Kuaishou Technology Announces Fourth Quarter and Full Year 2023 Financial Results
- Significant increases in DAUs and MAUs on Kuaishou APP in Q4 2023 compared to the same period in 2022.
- Total e-commerce GMV showed growth of 29.3% in Q4 2023 and 31.4% in FY 2023.
- Total revenue increased by 15.1% in Q4 2023 and 20.5% in FY 2023.
- Gross profit margin improved in both Q4 2023 and FY 2023.
- Profit for the period turned positive in Q4 2023 and FY 2023.
- Adjusted net profit saw significant improvement, reaching RMB10.3 billion in FY 2023.
- Operating profit increased in both domestic and overseas segments in Q4 2023 and FY 2023.
- Total available funds reached RMB61.6 billion as of December 31, 2023.
- Strong growth in revenue from online marketing services and live streaming business.
- Continuous optimization of algorithms and refined operation strategies contributed to revenue growth.
- Revenue from other services, including e-commerce, showed significant increases in Q4 2023 and FY 2023.
- None.
Fourth Quarter 2023 Key Highlights
- Average DAUs on Kuaishou APP were 382.5 million, representing an increase of
4.5% from 366.2 million for the same period of 2022. - Average MAUs on Kuaishou APP were 700.4 million, representing an increase of
9.4% from 640.0 million for the same period of 2022. - Total e-commerce GMV(1) was
RMB403 .9 billion, representing an increase of29.3% fromRMB312.4 billion for the same period of 2022. - Total revenue increased by
15.1% toRMB32 .6 billion fromRMB28.3 billion for the same period of 2022. Online marketing services and live streaming contributed55.9% and30.9% , respectively, to the total revenue. The other13.2% came from other services. - Gross profit increased by
34.3% toRMB17 .3 billion fromRMB12 .9 billion for the same period of 2022. Gross profit margin in the fourth quarter of 2023 was53.1% , improving from45.5% for the same period of 2022. - Profit for the period was
RMB3 .6 billion, compared to a loss ofRMB1.5 billion for the same period of 2022. Adjusted net profit(2) wasRMB4.4 billion , compared to adjusted net loss(2) ofRMB45 million for the same period of 2022. - Operating profit from the domestic segment(3) increased to RMB4.3 billion from
RMB1.3 billion for the same period of 2022. Operating loss from the overseas segment(3) decreased toRMB0.6 billion by63.2% year-over-year.
Full Year 2023 Key Highlights
- Average DAUs on Kuaishou APP were 379.9 million, representing an increase of
6.8% from 355.7 million in 2022. - Average MAUs on Kuaishou APP were 678.2 million, representing an increase of
10.7% from 612.7 million in 2022. - Total e-commerce GMV(1) was
RMB1,184 .4 billion, representing an increase of31.4% fromRMB901.2 billion in 2022. - Total revenue increased by
20.5% toRMB113 .5 billion fromRMB94.2 billion in 2022. Online marketing services and live streaming contributed53.1% and34.4% , respectively, to the total revenue. The other12.5% came from other services. - Gross profit increased by
36.2% toRMB57 .4 billion fromRMB42 .1 billion in 2022. Gross profit margin in 2023 was50.6% , improving from44.7% in 2022. - Profit for the year was
RMB6 .4 billion, compared to a loss ofRMB13.7 billion in 2022. Adjusted net profit(2) wasRMB10.3 billion , compared to adjusted net loss(2) ofRMB5.8 billion in 2022. - Operating profit from the domestic segment(3) increased to RMB11.4 billion from
RMB192.1 million in 2022. Operating loss from the overseas segment(3) decreased toRMB2.8 billion fromRMB6.6 billion in 2022.
