Financial Data and Key Metrics Changes - Total revenue for 2022 increased by 16.2% to RMB94.18 billion, with Q4 2022 revenue rising 15.8% year-over-year to RMB28.3 billion [10][54][67] - Adjusted EBITDA turned positive at RMB1.81 billion for 2022, compared to a negative RMB12.95 billion in 2021 [68] - Gross profit margin expanded by 2.7 percentage points year-over-year to 44.7% in 2022 [67] Business Line Data and Key Metrics Changes - Online marketing services revenue reached RMB49.04 billion in 2022, up 14.9% year-over-year, while live streaming revenue increased by 14.2% to RMB35.39 billion [67] - E-commerce GMV for Q4 2022 was RMB312.4 billion, up 30% year-over-year, with full-year GMV reaching RMB901.2 billion, a 32.5% increase [56][67] - Live streaming revenue in Q4 2022 reached RMB10.03 billion, up 13.7% year-over-year [42][57] Market Data and Key Metrics Changes - Average Daily Active Users (DAUs) on Kuaishou App hit a record high of 366.2 million, representing a year-over-year increase of 13.3% [12] - Monthly active e-commerce paying users increased year-over-year, with a high double-digit penetration rate [40] - The number of brands with sales above RMB100 million increased by over 50% year-over-year in Q4 2022 [36] Company Strategy and Development Direction - The company aims to enhance its monetization capabilities and improve operational efficiency while focusing on building a trust-based ecosystem [50][69] - Kuaishou is prioritizing the governance of its e-commerce ecosystem and enhancing user rights and interests protection [77][78] - The strategy includes promoting brand e-commerce and leveraging high-quality KOL resources to assist with product distribution [80] Management Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the advertising market recovery in 2023, expecting a noticeable rebound in the second half of the year [87] - The company plans to continue improving customer acquisition efficiency and user retention through refined strategies and high-quality content offerings [102] - Kuaishou is confident in its e-commerce business growth outpacing the industry, driven by enhanced user shopping mentality and optimized shopping experiences [84] Other Important Information - The company reported a significant narrowing of its operating loss to RMB1.2 billion in Q4 2022, improving from RMB5.8 billion in the prior year [63] - Cash and cash equivalents stood at RMB44.7 billion as of December 31, 2022, indicating a healthy balance sheet [66] Q&A Session Summary Question: Trends in live streaming e-commerce business and competition response - Management noted that e-commerce GMV achieved healthy growth during the Chinese New Year, with strong sales in various product categories [72][73] - Emphasis was placed on building strengths in the e-commerce business rather than engaging in price wars [76] Question: Advertising customers' sentiment and revenue growth outlook - Management indicated that advertisers are cautiously optimistic about 2023, expecting a rebound in the online marketing services market in the second half of the year [87][88] Question: User growth targets and cost trends - Management highlighted robust year-over-year growth in DAUs and plans to achieve steady user growth while controlling acquisition costs [102][103] Question: Progress on new business segments like local services and Kwai Hire - Management shared that local services have significant growth potential, with a focus on enhancing user consumption mindset through online channels [108] - Kwai Hire has seen rapid progress, with average daily resume submissions doubling in Q4 2022 [114]

Financial Data and Key Metrics Changes - Total revenue for 2022 increased by 16.2% to RMB94.18 billion, with Q4 2022 revenue rising 15.8% year-over-year to RMB28.3 billion [6][34] - Adjusted EBITDA turned positive at RMB1.81 billion for 2022, compared to a negative RMB12.95 billion in 2021 [43] - Operating loss narrowed to RMB1.2 billion in Q4 2022, improving from RMB5.8 billion in Q4 2021 [41] Business Line Data and Key Metrics Changes - Online marketing services revenue increased by 14% year-over-year to RMB15.09 billion in Q4 2022, accounting for 53.4% of total revenue [12][35] - E-commerce GMV reached RMB312.4 billion in Q4 2022, up 30% year-over-year, with full-year GMV surpassing RMB901.2 billion [16][37] - Live streaming revenue reached RMB10.03 billion in Q4 2022, up 13.7% year-over-year [26][37] Market Data and Key Metrics Changes - Average Daily Active Users (DAUs) on Kuaishou App hit a record high of 366.2 million, representing a year-over-year increase of 13.3% [7][8] - Average daily time spent per DAU increased by 12.6% year-over-year to 133.9 minutes [8] - Monthly active e-commerce paying users increased year-over-year, with a high double-digit penetration rate [24] Company Strategy and Development Direction - The company aims to