36Kr Holdings Inc. Reports Second Quarter 2021 Unaudited Financial Results

Rhea-AI Summary

36Kr Holdings Inc. (NASDAQ: KRKR) reported its unaudited financial results for Q2 2021, revealing total revenues of RMB72.1 million (US$11.2 million), a decline from RMB76.7 million in Q2 2020. Online advertising revenues surged by 65.1% to RMB51.7 million (US$8.0 million). The company posted a net loss of RMB34.1 million (US$5.3 million), significantly reduced from RMB79.5 million year-over-year. Notably, gross profit increased by 86.1% to RMB41.4 million (US$6.4 million), with a gross profit margin of 57.4%, up from 29.0% in the previous year.

Positive

• Online advertising services revenue rose 65.1% year-over-year to RMB51.7 million.
• Subscription services revenue increased by 124.1% to RMB6.0 million.
• Gross profit increased by 86.1% to RMB41.4 million, and gross profit margin improved to 57.4%.
• Average monthly page views increased by 69.5% year-over-year to 846.3 million.

Negative

• Total revenues decreased to RMB72.1 million, down from RMB76.7 million in Q2 2020.
• Enterprise value-added services revenue fell to RMB14.3 million, down from RMB42.6 million YoY.
• Net loss attributable to ordinary shareholders was RMB34.1 million, although improved from RMB79.5 million in the previous year.

BEIJING, Aug. 24, 2021 /PRNewswire/ -- 36Kr Holdings Inc. ("36Kr" or the "Company" or "We") (NASDAQ: KRKR), a prominent brand and a pioneering platform dedicated to serving New Economy participants in China, today announced its unaudited financial results for the second quarter 2021 ended June 30, 2021.

Second Quarter 2021 Operational and Financial Highlights

• Average monthly page views ("PV") for the twelve-month period ended June 30, 2021 increased by 69.5% to 846.3 million, from 499.2 million for the twelve-month period ended June 30, 2020.
• Total revenues were RMB72.1 million (US$11.2 million) in the second quarter of 2021, compared to RMB76.7 million in the same period of 2020.
• Revenues from online advertising services increased by 65.1% to RMB51.7 million (US$8.0 million) in the second quarter of 2021, from RMB31.3 million in the same period of 2020.
• Revenues from enterprise value-added services were RMB14.3 million (US$2.2 million) in the second quarter of 2021, compared to RMB42.6 million in the same period of 2020. Gross transaction value^[1] increased by 35.9% to RMB57.9 million in the second quarter of 2021, from RMB42.6 million in the same period of 2020.
• Subscription services revenues increased by 124.1% to RMB6.0 million (US$0.9 million) in the second quarter of 2021, from RMB2.7 million in the same period of 2020.
• Gross profit increased by 86.1% to RMB41.4 million (US$6.4 million) in the second quarter of 2021, from RMB22.2 million in the same period of 2020. Gross profit margin was 57.4% in the second quarter of 2021, compared to 29.0% in the same period of 2020.
• Net loss attributable to 36Kr Holdings Inc.'s ordinary shareholders was RMB34.1 million (US$5.3 million) in the second quarter of 2021, compared to RMB79.5 million in the same period of 2020.

[1] Starting from January 1, 2021, 36Kr recognized revenues of certain enterprise value-added services on a net basis, to reflect the fact that the Company continuously shifted focus towards higher margin businesses hence ceased to act as a principal in certain low gross margin businesses and only acted as an agent. To increase comparability of operating results and help investors better understand our business performance and operating trends, we introduced the gross transaction value as a supplemental metric to describe our business. Gross transaction value is defined as the value of executed confirmed orders for services provided for our customers.