Mr. Cheng Yixiao, Co-founder and Chief Executive Officer of Kuaishou, said, "In 2023, we continuously elevated our content and commercial ecosystem, ushering in a new era of sustainable profitability for Kuaishou. Upholding our vision of providing long-term value for users, we cultivated a strong, quality content ecosystem and upgraded our traffic distribution mechanism by incorporating users' experience indicators into our recommendation algorithm. This improved the alignment of our content quality and commercialization efficiency, while better meeting users' needs and fostering high-quality growth on our platform. Users continue to choose Kuaishou, and our MAUs exceeded 700 million in the fourth quarter, marking a new record high. More effective integration of commercial opportunities also led to our strong e-commerce and online marketing services revenues that outshined the overall market's average performance, translating into milestone adjusted net profit exceeding
Fourth Quarter 2023 Financial Review
Revenue from our online marketing services increased by
Revenue from our live streaming business remained stable at
Revenue from our other services increased by
Other Key Financial Information for the Fourth Quarter of 2023
Operating profit was
Adjusted EBITDA(4) was
Full Year 2023 Financial Review
Revenue from our online marketing services increased by
Revenue from our live streaming business increased by
Revenue from our other services increased by
Other Key Financial Information for the Full Year of 2023
Operating profit was
Adjusted EBITDA(4) was
Total available funds(5) reached
Notes:
(1) Placed on or directed to our partners through our platform.
(2) We define "adjusted net profit/(loss)" as profit/(loss) for the year or period adjusted by share-based compensation expenses and net fair value changes on investments.
(3) Unallocated items, which consist of share-based compensation expenses, other income, and other gains/(losses), net, are not included.
(4) We define "adjusted EBITDA" as adjusted net profit/(loss) for the year or period adjusted by income tax expenses, depreciation of property and equipment, depreciation of right-of-use assets, amortization of intangible assets, and finance income, net.
(5) Total available funds included but not limited to cash and cash equivalents, time deposits, financial assets and restricted cash. Financial assets mainly included wealth management products and others.
Business Review
Despite the ongoing external macro challenges in 2023, we remained true to our long-term vision and commitment of creating value for our users and partners by building and maintaining a healthier and more inclusive content and commercial ecosystem. We supported good quality content and broadened recommendations for useful and entertaining content including short video and live streaming, cultivating a good quality content ecosystem. We also continuously deepened the construction of the entertainment live streaming ecosystem by supporting small and medium-level streamers and Chinese traditional cultural streamers to create a healthier and sustainable entertainment live streaming ecosystem. Moreover, we nurtured a more satisfactory e-commerce ecosystem for users by leveraging the scoring system for merchandise, store experience and KOLs' reputation in our e-commerce traffic distribution. We upgraded our traffic distribution mechanism by incorporating users' experience indicators into our recommendation algorithm. This better aligned our content quality and commercialization efficiency. Lastly, we further optimized our organization structure, strengthened the integration of content and commercial ecosystem, and enhanced overall organization efficiency.
As a result of these efforts, our user base repeatedly reached greater heights throughout the year. In the fourth quarter of 2023, average MAUs on the Kuaishou App exceeded 700 million, marking another new record. Additionally, a growing number of e-commerce merchants and marketing clients chose Kuaishou as their go-to platform for long-term operations. This was underscored by over
User and content ecosystem
In the fourth quarter of 2023, we optimized our user growth strategies, built scenarios for user demand insight and explored user interests with refined algorithms. As a result, average DAUs and MAUs on the Kuaishou App reached 382.5 million and 700.4 million, representing a
In terms of user growth, we prioritized acquiring high-value users with high retention potentials to achieve quality growth. By optimizing efficiency in growth from various channels, we continuously reduced the acquisition cost per new user year-over-year. Based on our refined operation strategy, the subsidy cost per DAU of Kuaishou Express declined year-over-year in the fourth quarter of 2023.
