Kuaishou Technology (HKEX: 1024; RMB Counter: 81024) Q1 2025 Earnings Call | 05/27/2025

7 days ago

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Kuaishou Technology's Q1 2025 Financial Performance and Strategic Advancements

Kuaishou Technology reported a solid financial performance for the first quarter of 2025, demonstrating growth despite a complex global macroeconomic environment. The company's strategy of deeply integrating AI technology across its various businesses has been a significant driver, strengthening both its content and business ecosystems.

Key Financial and Operational Highlights:

Total Revenue saw a 10.9% year-over-year increase, reaching RMB 32.6 billion.
Adjusted Net Profit was RMB 4.6 billion, with an impressive 14% adjusted net margin.
Gross Profit grew by 10.4% year-on-year to RMB 17.8 billion, with a GP margin of 54.6%.
Average Daily Active Users (DAUs) on the Kuaishou app hit a record high of 408 million, marking the third consecutive quarter exceeding 400 million. Monthly Active Users (MAUs) reached 712 million.
Average daily time spent per DAU on the app was 133.8 minutes, contributing to a 5.9% year-on-year increase in total user time spent.
Overseas Business achieved operational profitability for the first time in Q1, with revenue rising 32.7% to RMB 1.32 billion, driven by effective cost control and targeted promotions.

AI-Powered Business Transformation:

A central theme of Kuaishou's strategy is the continuous integration and commercialization of AI technology.

CleanAI, Kuaishou's advanced video generation model, generated over RMB 150 million in revenue in Q1. The launch of CleanAI 2.0 Master Edition in April set new global benchmarks in motion quality and visual aesthetics, enhancing creative capabilities for professional users. This technology is being commercialized through paid prosumer subscriptions (accounting for nearly 70% of CleanAI's revenue) and API services for corporate clients across various industries.
AI's impact on Online Marketing Services is significant. The full application of AI in marketing solutions, including AIGC (AI-Generated Content) marketing material production and smart placement tools like UAX, has boosted clients' marketing conversion efficiency. Average daily advertising spending on AIGC marketing materials reached RMB 30 million.
In E-commerce, AI is leveraged for content production, precise user-product matching, and intelligent customer service. AI-generated live streaming highlights, for example, saw a 300% increase in average daily GMV. Intelligent customer service resolution rates reached 80%, reducing merchant costs and improving user experience.

Segment-Specific Performance:

Online Marketing Services Revenue grew by 8% year-on-year to RMB 18 billion. The content consumption industry, particularly short plays, saw strong year-on-year growth, as did the local service sector, with marketing spending jumping over 50% year-on-year.
E-commerce GMV increased by 15.4% year-on-year to RMB 332.3 billion. The company supported small and medium-sized merchants and KOLs (Key Opinion Leaders) with various initiatives, leading to a 30% year-on-year rise in newly onboarded merchants. The "pen-shelf-based" e-commerce segment, which combines live streaming, shopping mall, and short video features, continues to outperform, accounting for approximately 30% of total e-commerce GMV.
Live Streaming Revenue returned to positive growth, increasing 14.4% year-on-year to RMB 9.8 billion. This growth was propelled by a focus on diverse top-tier content and efforts to build a healthy ecosystem, including collaborations with talent agencies and development of premium content. The "live streaming plus" strategy also continued to empower traditional industries like recruitment and housing.

Future Outlook and Strategy:

Kuaishou remains committed to its user-centric approach and leveraging AI technology to fortify its content and business ecosystems. The company is confident that its focus on long-term technology investment and delivering real user value will enable it to navigate short-term market cycles, drive consistent business development, and create long-term value for shareholders. They anticipate the impact of AI investment, including CleanAI, on the group's overall profit margin for the full year 2025 to be in the range of 1% to 2%.

About this video

Kuaishou Technology reported its Q1 2025 results on May 27, 2025, achieving total revenue of RMB32.6 billion, a 10.9% year-over-year increase, driven by robust growth in online marketing services, live streaming, and e-commerce. The company’s average Daily Active Users (DAUs) on the Kuaishou App reached a record 408 million, up 3.6% year-over-year, while Monthly Active Users (MAUs) grew 2.1% to 711.7 million, reflecting sustained user engagement and platform vitality. Gross profit for the quarter rose to RMB17.8 billion, with a gross margin of 54.6%, slightly down from 54.8% in the prior year, reflecting continued operational efficiency despite increased investment in AI technologies. Net profit for the period was RMB4.0 billion, compared to RMB4.1 billion in Q1 2024, while adjusted net profit improved to RMB4.6 billion, representing a 14.0% adjusted net margin. Adjusted EBITDA climbed 7.6% to RMB6.4 billion, and the company maintained a strong cash position with RMB94.0 billion in total available funds as of March 31, 2025. Segment-wise, online marketing services contributed 55.1% of total revenue, live streaming accounted for 30.1%, and other services made up the remaining 14.8%. E-commerce gross merchandise value (GMV) surged 15.4% year-over-year to RMB332.3 billion, underscoring Kuaishou’s growing influence in the digital commerce space. Overseas operations posted a milestone, reporting an operating profit of RMB28 million, compared to a loss in the prior year, and overseas revenue jumped 32.7% to RMB1.32 billion, highlighting successful international expansion. Kuaishou’s Kling AI 2.0, launched in April, generated over RMB150 million in revenue during the quarter, with nearly 70% of Kling AI’s revenue coming from paid subscriptions by video creators and marketing professionals. Management emphasized ongoing investments in AI to enhance content understanding, operational efficiency, and user experience, while cautioning that rising R&D and administrative expenses—up 79.2% year-over-year—may impact short-term profitability. The company also repurchased approximately 29.2 million shares for HKD1.4 billion during the quarter, reflecting confidence in its long-term growth prospects. Outlook: Continued focus on AI-driven innovation, user engagement, and international expansion to drive sustainable growth. Management expects ongoing investment in technology and content to support long-term value creation, despite short-term margin pressures. About Inside Ticker: For more expert analysis and real-time updates on Kuaishou Technology (HKEX: 1024; RMB Counter: 81024) and other market movers, follow Inside Ticker and visit InsideTicker.com for in-depth reports, financial insights, and the latest news on leading companies. #Kuaishou #1024 #EarningsCall #Q12025 #SocialMedia #AI #LiveStreaming #Ecommerce #UserGrowth #FinancialResults #StockMarket #InsideTicker

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AI-Powered Financial Analysis This analysis uses real-time market data. While we strive for accuracy, always verify important financial information and consult with qualified financial professionals before making investment decisions. Past performance does not guarantee future results.