Selected Operating Data

		For the Three Months Ended June 30,
		2020		2021
Online advertising services
Number of online advertising services end customers		161		188
Average revenue per online advertising services end customer (RMB'000)[2]		194.7		275.2
Enterprise value-added services
Number of enterprise value-added services end customers		80		50
Average revenue per enterprise value-added services end customer (RMB'000)[3]		533.0		286.1
Subscription services
Number of individual subscribers		982		581
Average revenue per individual subscriber (RMB)[4]		521.0		1,420.0
Number of institutional investors		33		87
Average revenue per institutional investor (RMB'000)[5]		62.7		59.7
[2] Equals revenues generated from online advertising services for a period divided by the number of online advertising services end customers in the same period.
[3] Equals revenues generated from enterprise value-added services for a period divided by the number of enterprise value-added services end customers in the same period.
[4] Equals revenues generated from individual subscription services for a period divided by the number of individual subscribers in the same period.
[5] Equals revenues generated from institutional investor subscription services for a period divided by the number of institutional investors in the same period.

Mr. Dagang Feng, co-chairman and chief executive officer of 36Kr, commented, "In the second quarter of 2021, we continued to broaden our New Economy-focused content and service offerings and once again achieved record-setting performance in total user traffic, with average monthly PVs reaching a new high at 846.3 million for the twelve-month period ended June 30, 2021, a 69.5% year-over-year increase, marking our 13th consecutive quarter of PV growth. We have been making robust progress in content enrichment with diversified presentation formats, appealing a wider user base and further solidifying our core competencies and spearheading business innovation. Moreover, our tireless optimization in products and technologies has been paving the way for us to empower the growth of New Economy participants as well as the digital transformation of traditional industries through our influential and comprehensive platform. As we continue to strategically focus on enterprise services as long-term growth driver, we believe we are well positioned to seize the vast opportunities in the new era, creating compelling value proposition for more customers, users and investors."

Mr. Xiang Li, acting chief financial officer of 36Kr, stated, "We are pleased to report a set of solid financial results in the second quarter of 2021, with a strong year-over-year growth across all of our business segments on a comparable basis. Notably, our advertising revenues increased by 65.1% to RMB51.7 million, demonstrating sustained user engagement and customer interest in our premium content and service offerings. As we continued to shift our resources and focus towards higher margin businesses, we saw continuing improvement in both gross profit and gross profit margin, which reached 57.4% this quarter. Going forward, we will continue to build upon our content strengths and expand monetization channels to seize vast New Economy opportunities."

Second Quarter 2021 Financial Results

Total revenues were RMB72.1 million (US$11.2 million) in the second quarter of 2021, compared to RMB76.7 million in the same period of 2020. 

• Online advertising services revenues increased by 65.1% to RMB51.7 million (US$8.0 million) in the second quarter of 2021, from RMB31.3 million in the same period of 2020. The increase was primarily attributable to the strong recovery of market demand as well as more innovative marketing solutions we provided to our customers. The number of advertising customers and the average revenue per advertising customer both achieved strong growth in the second quarter of 2021.
• Enterprise value-added services revenues were RMB14.3 million (US$2.2 million) in the second quarter of 2021, compared to RMB42.6 million in the same period of 2020. The decrease was primarily because we continuously shifted our focus towards higher margin businesses and starting from the first quarter of 2021, we ceased to act as a principal in certain low gross margin businesses and only acted as an agent. As a result, revenues of such businesses were recognized on a net basis from the first quarter of 2021 onward. To increase comparability of operating results and help investors better understand our business performance and operating trends, we introduced the gross transaction value as a supplemental metric to describe our business. Gross transaction value of enterprise value-added services was RMB57.9 million in the second quarter of 2021, compared to RMB42.6 million in the same period of 2020.
• Subscription services revenues increased by 124.1% to RMB6.0 million (US$0.9 million) in the second quarter of 2021, from RMB2.7 million in the same period of 2020. The increase was primarily attributable to high-quality subscription products we offered to our institutional and individual subscribers.

Cost of revenues was RMB30.7 million (US$4.8 million) in the second quarter of 2021, compared to RMB54.4 million in the same period of 2020. The decrease was primarily because we continuously shifted our focus towards higher margin businesses and recognized certain revenues on a net basis. For more details, please refer to the aforementioned information in terms of enterprise value-added services revenues.