Content consumption is the core value provided by Kuaishou App for users. We have successfully built a sustainable content supply ecosystem that identifies and magnifies advantageous content featuring distinctive Kuaishou characteristics. The short play industry, for example, is an area in which Kuaishou has always been a pioneer and leader. As of the end of 2023, we launched almost 1,000 short plays produced by Kuaishou Astral Short Plays (快手星芒短劇) , including more than 300 blockbusters each of which received more than 100 million views. In addition, we have also introduced tens of thousands of short plays for subscription produced by third parties. We created a superior native user experience by building our self-developed sales funnel conversion path, and drove the rapid growth of both supply and demand sides through efficient traffic distribution. In the fourth quarter of 2023, heavy users of short plays, who watched over 10 episodes a day, reached 94 million, representing a year-over-year increase of over
For our search business, we improved the construction of the "search after watching" scenario and increased the weight of social relationships and useful content in the ranking of searching results. In this way, we enhanced search user penetration and search experience. In the fourth quarter of 2023, Kuaishou search's average monthly users increased by more than
Online marketing services
In the fourth quarter of 2023, revenue from online marketing services grew by
In the fourth quarter of 2023, native marketing services remained the major driver of our online marketing revenue growth. We unveiled new features for our omni-platform marketing solution, including in-placement analysis, post-placement review and real-time material analysis. These enhancements further helped merchants leverage our high-quality traffic and maximize their GMV across our platform. In the fourth quarter of 2023, merchants' consumption on omni-platform marketing solutions soared by more than
In the fourth quarter of 2023, the year-over-year revenue growth rate of our external performance marketing services continued to increase, compared with the third quarter of 2023. This was particularly evident in industries such as media information, education and training, and gaming. For example, for paid short plays in the media information industry, we consistently optimized our self-developed sales funnel conversion path, where we created a higher-quality short play ecosystem and enhanced user experience. Meanwhile, we improved our real-time forecasting model through algorithms, which fortified users' willingness to pay as well as stimulated marketing clients' inclination to place advertisements on our platform. In the fourth quarter of 2023, the marketing consumption of the paid short play vertical increased by more than three-fold year-over-year. To enhance our product capabilities, we rolled out the Universal Auto Ads for Leads (UAL, 線索全自動營銷產品) while leveraging AIGC to improve production efficiency and quality of marketing materials. This provided our clients with smart marketing capabilities for targeted demographics. To promote native marketing materials, we reinforced the integration of native marketing content and organic content in terms of underlying data and traffic synergy, achieving a true "marketing as content" approach. In the fourth quarter of 2023, the consumption of external native marketing materials increased by more than
Our brand marketing revenue grew by over
E-commerce
In the fourth quarter of 2023, our e-commerce GMV maintained a rapid growth rate of
On the user side, in the fourth quarter of 2023, the average number of MPUs reached a new high, exceeding 130 million, with the MAU penetration rate increasing to
On the supply side, more than one million merchants participated in the Double 11 Sales Promotion. The high participation level accelerated growth in the number of monthly active merchants by over
Regarding brands, we maintained robust growth in the fourth quarter of 2023. During the sales promotion period, GMV from brands increased by
In terms of e-commerce scenarios, we continued to fortify the infrastructure of our e-commerce ecosystem, laying a solid foundation for exploring and further meeting user demand. Meanwhile, we also made significant strides in the shelf-based and short video e-commerce realm.
In the fourth quarter of 2023, the growth of shelf-based e-commerce GMV outpaced that of our overall platform, accounting for more than
Short video e-commerce GMV grew rapidly in the fourth quarter of 2023 and more than doubled year-over-year. This was mainly attributable to an enriched short video supply and improved content quality. During the pre-sale period of the Double 11 Sales Promotion, merchants expanded their exposure through short video, setting new pre-sale GMV records. Throughout the promotion period, merchants created blockbusters by leveraging both short video and live streaming. After the promotion, live-streaming highlights were used as steady and high-quality e-commerce content that was widely disseminated to convert more viewers into buyers.
With respect to the infrastructure of our e-commerce ecosystem, we strengthened our pricing capabilities in the fourth quarter of 2023. Incorporating pricing signals into short video and shelf-based e-commerce scenarios, we improved the display of highly cost-effective merchandise. This further boosted our platform's efficiency and optimized user experience. Meanwhile, we stepped up our efforts to refine labeling for new merchandise and blockbusters, and upgraded the three-score system, which heightened traffic allocation efficiency.
Live streaming
In the fourth quarter of 2023, revenue from our live streaming business remained stable year-over-year, increasing by
We continued to explore and cultivate good quality live-streaming content and streamers, carving out Kuaishou's distinctive characteristics under robust category operations. We strongly supported key categories of traditional culture, such as opera and folk music. In 2023, the number of traditional cultural streamers, including those involved in intangible cultural heritage inheritance, exceeded 190,000. Additionally, at the 2023 Annual Grand Ceremony, we expanded multi-dimensional tracks, established growth pathways for streamers, and extended coverage to more mid-tier streamers. The proportion of streamers with professional talents and abilities has consistently increased, demonstrating greater long-term ecosystem value.