enhance its monetization capabilities and improve operational efficiency while focusing on building a trust-based ecosystem [43][31] - Kuaishou is committed to refining its user acquisition strategies and enhancing content quality to drive user growth [65][66] - The company plans to promote brand e-commerce and strengthen its advertising capabilities through improved algorithms and data management [59][60] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the advertising market recovery in the second half of 2023, driven by economic recovery and increased advertiser budgets [55] - The company anticipates continued growth in its e-commerce business, leveraging high-quality content and user trust [52] - Management highlighted the importance of enhancing product quality and operational efficiency to respond to competitive pressures in the e-commerce sector [47][48] Other Important Information - The company reported a significant increase in the number of mutual followers on the Kuaishou App, reaching 26.7 billion, up 63.4% year-over-year [9] - Kuaishou's balance sheet remained healthy with cash and cash equivalents totaling RMB44.7 billion as of December 31, 2022 [42] Q&A Session Summary Question: Trends in live streaming e-commerce business and competition response - Management noted strong growth in e-commerce GMV during the Chinese New Year and subsequent shopping festivals, emphasizing the importance of trust in the platform [45][46] Question: Advertising customer sentiment and revenue growth outlook - Management indicated that advertisers are cautiously optimistic for 2023, expecting a rebound in the online marketing services market in the latter half of the year [54][55] Question: User growth targets and cost trends - Management outlined a threefold strategy for user growth, focusing on improving acquisition efficiency, enhancing content quality, and targeting underpenetrated demographics [63][65] Question: Progress on new business segments like local services and Kwai Hire - Management highlighted the potential for local services and reported rapid progress in Kwai Hire, with significant increases in job postings and resume submissions [67][71] Question: Impact of AI technologies on the online retail industry - Management discussed Kuaishou's advancements in generative AI and its potential applications in content generation and user engagement [74][76]

User Growth and Engagement - Monthly active buyers increased year-on-year and quarter-on-quarter in Q4 2022, with penetration reaching double digits, and monthly purchase frequency and average order value also increased year-on-year and quarter-on-quarter[14] - Overseas daily active users' average daily usage time increased to over 65 minutes, and the loss amount narrowed further[16] - The daily resume submission volume for the KuaiZhao (快聘) business more than doubled in Q4 2022 compared to Q1 2022[15] - Daily Active Users (DAU) refers to the number of unique user accounts that access the application at least once a day, excluding fraudulent accounts[127] - Monthly Active Users (MAU) refers to the number of unique user accounts that access the application at least once a calendar month, excluding fraudulent accounts[129] - Monthly Paying Users refers to the number of user accounts that purchase specific services at least once a month[129] - Paying Users refers to user accounts that purchase specific services at least once during a specific period[129] - Repeat Purchase Rate refers to the percentage of users who make a purchase in a specific month and make another purchase in the following month[129] Live Streaming Performance - Live streaming revenue reached RMB 10 billion in Q4 2022, a record high, with a year-on-year increase of 13.7%, and the average monthly paying users for live streaming increased by 20.4% to 58.4 million[15] - Public domain live streaming revenue increased by over 150% year-on-year in Q4 2022[15] - Live streaming revenue grew by 14.2% from RMB 31.0 billion in 2021 to RMB 35.4 billion in 2022, with average monthly paying users increasing by 19.4%[24] - Live streaming revenue increased by 12.2% from RMB 8.9 billion in Q3 2022 to RMB 10.0 billion in Q4 2022, due to enriched content supply and optimized algorithms[61] Overseas Market Performance - Overseas market revenue scale is rapidly climbing, with live streaming penetration gradually increasing and revenue continuing to grow through refined operations and rich operational activities[17] - Overseas operating loss decreased from RMB 2.4 billion in Q4 2021 to RMB 1.5 billion in Q4 2022, driven by rapid overseas revenue growth and improved marketing efficiency[54] - Overseas operating loss decreased from RMB 1.7 billion in Q3 2022 to RMB 1.5 billion in Q4 2022, due to rapid overseas revenue growth and improved marketing efficiency[70] Revenue and Profitability - Revenue increased by 16.2% from