Gross profit increased by 86.1% to RMB41.4 million (US$6.4 million) in the second quarter of 2021, from RMB22.2 million in the same period of 2020. Gross profit margin was 57.4% in the second quarter of 2021, compared to 29.0% in the same period of 2020.

Operating expenses were RMB75.3 million (US$11.7 million) in the second quarter of 2021, compared to RMB99.4 million in the same period of 2020.

• Sales and marketing expenses were RMB33.4 million (US$5.2 million) in the second quarter of 2021, compared to RMB39.0 million in the same period of 2020. The decrease was primarily attributable to the decrease in marketing expenses and share-based compensation expenses.
• General and administrative expenses were RMB29.9 million (US$4.6 million) in the second quarter of 2021, compared to RMB50.9 million in the same period of 2020. The decrease was primarily attributable to the decrease in the allowance for credit losses and share-based compensation expenses.
• Research and development expenses were RMB12.0 million (US$1.9 million) in the second quarter of 2021, compared to RMB9.6 million in the same period of 2020. The increase was primarily attributable to the increase in payroll-related expenses as we beefed up our research and development capabilities.

Share-based compensation expenses recognized in cost of revenues, sales and marketing expenses, research and development expenses, as well as general and administrative expenses totaled RMB3.3 million (US$0.5 million) in the second quarter of 2021, compared to RMB12.6 million in the same period of 2020.

Other expenses were RMB0.4 million (US$0.1 million) in the second quarter of 2021, compared to RMB2.0 million in the same period of 2020. The decrease was primarily attributable to less losses recognized from equity method investments.

Income tax expense was RMB1 thousand (US$0.2 thousand) in the second quarter of 2021, compared to RMB85 thousand in the same period of 2020.

Net loss was RMB34.3 million (US$5.3 million) in the second quarter of 2021, compared to RMB79.3 million in the same period of 2020. Non-GAAP adjusted net loss^[6] was RMB31.0 million (US$4.8 million) in the second quarter of 2021, compared to RMB66.7 million in the same period of 2020.

Net loss attributable to 36Kr Holdings Inc.'s ordinary shareholders was RMB34.1 million (US$5.3 million) in the second quarter of 2021, compared to RMB79.5 million in the same period of 2020.

Basic and diluted net loss per share were both RMB0.033 (US$0.005) in the second quarter of 2021, compared to RMB0.078 in the same period of 2020.

[6] Non-GAAP adjusted loss represents net loss excluding share-based compensation expenses.

Certain Balance Sheet Items

As of June 30, 2021, the Company had cash, cash equivalents and short-term investments of RMB149.6 million (US$23.2 million), compared to RMB174.1 million as of March 31, 2021. The decrease was mainly attributable to the share repurchase as well as cash used in operating activities.

Share Repurchase Program

On May 6, 2020, the Company announced that its Board of Directors authorized a share repurchase program under which the Company may repurchase up to a total of 1,000,000 of its American Depositary Shares ("ADSs"), each representing 25 Class A ordinary shares. As of June 30, 2021, the Company had repurchased approximately 785,713 ADSs for approximately RMB17.5 million (US$2.6 million) under this program.

Conference Call

The Company's management will host an earnings conference call at 8:00 AM U.S. Eastern Time on August 24, 2021 (8:00 PM Beijing/Hong Kong Time on August 24, 2021). Details for the conference call are as follows:

Event Title:	36Kr Holdings Inc. Second Quarter 2021 Earnings Conference Call
Conference ID:	5438658
Registration Link:	http://apac.directeventreg.com/registration/event/5438658

All participants must use the link provided above to complete the online registration process at least 20 minutes in advance of the conference call. Upon registering, each participant will receive a participant dial-in number, Direct Event passcode, and unique registrant ID, which will be used to join the conference call.

Additionally, a live and archived webcast of the conference call will be available on the Company's investor relations website at http://ir.36kr.com.