As a prime example of our "live streaming+" services empowering traditional industries, Kwai Hire experienced an increase of over
Overseas
In the fourth quarter of 2023, we continued advancing our strategy focused on key overseas markets. DAUs and user time spent in core overseas markets such as
On the overseas online marketing services front, we focused on deep industry cultivation at the content level and fostered the development of key industries and localized capabilities. We continued to advance the development and enhance our product ecosystem with a focus on bid products, live streaming traffic and original content, stimulating rapid growth of revenue and consumption for clients across multiple industries, such as e-commerce and gaming. In the fourth quarter of 2023, online marketing revenue of our overseas business increased by over
Corporate social responsibilities
The digital economy has become a key driver of high-quality growth in
As of the end of 2023, we facilitated over 40.2 million job opportunities. In addition, our Kwai Hire conducted 5.5 million live streaming sessions in 2023, which significantly enhanced recruitment efficiency and helped more users find jobs. According to the "Report on the Role of the Short Video and Live Streaming Ecosystem in Fostering New Professions and Promoting High-quality Full Employment" published by the Ministry of Human Resources and Social Security in November 2023, the short video and live streaming ecosystem exemplified by platforms such as Kuaishou has created and cultivated 174 new job categories. These include career positions such as "Internet Recruitment Specialist" and "Real Estate Live Streaming Agents".
Looking ahead, we are committed to harnessing our evolving content and commercial ecosystem to promote the digital evolution and upgrade of traditional jobs. By embracing new business formats, we will introduce new professions, facilitating and solidifying high-quality employment. Through these efforts, we aim to meaningfully contribute to the development of the digital economy.
Business Outlook
As we move forward, our commitment to progress across our multiple growth engines remains steadfast. We will be dedicated to enhancing our infrastructure, algorithms, content and commercial scenarios.
Despite ongoing macro challenges, we are doubling down on internal efforts to optimize cost structure and improve our operating efficiency, gearing up for improved economic conditions that enable us to swiftly unlock potential and achieve faster development. Upholding our founding aspiration to enable everyone to be seen, we will continue to provide our users good content and valuable services. At the same time, we will strive to create greater economic value for our partners, thereby unleashing the energy and vitality of our unique, trust-based content and commercial ecosystem.
About Kuaishou
Kuaishou is a leading content community and social platform with its mission to be the most customer-obsessed company in the world. Kuaishou has relentlessly been focusing on serving its customers and creating value for them through the continual innovation and optimization of its products and services. At Kuaishou, any user can chronicle and share their life experiences through short videos and live streams and showcase their talents. Working closely with content creators and businesses together, Kuaishou provides product and service offerings that address various user needs that arise naturally, including entertainment, online marketing services, e-commerce, online games, online knowledge-sharing, and more.
Forward-Looking Statements
Certain statements included in this press release, other than statements of historical fact, are forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "may", "might", "can", "could", "will", "would", "anticipate", "believe", "continue", "estimate", "expect", "forecast", "intend", "plan", "seek", or "timetable". These forward-looking statements, which are subject to risks, uncertainties, and assumptions, may include our business outlook, estimates of financial performance, forecast business plans, growth strategies and projections of anticipated trends in our industry. These forward-looking statements are based on information currently available to the Group and are stated herein on the basis of the outlook at the time of this press release. They are based on certain expectations, assumptions and premises, many of which are subjective or beyond our control. These forward-looking statements may prove to be incorrect and may not be realized in the future. Underlying these forward-looking statements are a large number of risks and uncertainties. In light of the risks and uncertainties, the inclusion of forward-looking statements in this press release should not be regarded as representations by the Board or the Company that the plans and objectives will be achieved, and investors should not place undue reliance on such statements. Except as required by law, we are not obligated, and we undertake no obligation, to release publicly any revisions to these forward-looking statements that might reflect events or circumstance occurring after the date of this press release or those that might reflect the occurrence of unanticipated events.
