Release Date: November 20, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Kuaishou Technology (KUASF, Financial) achieved a milestone of over 400 million daily active users (DAUs), with total revenue growing by 11.4% year-over-year to RMB 31.1 billion.
- Revenue from core commercial business, including online marketing services and e-commerce, increased by nearly 20% year-over-year.
- Adjusted net profit rose 24.4% year-over-year to RMB 3.9 billion, demonstrating improved profitability.
- The company unveiled Clean AI 1.5, setting new industry benchmarks for video quality, enhancing user engagement and content creation.
- Overseas revenue grew by 104.1% year-over-year, with significant progress in Brazil, indicating successful international expansion.
Negative Points
- Live streaming revenue declined by 3.9% year-over-year, indicating challenges in maintaining growth in this segment.
- Selling and marketing expenses increased by 15.9% year-over-year, impacting overall profitability.
- R&D expenses rose, driven by investments in AI large models, which may pressure short-term financials.
- The company faces challenges in new user acquisition as short video penetration rates continue to grow.
- Despite growth, the e-commerce business faces ongoing consumer demand challenges, impacting overall market presence.
Q & A Highlights
Q: Could management share the latest progress of the AI large language model, especially regarding Kling AI, and the direction of monetization going forward?
A: In Q3, we optimized our large models for content understanding, recommendation, and production. Kling AI 1.5 was introduced, supporting 1080p video and various generation capabilities. We launched a subscription membership and API services, with early commercialization meeting expectations. Monthly cash revenue exceeded RMB10 million, and we anticipate rapid revenue growth next year.
Q: How should we think about the trend and target for DAU and user time spend going forward? What measures does the company have in place to continue increasing overall traffic?
A: We achieved our medium-term DAU target of over 400 million by refining user growth strategies and optimizing content and algorithms. Future growth will focus on improving user retention and activity. Strategies include upgrading traffic distribution, enhancing social networking features, and producing exceptional vertical content to foster community engagement.
Q: How should we think about the sustainability of short-play contributions to online marketing services growth?
A: Short-play marketing spending grew over 300% year-over-year, driven by optimized user experience and smart subsidies. We are optimistic about its medium-term growth, with the market potentially exceeding RMB100 billion by 2027. Our rich short-play ecosystem and algorithm enhancements will sustain growth in this area.
Q: Could management share the overall performance during the Double 11 sales promotion and the company's new strategies?
A: We achieved strong year-over-year growth in e-commerce GMV during Double 11, setting a new record high. We provided significant subsidies and traffic support, acquiring over 70 million new e-commerce users. Strategies focused on content-based scenarios, live streaming, and shelf-based e-commerce, with a focus on high-quality products and user engagement.
Q: How does management evaluate the progress of the local services business, and what are the long-term growth prospects?
A: We have made steady progress in local services, focusing on high-quality content and value-for-money products. In Q3, daily active paying users rose by 28%, and GMV grew by 26% quarter-over-quarter. We aim for breakeven at the city level and see long-term investment potential with consistent ROI improvement.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