RMB 81.1 billion in 2021 to RMB 94.2 billion in 2022, mainly due to the growth of online marketing services, live streaming, and e-commerce businesses[22] - Gross profit margin improved from 42.0% in 2021 to 44.7% in 2022, with sales and marketing expenses decreasing from 54.5% to 39.4% of total revenue[21] - Adjusted EBITDA improved from a loss of RMB 12.95 billion in 2021 to a profit of RMB 1.81 billion in 2022[21] - Revenue increased by 22.3% from RMB 23.1 billion in Q3 2022 to RMB 28.3 billion in Q4 2022, driven by growth in online marketing services, live streaming, and e-commerce[58] - Gross profit increased by 20.3% from RMB 10.7 billion in Q3 2022 to RMB 12.9 billion in Q4 2022, with gross margin decreasing slightly from 46.3% to 45.5%[66] - Domestic operations turned a profit of RMB 192.1 million in 2022, compared to a loss of RMB 8.7 billion in 2021, driven by a 15.5% increase in domestic revenue[33] - Net loss for the year decreased significantly from RMB 78.1 billion in 2021 to RMB 13.7 billion in 2022[37] - Loss before tax in Q4 2022 was RMB 1.2 billion, a significant improvement from RMB 5.9 billion in Q4 2021[56] - Net loss for Q4 2022 was RMB 1.5 billion, compared to RMB 6.2 billion in Q4 2021[57] - Adjusted EBITDA for Q4 2022 was RMB 1.935 billion, compared to RMB 1.023 billion in Q3 2022 and a loss of RMB 1.290 billion in Q4 2021[74] Online Marketing Services - Online marketing service revenue increased by 14.9% from RMB 42.7 billion in 2021 to RMB 49.0 billion in 2022, driven by platform traffic growth, diversified product portfolio, and refined operations[23] - Online marketing service revenue grew by 30.2% from RMB 11.6 billion in Q3 2022 to RMB 15.1 billion in Q4 2022, driven by increased advertiser numbers and spending[60] E-commerce and Other Services - The coverage rate of e-commerce trust rights orders increased by 460% compared to 2021[14] - Other service revenue rose by 31.4% from RMB 7.4 billion in 2021 to RMB 9.8 billion in 2022, primarily due to growth in e-commerce business[25] - Other service revenue rose by 22.1% from RMB 2.6 billion in Q3 2022 to RMB 3.2 billion in Q4 2022, driven by growth in e-commerce GMV[62] Financial Metrics and Cash Flow - Total revenue increased from RMB 81.1 billion in 2021 to RMB 94.2 billion in 2022, with online marketing services contributing 52.1%, live streaming 37.6%, and other services 10.3%[23] - Gross profit increased by 23.8% from RMB 34.0 billion in 2021 to RMB 42.1 billion in 2022, with gross margin improving from 42.0% to 44.7%[28] - Sales and marketing expenses decreased by 16.0% from RMB 44.2 billion in 2021 to RMB 37.1 billion in 2022, reflecting more efficient user acquisition and retention spending[29] - R&D expenses decreased by 7.8% from RMB 15.0 billion in 2021 to RMB 13.8 billion in 2022, mainly due to reduced employee benefits and share-based compensation[30] - Operating loss narrowed from RMB 27.7 billion in 2021 to RMB 12.6 billion in 2022, with the operating loss margin improving from -34.2% to -13.3%[32] - Net financial income in Q4 2022 was RMB 106.8 million, compared to a net financial expense of RMB 56.7 million in Q4 2021, mainly due to increased bank deposit interest income and reduced lease liability interest expenses[55] - Sales and marketing expenses increased by 6.7% from RMB 9.1 billion in Q3 2022 to RMB 9.7 billion in Q4 2022, primarily due to e-commerce promotions and Spring Festival marketing activities[67] - Net other losses for Q4 2022 were RMB 350.2 million, compared to RMB 279.6 million in Q3 2022[68] - Operating loss for Q4 2022 was RMB 1.2 billion, with an operating margin of -4.4%, compared to an operating loss of RMB 2.6 billion and a margin of -11.3% in Q3 2022[68] - Domestic operating profit increased from RMB 375.1 million in Q3 2022 to RMB 1.3 billion in Q4 2022, driven by domestic revenue growth[70] - Net financial income for Q4 2022 was RMB 106.8 million, up from RMB 68.3 million in Q3 2022, primarily due to increased bank deposit interest income[71] - Loss before tax for Q4 2022 was RMB 1.2 billion, compared to RMB 2.6 billion in Q3 2022[72] - Income tax expense for Q4 2022 was RMB 383.9 million, compared to RMB 137.1 million in Q3 2022[72] - Net loss for Q4 2022 was RMB 1.5 billion, compared to RMB 2.7 billion in Q3 2022[73] - Operating cash flow for the year ended December 31, 2022, was RMB 2,198,028 thousand, compared to a negative RMB 5,519,291 thousand in 2021[86] - Net cash used in investing activities for 2022 was RMB 17,547,929 thousand, slightly lower than RMB 18,361,335 thousand in 2021[86] - Net cash used in financing activities for 2022 was RMB 4,482,383 thousand, compared to a net cash inflow of RMB 36,500,187 thousand in 2021[86] - Total revenue for 2022 was RMB 94,182,522 thousand, a 16.2% increase from RMB 81,081,513 thousand in 2021[94] - Domestic revenue for 2022 was RMB 93,557,462 