BEIJING, August 25 (TMTPost)— Kuaishou Technology, the archrival of TikTok’s Chinese version Douyin, delivered stronger-than-expected performance even though  consumption recovery lost steam amid the continued sluggish macroeconomic environment in China.

Credit：Visual China

Kuaishou posted revenue of RMB27.74 billion with a year-over-year (YoY) increase of 27.9% in the quarter ended June 30, defying the analysts’ estimated RMB27.29 billion. The company recorded adjusted net profit of RMB2.69 billion that quarter, the first group-level quarterly profit under Non-IFRS measure since it went public in Hong Kong in April, 2021. The net profit was much better than the expectation of RMB180 million, compared with net loss of RMB3.18 billion a year earlier. Adjusted EBITDA, or Earnings Before Interest, Taxes, Depreciation, and Amortization, in the second quarter surged to RMB4.32 billion, with a shockingly 957.8% YoY increase. The quarterly rose 5.2 percentage points YoY to 50.2%, beating estimates of 47.2%.     

Kuaishou said its profitability milestone strongly validated effectiveness of its strategy of simultaneously expanding our user base and content ecosystem, deepening our monetization capabilities, and optimizing operating efficiency. The Chinese short-video giant attributed solid revenue growth to the growth of its online marketing services, live streaming and e-commerce business.The second quarter saw both average daily active users (DAUs) and monthly active users (MAUs) hit a record high, with 376 million and 673.3 million, representing YoY increases of 8.3% and 14.8%, respectively. 

Revenue from the online marketing services increased 30.4% to RMB14.3 billion in the June quarter, primarily due to stronger demand from e-commerce advertisers and the recovery of advertising market. As of late June, the number of active advertisers on Kuaishou platform almost doubled in year. Advertising services provided to our native e-commerce merchants maintained robust growth momentum and continued to outpace gross merchandise value (GMV) growth in the second quarter. External advertising services showed clear signs of recovery and quarter-over-quarter growth from industries such as e-commerce platform, information services, healthcare, as well as education and training. Kuaishou also continued to unlock the value of ecosystem for brand advertisers as revenue from brand advertising increased 30% YoY. 

Revenue from other services increased 21% YoY to RMB3.4 billion in the June quarter, reflecting a nearly 39% YoY increase in e-commerce GMV. On the supply side, Kuaishou focused on ten major industry zones, including apparel, 3C and other categories, and achieved high double-digit YoY growth in the number of newly onboarded business merchants that quarter. GMV from brands, including Kwai Brands, continued to increase quarter-over-quarter, accounting for over 30% of total e-commerce GMV that quarter. The number of newly added brands that quarter jumped 90% YoY thanks to targeted promotions to onboard more brands. On the demand side, the number of monthly active paying users surpassed 110 million in the second quarter, and their penetration rate to MAU continued to rise into the high teens. Kuaishou said the performance was primarily owing to a more refined approach of tiered user operation on our platform, as well as smart subsidies and product feature iterations to further expand high quality paying users’ consumption breadth and increase their stickiness.

Live streaming business generated RMB10 billion with a 7% YoY growth in the second quarter, mainly driven by enriched content supply, healthy and sustainable live streaming ecosystem and exploration of user needs. Kuaishou highlighted the differentiated policies to cater to talent agencies’ diverse operating models it introduced, which offer more incentives to new and small-sized talent agencies and empowering them to enhance their operations. During the quarter ended June, the number of talent agencies the company partnered with grew over 40% YoY, while the number of active streamers managed by agencies increased over 70%, reaching a record high in terms of percentage of our total active streamers. Kuaishou also made progress in “live streaming+” services empowering traditional industries. A benchmark case was Kwai Hire experienced a 290% YoY increase in average daily resume submissions during the second quarter, while the daily average number of users submitting resumes also more than doubled YoY.