A replay of the conference call will be accessible approximately two hours after the conclusion of the live call until August 31, 2021, by dialing the following telephone numbers:

United States:	+1-855-452-5696
International:	+61-2-8199-0299
Hong Kong, China:	800-963-117
Mainland China:	400-632-2162
Replay Access Code:	5438658

About 36Kr Holdings Inc.

36Kr Holdings Inc. is a prominent brand and a pioneering platform dedicated to serving New Economy participants in China with the mission of empowering New Economy participants to achieve more. The Company started its business with high-quality New Economy-focused content offerings, covering a variety of industries in China's New Economy with diverse distribution channels. Leveraging traffic brought by high-quality content, the Company has expanded its offerings to business services, including online advertising services, enterprise value-added services and subscription services to address the evolving needs of New Economy companies and upgrading needs of traditional companies. The Company is supported by comprehensive database and strong data analytics capabilities. Through diverse service offerings and the significant brand influence, the Company is well-positioned to continuously capture the high growth potentials of China's New Economy. 

Use of Non-GAAP Financial Measures

In evaluating its business, the Company considers and uses two non-GAAP measures, adjusted net income/(loss) and adjusted EBITDA, as supplemental measures to review and assess its operating performance. The presentation of these two non-GAAP financial measures is not intended to be considered in isolation or as a substitute for the financial information prepared and presented in accordance with U.S. GAAP. The Company presents these non-GAAP financial measures because they are used by the Company's management to evaluate its operating performance and formulate business plans. The Company also believes that the use of these non-GAAP measures facilitates investors' assessment of its operating performance.

These non-GAAP financial measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. These non-GAAP financial measures have limitations as analytical tools. One of the key limitations of using these non-GAAP financial measures is that they do not reflect all items of income and expense that affect our operations. Further, these non-GAAP measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited.

The Company compensates for these limitations by reconciling these non-GAAP financial measures to the nearest U.S. GAAP performance measure, all of which should be considered when evaluating the Company performance. The Company encourages investors to review its financial information in its entirety and not rely on a single financial measure.

Adjusted net loss represents net loss excluding share-based compensation expenses.

Adjusted EBITDA represents adjusted net income/(loss) before interest income, interest expenses, income tax expense/(credit), depreciation of property and equipment and amortization of intangible assets.  

For more information on these non-GAAP financial measures, please see the table captioned "Reconciliations of GAAP and non-GAAP results" set forth at the end of this press release.

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from Renminbi to U.S. dollars and from U.S. dollars to Renminbi are made at a rate of RMB6.4566 to US$1.00, the exchange rate set forth in the H.10 statistical release of the Federal Reserve Board on of June 30, 2021.

Safe Harbor Statement

This announcement contains forward-looking statements. These statements are made under the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Statements that are not historical facts, including statements about the Company's beliefs and expectations, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: the Company's goal and strategies; the Company's future business development, results of operations and financial condition; relevant government policies and regulations relating to our business and industry; the Company's expectations regarding the use of proceeds from this offering; the Company's expectations regarding demand for, and market acceptance of, its services; the Company's ability to maintain and enhance its brand; the Company's ability to provide high-quality content in a timely manner to attract and retain users; the Company's ability to retain and hire quality in-house writers and editors; the Company's ability to maintain cooperation with third-party professional content providers; the Company's ability to maintain relationship with third-party platforms; general economic and business condition in China; possible disruptions in commercial activities caused by natural or human-induced disasters; and assumptions underlying or related to any of the foregoing. Further information regarding these and other risks is included in the Company's filings with the SEC. All information provided in this press release and in the attachments is as of the date of this press release, and the Company undertakes no obligation to update any forward-looking statement, except as required under applicable law. 