thousand, accounting for 99.3% of total revenue, while overseas revenue was RMB 625,060 thousand[94] - Online marketing services revenue grew to RMB 49,041,552 thousand in 2022, up 14.9% from RMB 42,665,483 thousand in 2021[95] - Live streaming revenue increased to RMB 35,387,952 thousand in 2022, a 14.2% rise from RMB 30,995,152 thousand in 2021[95] - Other services revenue reached RMB 9,753,018 thousand in 2022, a 31.4% increase from RMB 7,420,878 thousand in 2021[95] - The company reported a net decrease in cash and cash equivalents of RMB 19,832,284 thousand for 2022, compared to a net increase of RMB 12,619,561 thousand in 2021[86] - The company's cash and cash equivalents at the end of 2022 were RMB 13,274,269 thousand, down from RMB 32,612,419 thousand at the end of 2021[86] Assets and Liabilities - The company's right-of-use assets for internet data centers decreased to RMB 8,103,946 thousand in 2022 from RMB 10,101,628 thousand in 2021, a decline of 19.8%[104] - Total lease liabilities decreased to RMB 12,195,490 thousand in 2022 from RMB 13,608,685 thousand in 2021, a reduction of 10.4%[104] - The company added and modified right-of-use assets worth approximately RMB 10.1 billion in 2022, compared to RMB 2.3 billion in 2021[104] - Total cash outflows for leases in 2022 amounted to approximately RMB 3.4 billion, up from RMB 2.7 billion in 2021[105] - Trade receivables increased to RMB 6,333,247 thousand in 2022 from RMB 4,476,135 thousand in 2021, a rise of 41.5%[107] - Cash and cash equivalents decreased to RMB 13,274,269 thousand in 2022 from RMB 32,612,419 thousand in 2021, a significant drop of 59.3%[109][110] - The weighted average annual interest rate for initial term deposits within three months increased to 4.89% in 2022 from 0.57% in 2021[111] - Total investments in financial assets at fair value through profit or loss increased to RMB 16,713,187 thousand in 2022 from RMB 12,142,826 thousand in 2021, a growth of 37.6%[106] - Accounts payable increased to RMB 22,868,452 thousand in 2022 from RMB 20,021,082 thousand in 2021, a rise of 14.2%[115] - Customer prepayments decreased to RMB 3,240,402 thousand in 2022 from RMB 3,502,642 thousand in 2021, a decline of 7.5%[116] Corporate Governance and Proceeds Utilization - The company decided not to recommend the payment of a final dividend for the year ended December 31, 2022[117] - The net proceeds from the global offering amounted to approximately HKD 46,964.4 million[117] - 35% of the net proceeds (HKD 16,437.5 million) were allocated to enhancing the ecosystem, with HKD 15,315.3 million already utilized as of December 31, 2022[118] - 30% of the net proceeds (HKD 14,089.3 million) were allocated to strengthening R&D and technological capabilities, with HKD 12,554.9 million already utilized as of December 31, 2022[118] - 25% of the net proceeds (HKD 11,741.1 million) were allocated for selective acquisitions or investments, with only HKD 505.0 million utilized as of December 31, 2022[118] - 10% of the net proceeds (HKD 4,696.5 million) were allocated for working capital and general corporate purposes, with HKD 4,441.5 million already utilized as of December 31, 2022[118] - The remaining unused net proceeds as of December 31, 2022, totaled HKD 14,147.7 million[118] - The company expects to fully utilize the net proceeds by December 31, 2023[118] - The company has complied with all applicable provisions of the Corporate Governance Code for the year ended December 31, 2022[119] - The company’s 2023 Annual General Meeting is scheduled to be held on June 16, 2023[122] Definitions and Key Metrics - Average Revenue Per Paying User (ARPPU) is calculated by dividing the revenue for a specific period by the number of paying users during that period[127] - Gross Merchandise Value (GMV) refers to the total value of all products and services transacted on or through the company's platform, excluding transactions over RMB 100,000 or a series of transactions exceeding RMB 1,000,000 by a single buyer in a single day, unless settled[128] - GMV per 1,000 Views is calculated by dividing the GMV by the total number of page views and multiplying by 1,000[128] - The company's listing date on the Hong Kong Stock Exchange was February 5, 2021[128] - The company's organizational bylaws were adopted on January 18, 2021, and became effective on the listing date[127]

Kuaishou Technology (OTCPK:KUASF) Q3 2022 Earnings Conference Call November 22, 2022 7:00 AM ET Company Participants Cheng Yixiao - Co-Founder, Executive Director and Chief Executive Officer Jin Bing - Chief Financial Officer Conference Call Participants Kenneth Fong - Credit Suisse Lincoln Kong - Goldman Sachs Alex Poon - Morgan Stanley Thomas Chong - Jefferies Operator Good day, ladies and gentlemen. Thank you for standing by. Welcome to Kuaishou TechnologyÂ's Third Quarter 2022 Financial Results Conferen ...