For investor and media inquiries, please contact
Kuaishou Technology
Investor Relations
Email: ir@kuaishou.com
CONDENSED CONSOLIDATED INCOME STATEMENT | ||||||||||
Unaudited | Audited | |||||||||
Three Months Ended | Year Ended | |||||||||
December 31, 2023 | September 30, 2023 | December 31, 2022 | December 31, 2023 | December 31, 2022 | ||||||
RMB'Million | RMB'Million | RMB'Million | RMB'Million | RMB'Million | ||||||
Revenues | 32,561 | 27,948 | 28,293 | 113,470 | 94,183 | |||||
Cost of revenues | (15,269) | (13,495) | (15,417) | (56,079) | (52,052) | |||||
Gross profit | 17,292 | 14,453 | 12,876 | 57,391 | 42,131 | |||||
Selling and marketing expenses | (10,198) | (8,939) | (9,740) | (36,496) | (37,121) | |||||
Administrative expenses | (752) | (898) | (1,034) | (3,514) | (3,921) | |||||
Research and development expenses | (3,296) | (2,967) | (3,446) | (12,338) | (13,784) | |||||
Other income | 379 | 434 | 450 | 978 | 1,547 | |||||
Other gains/(losses), net | 197 | 128 | (349) | 410 | (1,410) | |||||
Operating profit/(loss) | 3,622 | 2,211 | (1,243) | 6,431 | (12,558) | |||||
Finance income, net | 135 | 135 | 107 | 539 | 166 | |||||
Share of losses of investments | (23) | (26) | (27) | (81) | (139) | |||||
Profit/(loss) before income tax | 3,734 | 2,320 | (1,163) | 6,889 | (12,531) | |||||
Income tax expenses | (122) | (138) | (384) | (490) | (1,158) | |||||
Profit/(loss) for the period | 3,612 | 2,182 | (1,547) | 6,399 | (13,689) | |||||
Attributable to: | ||||||||||
— Equity holders of the Company | 3,608 | 2,181 | (1,547) | 6,396 | (13,690) | |||||
— Non-controlling interests | 4 | 1 | 0 | 3 | 1 | |||||
3,612 | 2,182 | (1,547) | 6,399 | (13,689) |
CONDENSED CONSOLIDATED BALANCE SHEET | ||||
Audited | Audited | |||
As of December 31, 2023 | As of December 31, 2022 | |||
RMB'Million | RMB'Million | |||
ASSETS | ||||
Non-current assets | ||||
Property and equipment | 12,356 | 13,215 | ||
Right-of-use assets | 10,399 | 10,806 | ||
Intangible assets | 1,073 | 1,123 | ||
Investments accounted for using the equity method | 214 | 268 | ||
Financial assets at fair value through profit or loss | 5,245 | 3,626 | ||
Other financial assets at amortized cost | 283 | 670 | ||
Deferred tax assets | 6,108 | 5,095 | ||
Long-term time deposits | 9,765 | 7,870 | ||
Other non-current assets | 492 | 776 | ||
45,935 | 43,449 | |||
Current assets | ||||
Trade receivables | 6,457 | 6,288 | ||
Prepayments, other receivables and other current assets | 4,919 | 4,106 | ||
Financial assets at fair value through profit or loss | 25,128 | 13,087 | ||
Other financial assets at amortized cost | 950 | 726 | ||
Short-term time deposits | 9,874 | 8,318 | ||
Restricted cash | 128 | 59 | ||
Cash and cash equivalents | 12,905 | 13,274 | ||
60,361 | 45,858 | |||
Total assets | 106,296 | 89,307 |
CONDENSED CONSOLIDATED BALANCE SHEET | ||||
Audited | Audited | |||
As of December 31, 2023 | As of December 31, 2022 | |||
RMB'Million | RMB'Million | |||
EQUITY AND LIABILITIES | ||||
Equity attributable to equity holders of the Company | ||||
Share capital | - | - | ||
Share premium | 273,459 | 274,473 | ||
Treasury shares | (88) | - | ||
Other reserves | 33,183 | 29,239 | ||
Accumulated losses | (257,491) | (263,882) | ||
49,063 | 39,830 | |||
Non-controlling interests | 11 | 8 | ||
Total equity | 49,074 | 39,838 | ||
LIABILITIES | ||||