For investor and media inquiries, please contact:

In China:

36Kr Holdings Inc.
Investor Relations
Tel: +86 (10) 5825-4188
E-mail: ir@36kr.com

The Piacente Group, Inc.
Jenny Cai
Tel: +86 (10) 6508-0677
E-mail: 36Kr@tpg-ir.com

In the United States:

The Piacente Group, Inc.
Brandi Piacente
Tel: +1-212-481-2050
E-mail: 36Kr@tpg-ir.com

36Kr Holdings Inc.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
	December 31, 2020		June 30, 2021		June 30, 2021
	RMB'000		RMB'000		US$'000
Assets
Current assets:
Cash and cash equivalents	60,846		90,180		13,967
Short–term investments	148,344		59,391		9,198
Accounts receivable, net	304,845		225,335		34,900
Receivables due from related parties	98		1,643		254
Prepayments and other current assets	16,319		37,077		5,742
Total current assets	530,452		413,626		64,061
Non–current assets:
Property and equipment, net	3,941		3,627		562
Intangible assets, net	471		692		107
Long-term investments	16,300		43,143		6,682
Operating lease right-of-use assets, net	27,365		19,801		3,067
Total non–current assets	48,077		67,263		10,418
Total assets	578,529		480,889		74,479
Liabilities
Current liabilities:
Accounts payable	64,641		46,569		7,213
Salary and welfare payables	45,580		39,345		6,094
Taxes payable	18,824		9,547		1,479
Deferred revenue	18,849		34,885		5,403
Amounts due to related parties	548		1,318		204
Accrued liabilities and other payables	13,560		14,721		2,279
Operating lease liabilities	15,132		13,874		2,149
Total current liabilities	177,134		160,259		24,821
Non-current liabilities:
Operating lease liabilities	12,426		5,991		928
Total non-current liabilities	12,426		5,991		928
Total liabilities	189,560		166,250		25,749
Shareholders' equity
Ordinary shares	687		694		107
Treasury stock	(14,081)		(19,861)		(3,076)
Additional paid-in capital	2,040,693		2,046,692		316,992
Accumulated deficit	(1,638,581)		(1,712,181)		(265,183)
Accumulated other comprehensive loss	(7,897)		(8,443)		(1,308)
Total 36Kr Holdings Inc.'s shareholders' equity	380,821		306,901		47,532
Non-controlling interests	8,148		7,738		1,198
Total shareholders' equity	388,969		314,639		48,730
Total liabilities and shareholders' equity	578,529		480,889		74,479

 

 