Financial Data and Key Metrics Changes - The company's revenue for Q3 2022 grew by 12.9% year-over-year to 23.1 billion RMB, driven by growth in online marketing services, e-commerce, and live streaming businesses [14][17] - Adjusted net loss narrowed to 670 million RMB from 1.3 billion RMB in Q2 2022 and 4.6 billion RMB in Q3 2021, resulting in an adjusted net margin improvement from negative 22.5% in Q3 2021 to negative 2.9% in Q3 2022 [16][17] - Gross profit reached 10.7 billion RMB, growing 28.5% year-over-year, with a gross profit margin of 46.3%, improving 4.8 percentage points year-over-year [15][16] Business Line Data and Key Metrics Changes - Revenue from online marketing services was 11.6 billion RMB, up 6.2% year-over-year, despite a challenging advertising market [14][19] - E-commerce GMV reached 222.5 billion RMB, increasing by 26.6% year-over-year, with a significant rise in the number of active merchants [10][14] - Live streaming revenue grew by 15.8% year-over-year to 8.95 billion RMB, attributed to improved content quality and user matching efficiency [12][14] Market Data and Key Metrics Changes - The average daily time spent per DAU increased by 8.6% year-over-year to 129.3 minutes, indicating strong user engagement [6][7] - The number of monthly active e-commerce paying users surpassed 100 million, with a payment penetration rate exceeding 15% [22][23] - Monthly active advertisers increased by over 65% year-over-year, reflecting the platform's growing advertising effectiveness [9][14] Company Strategy and Development Direction - The company is focusing on enhancing its commercial ecosystem by integrating e-commerce, online marketing, and live streaming [3][4] - A new Commercial Ecosystem Committee has been established to facilitate collaboration among business units and improve monetization strategies [3][4] - The company aims to build a merchandise system to enhance understanding and control over the merchandise element in e-commerce [5][10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by macroeconomic conditions and the COVID-19 pandemic but emphasized breakthroughs in business operations and financial performance [2][6] - The advertising market is expected to recover slowly, with growth projected in the mid-single digits for 2022 [18][19] - The company remains confident in its long-term market development and aims to strengthen its foundational capabilities to capture more market share [21] Other Important Information - The company has implemented cross-departmental rotations for mid-level managers to enhance collaboration and efficiency [4] - The e-commerce business is seen as a key growth engine, with a focus on improving user experience and optimizing algorithms for better conversion rates [5][10] Q&A Session Summary Question: Advertising monetization outlook - Management noted that the overall recovery of the advertising market is weak, with expectations of mid-single-digit growth for 2022, and emphasized improvements in product commercialization [17][18] Question: E-commerce trends and performance - The number of active buyers surpassed 100 million, with a payment penetration rate over 15%. The company is focusing on multi-scenario penetration and enhancing user experience [22][23]

Financial Performance - Kuaishou Technology reported a revenue of RMB 23,128,413 thousand for the three months ended September 30, 2022, representing a 12.9% year-over-year increase from RMB 20,492,977 thousand[1]. - The company achieved a gross profit of RMB 10,703,003 thousand, which is 46.3% of total revenue, compared to 41.5% in the same period last year, reflecting a 25.8% increase[1]. - Operating loss for the quarter was RMB (2,612,192) thousand, a significant improvement from RMB (7,403,590) thousand in the previous year, marking a 64.7% reduction[1]. - The company reported a net loss of RMB (12,142,346) thousand for the nine months, a significant improvement from RMB (71,874,358) thousand in the same period last year, reflecting an 83.1% reduction[2]. - The company reported a net loss of RMB 2,712,401 thousand for the three months ended September 30, 2022, compared to a net loss of RMB 7,086,896 thousand for the same period in 2021, representing a 61.7% improvement[67]. - For the nine months ended September 30, 2022, the net loss was RMB 12,142,346 thousand, significantly reduced from RMB 71,874,358 thousand in the previous year, indicating an 83.1% decrease[67]. User Engagement - Average daily active users reached 363.4 million, up 13.4% year-over-year, while average monthly active users increased to 626.0 million[7]. - The average daily active user engagement time increased to 129.3 minutes, up from 119.1 minutes year-over-year[7]. - The number of active paid users in the live streaming segment grew by 29.3% year-on-year to 59.6 million, with a continuous increase in the monthly payment rate[12]. - The number of mutual followers on the Kuaishou app reached 23.5 billion by the end of September 2022, a significant year-on-year increase of 63.1%[9]. - The average daily usage time per active user rose by 8.6% year-on-year to 129.3 minutes, indicating high user engagement and community activity[9]. Revenue Streams - Online marketing services revenue reached RMB 11.6 billion in Q3 2022, a year-on-year increase of 6.2%, despite external pressures on the advertising industry[11]. - The live streaming business revenue grew by 15.8% year-on-year to RMB 8.9 billion, supported by enhanced operational strategies and user engagement[12]. - E-commerce gross merchandise volume (GMV) increased by 26.6% year-on-year to RMB 222.5 billion, with nearly 80% year-on-year growth in the number of new merchants[14]. - The company’s revenue from live streaming services for the three months ended September 30, 2022, was RMB 8,946,690 thousand, an increase from RMB 7,724,141 thousand in the same period of 2021, representing a growth of approximately 15.8%[76]. Cost Management - Total sales costs rose by 3.7% from RMB 11,984,377 in Q3 2021 to RMB 12,425,410 in Q3 2022, primarily due to increased revenue sharing costs[24]. - Selling and marketing expenses decreased by 17.1% from RMB 11,016,923 in Q3 2021 to RMB 9,130,341 in Q3 2022, reducing as a percentage of total revenue from 53.8% to 39.5%[26]. - R&D expenses decreased by 16.2% from RMB 4,217,699 in Q3 2021 to RMB 3,533,090 in Q3 2022, mainly due to reduced employee benefits[28]. Cash Flow and Investments - Operating cash flow for Q3 2022 was RMB 2,710,193 thousand, primarily due to adjustments for non-cash items and changes in working capital[63]. - The company incurred a net cash outflow from investing activities of RMB 1,561,638 thousand in Q3 2022, mainly due to investments in financial assets and purchases of property and equipment[64]. - The company reported a net cash outflow from financing activities for Q3 2022 of RMB 889,880 thousand, primarily due to lease principal and interest payments[65]. Future Outlook - The company plans to invest over 100 million in traffic resources over the next three years to support rural revitalization initiatives, aiming to discover and support over 1,000 rural leaders[17]. - Future guidance indicates an expected revenue growth of 30% for the next fiscal year, driven by increased user acquisition and engagement strategies[96]. - The company is investing in new technology development, with a budget allocation of RMB 1 billion for R&D in the upcoming year[95]. Corporate Governance - The company has complied with all applicable code provisions of the corporate governance code as of September 30, 2022[85]. - The audit committee reviewed the unaudited interim financial information for the three and nine months ended September 30, 2022, with no disagreements on accounting treatment between the board and the audit committee[86]. - The company emphasizes the importance of high standards of corporate governance for its development and shareholder protection[85].

