Financial Data and Key Metrics Changes - Total revenue increased by 13.1% year over year to RMB 35 billion in Q2 2025, with adjusted net profit reaching RMB 5.6 billion and an adjusted margin of 16% [5][34][40] - Gross profit grew by 13.8% year over year to RMB 19.5 billion, with a gross profit margin of 55.7%, reflecting a 0.4 percentage point increase year over year [38] - Selling and marketing expenses rose by 4.6% year over year to RMB 10.5 billion, accounting for 30% of total revenue, down from 32.4% in Q2 last year [39] Business Line Data and Key Metrics Changes - Revenue from online marketing services increased by 12.8% year over year to RMB 19.8 billion, driven by enhanced AI capabilities [35][56] - E-commerce GMV rose by 17.6% year over year, with the number of monthly average paying users reaching 134 million [19][74] - Revenue from Clean AI surpassed RMB 250 million in Q2, indicating strong growth in AI-driven services [9][36] Market Data and Key Metrics Changes - Average DAUs on the Kuaishou app reached an all-time high of 409 million, with MAUs at 715 million, reflecting a year-over-year increase of 3.4% and 3.3% respectively [11][12] - Revenue from local services grew by 20% year over year to RMB 1.3 billion, with DAUs in Brazil showing stable growth [28][29] Company Strategy and Development Direction - The company is focused on leveraging AI technology to enhance user experience and operational efficiency across its business lines [4][34] - Clean AI is positioned as a one-stop creative engine, with plans to expand its applications in gaming and professional film production [8][49] - The company aims to maintain high-quality growth while exploring synergies between content and business ecosystems [32][43] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's long-term growth prospects, highlighting the resilience of its business ecosystem amid macro uncertainties [5][6] - The company plans to continue investing in AI technologies to drive efficiency and discover new commercialization opportunities [32][84] Other Important Information - A special dividend of HKD 0.46 per share was declared for the first time since delisting, amounting to approximately HKD 2 billion in total [5][6] - The company will no longer disclose quarterly GMV figures separately starting in 2026, focusing instead on a more comprehensive set of indicators [41][42] Q&A Session Summary Question: What are the major use cases for Clean AI users at the moment? - Clean AI's users include mass creators and professional creators, with applications in content creation, advertising, and film production [46][47] Question: What are the AI use cases in the overall business? - AI technology is integrated across various business scenarios, enhancing marketing material generation and improving user engagement [54][56] Question: What verticals are expected to have strong growth in the second half of the year? - Strong growth is anticipated in local services, automotive, and content consumption industries, with strategies to enhance client outreach and operational results [62][64] Question: How does Kuaishou maintain momentum in e-commerce amid competition? - The company focuses on synergizing supply and demand, enhancing merchant capabilities, and improving user engagement to drive e-commerce growth [72][74] Question: What updates are there on AI CapEx and net profit margin? - AI-related CapEx is expected to double, with the impact on overall profitability projected to remain around 1% to 2% [82][84]

Financial Data and Key Metrics Changes - In Q1 2025, total revenue increased by 10.9% year on year to RMB 32.6 billion, with adjusted net profit reaching RMB 4.6 billion, representing an adjusted net margin of 14% [7][38][44] - Gross profit margin approached 55%, with gross profit growing by 10.4% year on year to RMB 17.8 billion [8][42] - Cost of revenue increased by 11.5% year on year to RMB 14.8 billion, accounting for 45.4% of total revenue [42] Business Line Data and Key Metrics Changes - Revenue from online marketing services grew by 8% year on year to RMB 18 billion, driven by AI technology integration [17][39] - E-commerce GMV grew by 15.4% year on year, with the number of monthly average active paying users reaching 135 million [20][21] - Live streaming revenue increased by 14.4% year on year to RMB 9.8 billion, marking a return to positive growth [28][41] Market Data and Key Metrics Changes - Average daily active users (DAUs) on the Kuaishou app reached a record high of 408 million, with average daily time spent per DAU at 133.8 minutes [13][14] - The overseas business achieved a revenue increase of 32.7% to RMB 1.32 billion, marking its first-ever quarter of operating profit [31][38] Company Strategy and Development Direction - The company is focusing on AI technology integration across its business lines to enhance user experience and operational efficiency [7][11] - Clean AI is positioned as a foundational infrastructure for video creation, with plans for continuous technological iteration and product innovation [49][51] - The company aims to leverage its omni-domain operational advantages to enhance e-commerce and marketing services, particularly in lower-tier cities [66][77] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving double-digit growth in online marketing services in the second quarter, driven by improved client placements [64] - The company anticipates that AI investments will contribute positively to profitability in the medium to long term, with expectations of narrowing losses in AI-related areas [82] - The focus remains on user-centric approaches and long-term technology investments to drive growth and shareholder value [36][45] Other Important Information - The company repurchased approximately HKD 1.42 billion worth of shares, accounting for about 0.68% of total shares outstanding [44] - The average daily advertising spending on IGC marketing materials remained at RMB 30 million [12] Q&A Session Summary Question: Update on Clean AI's commercialization and growth strategy - Clean AI's revenue reached RMB 150 million in Q1, with paid prosumer subscriptions accounting for nearly 70% of revenue [49][50] - The company plans to maintain its leading position through continuous technological advancements and operational activities, particularly in overseas markets [52][53] Question: How AI is empowering existing businesses - AI has significantly improved marketing material production and client conversion rates, with average daily GMV of AI-generated live streaming highlights increasing by over 300% year on year [56][60] - The intelligent customer service system achieved a resolution rate of up to 80% [60] Question: Trends in online marketing services and key growth strategies - The company expects a return to double-digit growth in online marketing services, with strong contributions from content consumption and local services sectors [64][66] - Marketing spending in the short play industry grew over 300% year on year, indicating strong growth potential [66] Question: Strategy for the six eighteen shopping festival - The company will provide significant traffic resources and subsidies, focusing on user engagement and tailored strategies for different product types [72][75] - AI capabilities will be leveraged to empower merchants and improve operational efficiency [77] Question: Investment plan on AI and its impact on profitability - AI investments are expected to increase, particularly in R&D personnel costs, but the impact on overall profit margin will be relatively small [81][82]