Kuaishou Technology Class B ((HK:1024)) has held its Q4 earnings call. Read on for the main highlights of the call.
Kuaishou Technology’s recent earnings call revealed a generally positive sentiment, highlighting strong growth in revenue and adjusted net profit, alongside significant advancements in AI and e-commerce. However, the company faces challenges with declining live streaming revenue and increased expenses impacting profit margins.
Strong Revenue Growth
Kuaishou Technology reported a robust increase in total revenue for the full year 2024, rising by 11.8% year-over-year to RMB126.9 billion. The fourth quarter alone saw an 8.7% year-over-year growth, reaching RMB35.4 billion. This growth underscores the company’s solid performance in the face of market challenges.
Record Adjusted Net Profit
The company achieved a remarkable 72.5% year-over-year increase in adjusted net profit for 2024, totaling RMB17.7 billion. This impressive growth resulted in an adjusted net margin of 14%, reflecting Kuaishou’s effective cost management and revenue generation strategies.
AI Technology Advancements
Kuaishou’s Kling AI, launched in June, has quickly become one of the top two large video models globally. Since its monetization, it has generated cumulative revenue exceeding RMB100 million, showcasing the company’s innovative edge and technological prowess.
E-commerce and Marketing Growth
The e-commerce sector saw a 14.4% year-over-year growth in GMV during Q4, while online marketing services revenue increased by 13.3% to RMB20.6 billion. These figures highlight Kuaishou’s successful expansion in digital commerce and marketing.
International Expansion Success
Kuaishou’s international ventures have paid off, with overseas revenue growing by 52.9% year-over-year in Q4. The online marketing revenue in these markets surged by 83.5%, indicating strong global demand for Kuaishou’s offerings.
Live Streaming Revenue Decline
Despite overall growth, Kuaishou faced a 5.1% year-over-year decline in live streaming revenue for 2024, with a 2% drop in Q4. This decline poses a challenge as the company seeks to balance its diverse revenue streams.
Increased Expenses Impacting Margins
The company’s selling and marketing expenses rose by 11% year-over-year in Q4, while R&D expenses increased by 4.7%. These rising costs have put pressure on profit margins, necessitating strategic adjustments moving forward.
Forward-Looking Guidance
Looking ahead, Kuaishou’s management remains optimistic, with plans to further invest in AI advancements. Despite the anticipated impact on adjusted net margins by 1% to 2% in 2025, the company aims to maintain a focus on profitability and sustainable growth. The significant role of AI, particularly through the Kling AI platform, is expected to continue driving results.
In conclusion, Kuaishou Technology’s earnings call reflected a positive outlook with strong revenue and profit growth, driven by advancements in AI and e-commerce. However, challenges such as declining live streaming revenue and increased expenses require careful management. The company’s forward-looking strategies emphasize continued investment in AI and a commitment to sustainable growth.