Financial Performance - Total revenue for the three months ended June 30, 2022, was RMB 21,695,148 thousand, representing a year-over-year increase of 13.4% from RMB 19,138,826 thousand in 2021[18]. - Gross profit for the same period was RMB 9,769,768 thousand, accounting for 45.0% of total revenue, compared to 43.8% in the previous year, reflecting a 16.5% increase[18]. - Operating loss for the three months was RMB (3,059,098) thousand, a significant improvement of 57.6% compared to RMB (7,215,379) thousand in the prior year[18]. - For the six months ended June 30, 2022, total revenue reached RMB 42,761,825 thousand, an 18.3% increase from RMB 36,158,276 thousand in 2021[19]. - The adjusted net loss for the six months was RMB (5,034,166) thousand, a reduction of 52.8% from RMB (10,666,739) thousand in the same period last year[19]. - The adjusted EBITDA for the six months was RMB (1,144,484) thousand, showing an improvement of 86.5% compared to RMB (8,489,028) thousand in 2021[19]. - The net loss for Q2 2022 was RMB 3.2 billion, compared to a net loss of RMB 7.0 billion in Q2 2021[66]. - The company reported a net loss of RMB 9,430,391 for the period, compared to a loss of RMB 64,785,560 in the previous period[166][167]. Revenue Breakdown - Domestic revenue for the three months ended June 30, 2022, was RMB 21,591,796 thousand, while overseas revenue was RMB 103,352 thousand[21]. - The total revenue for the six months from domestic operations was RMB 42,610,821 thousand, while overseas operations contributed RMB 151,004 thousand[27]. - Online marketing services revenue for Q2 2022 was RMB 11 billion, reflecting a 10.5% year-over-year growth[42]. - The company reported a significant increase in live streaming revenue, which reached RMB 16,407,069 thousand for the six months ended June 30, 2022, compared to RMB 14,443,829 thousand in the same period of 2021, representing a growth of approximately 13.7%[196]. - The revenue recognized at a point in time for the six months ended June 30, 2022, was RMB 41,743,781 thousand, compared to RMB 31,158,489 thousand in the same period of 2021, reflecting an increase of approximately 33.9%[197]. User Engagement - Average daily active users reached 347.3 million in Q2 2022, up 18.5% year-over-year[39]. - Average monthly active users increased to 586.7 million in Q2 2022, compared to 506.2 million in Q2 2021[35]. - Average daily usage time per active user reached 125.2 minutes in Q2 2022, up 17.1% year-over-year[40]. - The number of mutual followers on the platform exceeded 20 billion pairs, a 65.9% increase year-over-year[40]. - The monthly active users for the "Quick Recruitment" feature reached 25 million, a 90% increase from Q1 2022[44]. Cost Management - Sales and marketing expenses decreased by 22.2% year-over-year to RMB 8.8 billion in Q2 2022, representing 40.4% of total revenue[61]. - Research and development expenses fell by 16.1% year-over-year to RMB 3.3 billion in Q2 2022[61]. - Employee benefits expenses decreased to RMB 10,069,465 thousand for the six months ended June 30, 2022, down 1.5% from RMB 9,917,115 thousand in the previous year[199]. - Marketing and advertising expenses for the six months ended June 30, 2022, were RMB 16,900,661 thousand, a decline of 22.3% compared to RMB 21,711,796 thousand in the same period of 2021[199]. - Bandwidth and server hosting costs totaled RMB 3,126,454 thousand for the six months ended June 30, 2022, down 19.5% from RMB 3,883,703 thousand in the previous year[199]. Cash Flow and Liquidity - As of June 30, 2022, the company's cash and cash equivalents amounted to RMB 14.4 billion, with total available funds reaching RMB 41.3 billion[84]. - The net cash used in operating activities for Q2 2022 was RMB 2.3 billion, primarily due to a pre-tax loss of RMB 3.1 billion adjusted for non-cash items[86]. - The net cash generated from investing activities in Q2 2022 was RMB 1.8 billion, mainly due to changes in financial assets measured at fair value[87]. - The net cash used in financing activities for Q2 2022 was RMB 778.2 million, primarily for lease principal and interest payments[88]. - Cash and cash equivalents at the end of 2022 decreased to RMB 14,391,261 thousand from RMB 46,773,431 thousand in 2021, a decline of 69.3%[169]. Corporate Governance - The company has established an audit committee to oversee financial reporting processes and risk management, comprising three independent non-executive directors[145]. - The company has established a corporate governance committee to ensure compliance with listing rules and manage conflicts of interest[147]. - The company has maintained strict corporate governance standards, emphasizing effective internal controls and transparency in board operations[138]. - All directors confirmed compliance with the standard code of conduct regarding securities transactions during the reporting period[139]. - The company is committed to maintaining compliance with listing rules regarding different voting rights and share ownership[124]. Shareholder Information - As of June 30, 2022, the total issued share capital was 4,275,647,480 shares, consisting of 766,237,001 Class A shares and 3,509,410,479 Class B shares[96]. - Tencent Mobility Limited owns 506,143,854 shares, representing 14.42% of the total issued share capital[103]. - The company has a dual-class voting structure where each A-class share has 10 votes and each B-class share has one vote, allowing certain beneficiaries to exert significant control over company decisions[122]. - The company aims to align the interests of option holders with those of shareholders to promote success and enhance shareholder value[106]. - The stock options granted during the reporting period have a total of 78,967,759 options remaining unexercised as of the end of the reporting period[118].

