Financial Report is Out | KUAISHOU-W Achieves Overall Profitability for the First Time, All Business Maintains High-Speed Growth

On Monday, May 22, KUAISHOU-W released its Q1 2023 financial report.

In Q1, KUAISHOU-W's revenue was RMB 25.2 billion, a YoY increase of 19.7%, mainly due to the growth of online marketing services, live streaming, and e-commerce businesses. Adjusted net profit was RMB 420 million, compared to a loss of RMB 3.7 billion in the same period last year.

KUAISHOU-W stated that its domestic business achieved operating profit for the fourth consecutive quarter, while the operating loss of its overseas division also narrowed by 45.1% QoQ, resulting in a positive adjusted net profit for the group in Q1 2023.

Q1 Operating Data

In Q1, KUAISHOU-W's user base reached a new record.

KUAISHOU-W's average daily active users and monthly active users increased by 8.3% and 9.4% YoY to 374 million and 654 million, respectively.

The average daily usage time per active user of KUAISHOU-W's app reached 126.8 minutes, and the total number of views of short videos and live streaming content increased by over 10% YoY, with the growth rate of total views exceeding that of total user time.

As of the end of Q1 2023, the cumulative number of mutual users of KUAISHOU-W's app reached 29.6 billion, a YoY increase of 57.6%.

In Q1, KUAISHOU-W's monthly average users for search exceeded 420 million, and the peak daily search volume on the platform exceeded 650 million.

The average monthly paying users increased by 6.4% YoY to 60.1 million, and the average revenue per paying user increased by double digits YoY.

Q1 Financial Data

In Q1, KUAISHOU-W's revenue increased by 19.7% from RMB 21.1 billion in the same period last year to RMB 25.2 billion, mainly due to the growth of online marketing services, live streaming, and e-commerce businesses.

Gross profit increased by 33.4% from RMB 8.8 billion in the same period last year to RMB 11.7 billion in Q1 2023.

Gross profit margin increased from 41.7% in the same period last year to 46.4% in Q1 2023.

Sales and marketing expenses decreased by 8.1% from RMB 9.5 billion in the same period last year to RMB 8.7 billion in Q1 2023.

Research and development expenses decreased by 17.1% from RMB 3.5 billion in the same period last year to RMB 2.9 billion in Q1 2023, mainly due to a decrease in employee benefits expenses (including related share-based compensation expenses).

In Q1, KUAISHOU-W recorded an operating loss of RMB 700 million, with an operating profit margin of -2.8%, compared to an operating loss of RMB 5.6 billion and an operating profit margin of -26.8% in the same period last year. 2023 and the first quarter of 2022 recorded pre-tax losses of 60.1 million yuan and 5.7 billion yuan, respectively.

The losses for the first quarter of 2023 and 2022 were 876 million yuan and 6.3 billion yuan, respectively.

In the first quarter, the adjusted net profit was 42 million yuan, compared to a loss of 3.7 billion yuan in the same period last year.

First Quarter Business Data

In the first quarter, online marketing service revenue increased by 15.1% year-on-year to about 13.1 billion yuan, accounting for 51.8% of total revenue.

In the first quarter, live broadcast revenue increased by 18.8% year-on-year to 9.3 billion yuan, thanks to the year-on-year growth of average monthly paying users and average monthly paying user income.

Other service revenue increased by 51.3% from 1.9 billion yuan in the same period last year to 2.8 billion yuan in the first quarter of 2023, mainly due to the growth of e-commerce business.

In the first quarter, the total transaction volume of e-commerce goods increased by 28.4% year-on-year to 224.8 billion yuan.

Overseas business revenue accelerated in the first quarter of 2023, reaching 338 million yuan, an increase of more than 6 times year-on-year, thanks to the strong expansion of live broadcast and online marketing services.

In the first quarter, the domestic division recorded an operating profit of 963 million yuan, while in the same period in 2022, it recorded an operating loss of 1.5 billion yuan.

The operating losses of the overseas division were 823 million yuan and 1.8 billion yuan, respectively, mainly due to the rapid growth of overseas revenue and more effective control of marketing expenses.