
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Thank you. You lost the series of original short videos that cover diverse topic including technological innovation, business insight and lifestyle.
with the goal of fully engaging our users. By the end of the first quarter, we had over 8 million short video followers. At the same time, we kept launching innovative offerings. Recently, we launched our long video program for CIN 2033, a show featuring in-depth interviews with industry tycoons.
This was a milestone for us in building a brand new full coverage content dissemination network with long video platforms and TV programs. Regarding our commercial cooperation agreements for creative brand marketing, our work was recognized by high-profile customers from various sectors such as Qualcomm, Hewlett-Packard, Huawei, Intel, and China TV. The success of our pro...
36KR applies AIGC technology, such as text generation from growth, growth generation from text and access, which greatly promotes the enrichment of the contact and interest. As platform empowers the new economy, 36KR will directly benefit from this technological advancement.
We will explore diversified revenue generation channels while exploring content ecosystems.
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Thank you. Your next question comes from Ling Yin Zhao from SWS Research. Please go ahead.
Section 36, First phosphorus Gp-modgin-dep freaked situanti Un pardoned that the changes in margin this quarter and could you share some also of long-term changes?
In qy margin. Thank youthank you. That's a really good question. This is lenn. I will address this question. I think there are several reasons result in the growross margin fluctuation. First of all, as you know, as the pandemic we see this we.
to the year ago there will be more offline costs. And secondly, as we introduced in our prepared remarks, we also produced some new content columns, mainly for seeing 2033, the video program, as well as the new EV content metrics such as power on, et cetera. So those content production also occurred costs.
where the costs are mostly right-knies immediately in this quarter rather than amortized over the year. So I think as we graduate the commercialization of these new countien cake in, the growth margin will definitely come back. And there is another reason too. The third reason is...
Q1 usually is our lowest disease in the 90s during the year. So if you look at our previous year, Q1 to Q4, our revenue will consactivate go up. So, you know, as the coming quarters in the year, as our commercialization takes in, I think the growth margin will come back to the 50%.
I think more long term with our new initiatives like the long-form video as well as our certificate care enterprise review platform, et cetera, I think that growth margin will continue to improve in the long term.
So to sum up, I think the Q1 growth matter is really a one-off scenario rather than recurring growth matter level in the coming quarter-w, we'll be bound back.
I think this helps to answer your question, and thank you. Thank you. Your next question comes from Brayean from Seal In Securities. Please go ahead.
Con a on how I M going to go a you want and are to P our work. When end that I to that? This Fort to may go in counc with anything for both institutions. So who they go out? justain myself. What measures are we takeken to enhance customer thickness?
customer engagement, we mainly have two, have three major scenarios rolled out to address us. First of all, our content is our major competence. We continue to expand our service content in between our in-depth coverage of top players and advancing the breadth of exclusive reports.
Our distinct content covers extensive areas, including AI and hardcore technologies, as well as highly specialized and innovative enterprises, those small and medium enterprises, health care and new energies. So with the content category can continue to expand our customer base, we will naturally expand as well.
That's number one. And number two, on the product site, we are really very proactive on the production site. For example, our short film video, as well as our newly launched long film, it has become a key component of our product metrics. So those metrics have helped up to not only
grow our advertising customer portfolio, but also our enterprise adjo-added services client pool. So actually, our enterprise added services side, we not only have IP to event like Y, A, G, C, conferences, things like that, but also we have intake rate marketing as well as
Some others, new initiatives, including our business school project. We launched some individually high pool training courses and programs in the foot quarter. If you look at our individual subscriptions pool level, that has increased significantly to close to 100.
geographic expansion. We now not only have headquarters in Beijing, but also headquarters in South China, namely Shenzhen. And on top of that, we have 12 regional offices in all major cities in China, like Hangzhou, Chongqing, Hefei, Qingdao, and Jiangsu and those areas. So we are actively penetrating into
So that's the three major solutions we are looking at our grow our customer base as well as customer engagement. Thank you for your question again, Enre. Thank you. Your next question comes from PayPay Tree from Industrial Securities.
I will translate a question. Could you give us more detail about your strategy or plan of using AI? And are you already using any large model in daily content?
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to fit the existing TRI and XIRG technology supported by the emergence of intelligent, relaunched, and crucial models. We are benefiting various ways by simultaneously bringing AIG technology with a variety of wireless business errors. AIG tests enhance the efficiency of our company production while they were called for close growth, for instance, as we integrated AIG-C-Fs. The NISE test box will be accepted.
It's AI-type virtual storming is in operation now and the AI design products are waiting for them. These are convincing detectments, solutions, allow our AI-tax sensitivity and foresight. I will use no video. I open the top of store with AI robots, which features the key steps of the sensitive care experiment for opening a virtual storm using AI-tax.
including naming and establishing the store and product design, image generation and copyrighting. This original video also triggered an extremely official follow-up on this topic by Talbot. The organic combination of know-how expertise and AI techs that were tried are remunerating channels.
The last language models have been the most disruptive technology for revelation in recent years, and in the future the most extensive industrial innovation ever since mobile internet. It's brought new opportunities and growth momentum to the new economy sector. As a prominent brand, and a primary impact from dedicated to civil new experts.
Thank you. Your next question comes from Shao Kang Chen from Global Securities. Please go ahead.
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Going into 2023, we were able to review how still offline events and activities as before. In some of the forums and fireside chats.
A testing point has recently launched all new summit artis, the WI-2023 AIGT summit. As COVID-19 phase away, we managed to optimize our big schoolhouse design and screening programs to optimize the offline big school concepts of our pool of individual subscription services to increase the potential rate to R&B by 150,000.
Okay, thank you all for participating in today's call. If you have any further questions, please feel free to contact our Imm after Relations team. Thank you again.
participating in today's call. If you have any further questions, please feel free to contact our Imm after Relations team. Thank you again.
This concludes this conference. Today, you may not disconnect your line. Thank you. We?? your Israeli People's Health Henripsis Program Series. So please, thank you. I
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