36Kr Holdings Inc.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
	Three Months Ended						Six Months Ended
	June 30,		June 30,		June 30,		June 30,		June 30,		June 30,
	2020		2021		2021		2020		2021		2021
	RMB'000		RMB'000		US$'000		RMB'000		RMB'000		US$'000
Revenues:
Online advertising services	31,340		51,742		8,014		52,382		84,972		13,160
Enterprise value-added services	42,637		14,304		2,215		85,446		21,200		3,283
Subscription services	2,686		6,019		932		4,033		9,434		1,461
Total revenues	76,663		72,065		11,161		141,861		115,606		17,904
Cost of revenues	(54,423)		(30,683)		(4,752)		(114,172)		(50,848)		(7,875)
Gross profit	22,240		41,382		6,409		27,689		64,758		10,029
Operating expenses:
Sales and marketing expenses	(38,989)		(33,431)		(5,178)		(73,929)		(69,131)		(10,707)
General and administrative expenses	(50,870)		(29,914)		(4,633)		(110,194)		(50,073)		(7,755)
Research and development expenses	(9,572)		(11,969)		(1,854)		(18,120)		(20,943)		(3,244)
Total operating expenses	(99,431)		(75,314)		(11,665)		(202,243)		(140,147)		(21,706)
Loss from operations	(77,191)		(33,932)		(5,256)		(174,554)		(75,389)		(11,677)
Other income/(expenses):
Share of loss from equity method investments	(2,708)		(1,943)		(301)		(5,707)		(3,924)		(608)
Short-term investment income	341		411		64		486		1,391		215
Government grant	90		389		60		3,092		2,175		337
Others, net	228		772		120		1,433		982		152
Loss before income tax	(79,240)		(34,303)		(5,313)		(175,250)		(74,765)		(11,581)
Income tax (expenses)/credit	(85)		(1)		-		5		5		1
Net loss	(79,325)		(34,304)		(5,313)		(175,245)		(74,760)		(11,580)
Net loss/(income) attributable to non-controlling interests	(155)		233		36		390		1,160		180
Net loss attributable to 36Kr Holdings Inc.'s ordinary      shareholders	(79,480)		(34,071)		(5,277)		(174,855)		(73,600)		(11,400)
Net loss	(79,325)		(34,304)		(5,313)		(175,245)		(74,760)		(11,580)
Other comprehensive (loss) /income
Foreign currency translation adjustments	313		(884)		(137)		2,145		(546)		(85)
Total other comprehensive (loss) /income	313		(884)		(137)		2,145		(546)		(85)
Total comprehensive loss	(79,012)		(35,188)		(5,450)		(173,100)		(75,306)		(11,665)
Net loss/(income) attributable to non-controlling interests	(155)		233		36		390		1,160		180
Comprehensive loss attributable to 36Kr Holdings      Inc.'s ordinary shareholders	(79,167)		(34,955)		(5,414)		(172,710)		(74,146)		(11,485)
Net loss per ordinary share (RMB)
Basic	(0.078)		(0.033)		(0.005)		(0.171)		(0.072)		(0.011)
Diluted	(0.078)		(0.033)		(0.005)		(0.171)		(0.072)		(0.011)
Net loss per ADS (RMB)
Basic	(1.946)		(0.834)		(0.129)		(4.280)		(1.794)		(0.278)
Diluted	(1.946)		(0.834)		(0.129)		(4.280)		(1.794)		(0.278)
Weighted average number of ordinary shares used in      per share calculation
Basic	1,021,075,312		1,024,200,699		1,024,200,699		1,021,369,649		1,026,791,094		1,026,791,094
Diluted	1,021,075,312		1,024,200,699		1,024,200,699		1,021,369,649		1,026,791,094		1,026,791,094
Weighted average number of ADS used in per ADS      calculation
Basic	40,843,012		40,968,028		40,968,028		40,854,786		41,071,644		41,071,644
Diluted	40,843,012		40,968,028		40,968,028		40,854,786		41,071,644		41,071,644

 

 

36Kr Holdings Inc.
UNAUDITED RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS
	Three Months Ended						Six Months Ended
	June 30, 2020		June 30, 2021		June 30, 2021		June 30, 2020		June 30, 2021		June 30, 2021
	RMB'000		RMB'000		US$'000		RMB'000		RMB'000		US$'000
Net loss	(79,325)		(34,304)		(5,313)		(175,245)		(74,760)		(11,580)
Share-based compensation expenses	12,588		3,332		516		25,597		5,999		929
Non-GAAP adjusted net loss	(66,737)		(30,972)		(4,797)		(149,648)		(68,761)		(10,651)
Interest income, net	(223)		(236)		(37)		(782)		(341)		(53)
Income tax expenses/(credit)	85		1		-		(5)		(5)		(1)
Depreciation and amortization expenses	1,334		652		101		2,564		1,306		202
Non-GAAP adjusted EBITDA	(65,541)		(30,555)		(4,733)		(147,871)		(67,801)		(10,503)

 

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SOURCE 36Kr Holdings Inc.

FAQ

What were the total revenues for 36Kr Holdings in Q2 2021?

Total revenues for Q2 2021 were RMB72.1 million (US$11.2 million), down from RMB76.7 million in Q2 2020.

How much did the online advertising revenue increase in Q2 2021 for KRKR?

Online advertising revenue increased by 65.1% to RMB51.7 million (US$8.0 million) in Q2 2021.

What was the net loss for 36Kr Holdings in Q2 2021?

The net loss for Q2 2021 was RMB34.1 million (US$5.3 million), reduced from RMB79.5 million in the same period last year.

What was the gross profit margin for KRKR in Q2 2021?

The gross profit margin for Q2 2021 was 57.4%, compared to 29.0% in Q2 2020.

What growth did 36Kr Holdings achieve in average monthly page views?

Average monthly page views increased by 69.5% year-over-year to reach 846.3 million in Q2 2021.