Non-current liabilities | ||||
Lease liabilities | 8,405 | 8,721 | ||
Deferred tax liabilities | 18 | 23 | ||
Other non-current liabilities | 21 | 16 | ||
8,444 | 8,760 | |||
Current liabilities | ||||
Accounts payables | 23,601 | 22,868 | ||
Other payables and accruals | 16,592 | 10,190 | ||
Advances from customers | 4,036 | 3,240 | ||
Income tax liabilities | 1,222 | 936 | ||
Lease liabilities | 3,327 | 3,475 | ||
48,778 | 40,709 | |||
Total liabilities | 57,222 | 49,469 | ||
Total equity and liabilities | 106,296 | 89,307 |
Financial Information by Segment | ||||||||||||
Unaudited Three Months Ended | ||||||||||||
December 31, 2023 | September 30, 2023 | December 31, 2022 | ||||||||||
Domestic | Overseas | Unallocated items | Total | Domestic | Overseas | Unallocated items | Total | Domestic | Overseas | Unallocated items | Total | |
RMB'Million | RMB'Million | RMB'Million | ||||||||||
Revenues | 31,714 | 847 | - | 32,561 | 27,296 | 652 | - | 27,948 | 28,008 | 285 | - | 28,293 |
Operating profit/(loss) | 4,250 | (551) | (77) | 3,622 | 3,155 | (635) | (309) | 2,211 | 1,267 | (1,499) | (1,011) | (1,243) |
Audited Year Ended December 31, | ||||||||
2023 | 2022 | |||||||
Domestic | Overseas | Unallocated items | Total | Domestic | Overseas | Unallocated items | Total | |
RMB'Million | RMB'Million | |||||||
Revenues | 111,186 | 2,284 | - | 113,470 | 93,558 | 625 | - | 94,183 |
Operating profit/(loss) | 11,402 | (2,789) | (2,182) | 6,431 | 192 | (6,638) | (6,112) | (12,558) |
Reconciliation of Non-IFRS Accounting Standards Measures to the Nearest IFRS Accounting Standards Measures | |||||||||
Unaudited | Unaudited | ||||||||
Three Months Ended | Year Ended | ||||||||
December 31, | September 30, | December 31, | December 31, | December 31, | |||||
2023 | 2023 | 2022 | 2023 | 2022 | |||||
RMB'Million | RMB'Million | RMB'Million | RMB'Million | RMB'Million | |||||
Profit/(loss) for the period | 3,612 | 2,182 | (1,547) | 6,399 | (13,689) | ||||
Add: | |||||||||
Share-based compensation expenses | 653 | 871 | 1,112 | 3,570 | 6,249 | ||||
Net fair value changes on investments(1) | 97 | 120 | 390 | 302 | 1,689 | ||||
Adjusted net profit/(loss) | 4,362 | 3,173 | (45) | 10,271 | (5,751) | ||||
Adjusted net profit/(loss) | 4,362 | 3,173 | (45) | 10,271 | (5,751) | ||||
Add: | |||||||||
Income tax expenses | 122 | 138 | 384 | 490 | 1,158 | ||||
Depreciation of property and equipment | 1,018 | 1,029 | 891 | 3,989 | 3,212 | ||||
Depreciation of right-of-use assets | 732 | 737 | 776 | 3,065 | 3,222 | ||||
Amortization of intangible assets | 33 | 38 | 37 | 148 | 140 | ||||
Finance income, net | (135) | (135) | (107) | (539) | (166) | ||||
Adjusted EBITDA | 6,132 | 4,980 | 1,936 | 17,424 | 1,815 |
Note: |
(1) Net fair value changes on investments represents net fair value (gains)/losses on financial assets at fair value through profit or loss of our investments in listed and unlisted entities, net (gains)/losses on deemed disposals of investments and impairment provision for investments, which is unrelated to our core business and operating performance and subject to market fluctuations, and exclusion of which provides investors with more relevant and useful information to evaluate our performance.
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SOURCE Kuaishou Technology
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