Kuaishou Technology’s Earnings Call Highlights Growth and AI Success

Kuaishou Technology Class B ((HK:1024)) has held its Q2 earnings call. Read on for the main highlights of the call.

Kuaishou Technology’s recent earnings call conveyed a generally positive sentiment, reflecting strong revenue growth, record-breaking user engagement, and successful execution of its AI strategy. Despite the optimism, the company acknowledged increased R&D and administrative expenses, which slightly tempered the overall financial outlook. However, the decision to declare a special dividend and the long-term growth potential of AI investments contributed to an optimistic perspective.

Record-Breaking Daily Active Users

Kuaishou Technology reported a significant milestone in user engagement, with average daily active users (DAUs) on the Kuaishou App reaching a record high of 409 million in the second quarter. This achievement marks steady year-over-year growth and underscores the platform’s increasing popularity.

Revenue Growth

The company’s total revenue rose by 13.1% year-over-year to RMB 35 billion. This growth was primarily driven by advancements in online marketing services, live streaming, and e-commerce, showcasing the company’s robust business model and market adaptability.

Improved Profitability

Kuaishou Technology achieved a new high in quarterly profitability, with an adjusted net profit totaling RMB 5.6 billion and a 16% adjusted margin. This improvement highlights the company’s effective cost management and operational efficiency.

Special Dividend Declared

In a move reflecting confidence in its financial health, Kuaishou’s Board declared a special dividend of HKD 0.46 per share, amounting to HKD 2 billion in total. This decision underscores the company’s commitment to delivering shareholder value.

AI Strategy Success

The company’s AI segment, Kling AI, generated revenue exceeding RMB 250 million in the second quarter. This success demonstrates significant progress in AI-driven innovation and commercialization, positioning Kuaishou as a leader in AI technology.

E-commerce Growth

E-commerce gross merchandise volume (GMV) saw a substantial increase, rising by 17.6% year-over-year to RMB 358.9 billion. This growth was fueled by an increase in monthly average paying users and an enhanced user experience.

Increased R&D Expenses

Research and development expenses rose by 21.2% year-over-year, primarily due to increased investments in AI. This reflects the company’s strategic focus on innovation and long-term technological advancement.

Higher Administrative Expenses

Administrative expenses increased by 13.3% year-over-year, mainly attributed to higher employee benefit expenses. Despite this rise, the company remains committed to maintaining a competitive workforce.

Forward-Looking Guidance

Kuaishou Technology’s forward-looking guidance remains optimistic, with expectations of continued growth in key metrics. The company anticipates sustained user engagement and revenue growth, driven by advancements in AI and e-commerce. The special dividend declaration further signals confidence in its long-term growth prospects.

In summary, Kuaishou Technology’s earnings call painted a largely positive picture, highlighting record user engagement, robust revenue growth, and successful AI strategy execution. While increased expenses present challenges, the company’s strategic investments and special dividend declaration underscore its confidence in future growth and shareholder value.