Financial Data and Key Metrics Changes - The company's revenues for Q2 2022 increased by 13.4% year-on-year to RMB21.7 billion, driven by growth in online marketing services, e-commerce, and live streaming businesses [32] - Revenue from online marketing services reached RMB11 billion, up 10.5% year-on-year, attributed to traffic growth and improved ad performance [32][16] - Gross profit for Q2 2022 was RMB9.8 billion, growing 16.5% year-on-year, with a gross profit margin of 45%, up from 43.8% in Q2 2021 [35] - The operating loss narrowed to RMB3.1 billion, an improvement from RMB7.2 billion in Q2 2021 [37] - Adjusted net loss for Q2 2022 was RMB1.3 billion, significantly improved from RMB5.0 billion in Q2 2021 [38] Business Line Data and Key Metrics Changes - E-commerce GMV increased by 31.5% year-on-year to RMB191.2 billion, with live streaming e-commerce gaining a larger market share [20] - Revenue from live streaming grew by 19.1% year-on-year to RMB8.6 billion, driven by improved content quality and operational capabilities [33] - The number of monthly active brand merchants more than doubled year-on-year, indicating strong growth in the e-commerce segment [45] Market Data and Key Metrics Changes - Domestic DAUs reached 347 million, an 18.5% year-on-year increase, reflecting strong user engagement [7] - The average daily time spent per DAU was 125.2 minutes, up 17.1% year-on-year, indicating increased user stickiness [8] - The number of proactive advertisers increased by over 90% year-on-year, reflecting improved advertiser retention and demand [16] Company Strategy and Development Direction - The company aims to enhance monetization efficiency across its ecosystem while adapting to the evolving macro environment [39] - A focus on building a trust-based e-commerce ecosystem is emphasized, leveraging live streaming to improve sales conversion [42] - The company is exploring new monetization models and improving operational efficiencies to support sustainable growth [39] Management Comments on Operating Environment and Future Outlook - Management acknowledged the challenges posed by the pandemic and macroeconomic volatility but highlighted significant business breakthroughs [6] - The company remains committed to improving user experience and operational efficiency, aiming for a target of 400 million DAUs [11] - Future strategies include enhancing the recruitment experience for blue-collar workers and capturing a leading share of the online blue-collar recruitment market [56] Other Important Information - The company has over 2,000 celebrity accounts with a cumulative following of 870 million, enhancing its content ecosystem [14] - The average ROI for native advertisers continues to improve, indicating effective advertising strategies [18] Q&A Session Summary Question: E-commerce business growth and consumer behavior changes post-COVID - Management highlighted the development of a trust-based e-commerce ecosystem and improvements in sales conversion through live streaming [42][43] - The number of monthly new merchants increased significantly, reflecting the growing recognition of live streaming e-commerce advantages [44] Question: Operational efficiencies and top-line growth - Management discussed breakthroughs in revenue-sharing cost management and technology upgrades to enhance efficiency [51][52] Question: Client recruitment progress and monetization plans - Management outlined the advantages of Kuaishou's blue-collar recruitment platform, emphasizing user trust and efficient matching capabilities [55][56]

Financial Data and Key Metrics Changes - The company's revenues for Q2 2022 increased by 13.4% year-on-year to RMB21.7 billion, driven by growth in online marketing services, e-commerce, and live streaming businesses [33][34] - Gross profit reached RMB9.8 billion, growing 16.5% year-on-year, with a gross profit margin of 45%, up from 43.8% in Q2 2021 [36] - The operating loss narrowed to RMB3.1 billion, an improvement from RMB7.2 billion in Q2 2021, with an operating margin increase of 23.6 percentage points year-on-year [38][39] Business Line Data and Key Metrics Changes - Revenue from online marketing services increased by 10.5% year-on-year to RMB11 billion, attributed to traffic growth and improved ad performance [17][33] - E-commerce GMV grew by 31.5% year-on-year to RMB191.2 billion, with live streaming e-commerce gaining a larger market share [21][34] - Live streaming revenue grew by 19.1% year-on-year to RMB8.56 billion, supported by improved content quality and operational capabilities [25][34] Market Data and Key Metrics Changes - Domestic DAUs reached 347 million, an 18.5% year-on-year increase, with MAUs averaging 587 million, up 15.9% year-on-year [8][9] - The average daily time spent per DAU increased to 125.2 minutes, up 17.1% year-on-year, indicating higher user engagement [9][12] - The number of monthly active brand merchants more than doubled year-on-year, reflecting strong growth in the e-commerce sector [48] Company Strategy and Development Direction - The company aims to enhance monetization efficiency across its ecosystem while adapting to the evolving macro environment [41] - A focus on improving operational efficiency and executing long-term development strategies is emphasized to achieve sustainable growth [41] - The company is expanding its e-commerce ecosystem by enhancing trust-based experiences and improving sales conversion through live streaming [45][46] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges from the macroeconomic environment and pandemic resurgence but highlighted steady traffic and revenue growth [32] - The company is optimistic about achieving its target of 400 million DAUs, supported by effective user retention strategies and improved operational efficiencies [12] - Future plans include further investment in algorithms and product optimization to enhance user experience and retention [28][29] Other Important Information - The company reported a significant increase in the number of proactive advertisers, with a 90% year-on-year rise in Q2 2022 [17] - The average ROI for native advertisers continued to improve, indicating effective advertising strategies [19] - The company maintains a healthy balance sheet with cash and equivalents totaling RMB41.26 billion as of June 30, 2022 [40] Q&A Session Summary Question: E-commerce business development and consumer behavior changes post-COVID - Management highlighted the importance of building a trust-based e-commerce ecosystem and improving sales conversion through live streaming [45][46] - The number of monthly new merchants increased significantly, indicating recognition of live streaming e-commerce advantages [47][50] Question: Operational efficiencies and top-line growth - Management discussed breakthroughs in revenue-sharing cost management and technology upgrades to enhance efficiency [55][56] Question: Client recruitment strategy and monetization plans - Management emphasized the advantages of Kuaishou's platform for blue-collar recruitment, including a large user base and trust-building capabilities [60][61] - The company is exploring monetization models and has initiated small-scale trials of advertisements in the recruitment sector [61]

Financial Data and Key Metrics Changes - In Q1 2022, total revenue reached 21.1 billion yuan, a year-on-year increase of 23.8% [15][16] - Online marketing service revenue was 11.4 billion yuan, up 32.6% year-on-year, accounting for 53.9% of total revenue [15][16] - Gross profit was 8.8 billion yuan, with a gross margin of 41.7%, an increase from 41.1% in Q1 2021 [16][17] - Operating loss narrowed significantly to 5.6 billion yuan, improving the operating margin from -42.8% in Q1 2021 to -26.8% in Q1 2022 [17][18] Business Line Data and Key Metrics Changes - Daily Active Users (DAU) reached 346 million, a 17% year-on-year increase, while Monthly Active Users (MAU) reached 598 million, up 15% year-on-year [3][4] - E-commerce Gross Merchandise Value (GMV) grew by 47.7% year-on-year, reaching 175.1 billion yuan [10][16] - Live streaming revenue was 7.8 billion yuan, an 8.2% increase year-on-year [12][16] Market Data and Key Metrics Changes - The advertising market faced challenges due to macroeconomic conditions and the pandemic, but the company maintained a strong growth trajectory in its advertising revenue [35][39] - The number of advertisers increased by over 60% year-on-year, indicating a growing interest in the company's advertising offerings [8][39] Company Strategy and Development Direction - The company focuses on differentiated growth strategies, leveraging its social attributes and content discovery mechanisms to enhance user engagement [20][21] - The introduction of the "Fast Brand" strategy aims to cultivate emerging self-operated brands within the e-commerce ecosystem, enhancing user experience and trust [31][32] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the impact of the recent COVID-19 outbreak on operations but expressed confidence in the company's resilience and ability to capture market share in the long term [27][30] - The company is optimistic about the recovery of its e-commerce business as pandemic control measures improve [29][30] Other Important Information - The company has implemented various support measures for merchants affected by the pandemic, including advertising fee refunds and promotional incentives [9][10] - The organization has undergone structural adjustments to enhance operational efficiency and inter-departmental collaboration [25][26] Q&A Session Summary Question: What drove the unexpected growth in Q1 despite high sales expenses? - Management attributed the growth to differentiated growth strategies, the strong engagement of short videos, and effective organizational adjustments [19][20] Question: Can you share recent developments in the e-commerce sector? - Management noted that while the e-commerce business faced challenges due to the pandemic, it still achieved close to 50% year-on-year growth, with a focus on improving logistics and user experience [27][28] Question: How does the current macroeconomic environment affect advertising growth? - Management acknowledged that the macroeconomic environment poses challenges but emphasized that the company continues to gain market share and maintain strong revenue growth [35][39] Question: What is the potential impact of regulations on the live streaming business? - Management indicated that while regulations are evolving, the company remains focused on enhancing the value of its live streaming offerings and achieving growth targets [38][39]