Kuaishou Technology's losses narrowed in the first quarter, as revenue rose across business segments.
The Chinese internet company on Monday posted net loss of 873 million yuan ($124.6 million), narrowing from loss of CNY6.25 billion a year earlier.
Revenue rose 20% to CNY25.22 billion, mainly driven by a 51% surge in Kuaishou's other-services segment, which primarily consists of e-commerce operations.
First Quarter 2023 Key Highlights
Average DAUs on Kuaishou APP were 374.3 million, representing an increase of 8.3% from 345.5 million for the same period of 2022.
Average MAUs on Kuaishou APP were 654.4 million, representing an increase of 9.4% from 597.9 million for the same period of 2022.
Total e-commerce GMV was RMB224.8 billion, representing an increase of 28.4% from RMB175.1 billion for the same period of 2022.
Total revenue increased by 19.7% to RMB25.2 billion from RMB21.1 billion for the same period of 2022. Online marketing services and live streaming contributed 51.8% and 37.0%, respectively, to the total revenue. The other 11.2% came from other services.
Gross profit increased by 33.4% to RMB11.7 billion from RMB8.8 billion for the same period of 2022. Gross profit margin in the first quarter of 2023 was 46.4%, improving from 41.7% for the same period of 2022.
Adjusted net profit was RMB42 million, compared to adjusted net loss(2) of RMB3.7 billion for the same period of 2022.
Operating profit from the domestic segment(3) was RMB963 million, compared to an operating loss(3) of RMB1.5 billion for the same period of 2022.
Mr. Cheng Yixiao, Co-founder and Chief Executive Officer of Kuaishou said, "We delivered strong results in the first quarter of 2023 with positive adjusted net profit at the group level for the first time since our listing. Our significant breakthrough in profitability was achieved on the back of record level user metrics, revenue growth and operating efficiency improvement. Our total revenue reached RMB25.2 billion, growing 19.7% year-over-year in the first quarter of 2023, driven by further advancements in breadth and depth across our user, traffic and commercialization ecosystems. DAUs and MAUs on the Kuaishou App continued to grow, reaching record highs of 374.3 million and 654.4 million, respectively. As we move through 2023, we will continue to leverage technology to deliver high-quality experiences and services to our users and empower content creators, advertisers and merchants while at the same time unlocking monetization potential throughout our vast and vibrant ecosystems to ultimately create long-term value for our stakeholders and shareholders."
First Quarter 2023 Financial Review
Revenue from our online marketing services increased by 15.1% to RMB13.1 billion for the first quarter of 2023, from RMB11.4 billion for the same period of 2022, primarily attributable to the growth in the number of advertisers and increased spending from advertisers, especially from our e-commerce merchants, driven by our efforts to further strengthen our data infrastructure, optimize our product capabilities and refine our industry-specific management strategies.
Revenue from our live streaming business increased by 18.8% to RMB9.3 billion for the first quarter of 2023, from RMB7.8 billion for the same period of 2022, as a result of a 6.4% year-over-year growth in MPUs, which was supported by our enriched content supply, evolving collaboration strategy with talent agencies, and continuous optimization of our live streaming ecosystem and algorithms.
Revenue from our other services increased by 51.3% to RMB2.8 billion for the first quarter of 2023, from RMB1.9 billion for the same period of 2022, primarily due to the growth of our e-commerce business, evidenced by the growth in our e-commerce GMV and continuous improvement in our business strategy in e-commerce. The growth in e-commerce GMV was primarily driven by increases in the number of monthly active e-commerce paying users, average order price and monthly ordering frequency.
Other Key Financial Information for the First Quarter of 2023
Operating loss was RMB698 million, significantly narrowed from RMB5.6 billion for the same period of 2022.
Adjusted EBITDA(4) was RMB2.0 billion, compared to adjusted EBITDA of negative RMB1.6 billion for the same period of 2022.
Total available funds(5) reached RMB44.8 billion as of March 31, 2023.
Notes:
(1) Placed on or directed to our partners through our platform.(2) We define "adjusted net profit/(loss)" as loss for the 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 period adjusted by income tax expenses, depreciation of property and equipment, depreciation of right-of-use assets, amortization of intangible assets, and finance (income)/expense, 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
In the first quarter of 2023, we recorded group level adjusted net profit for the first time since our listing on the Stock Exchange in 2021, representing a significant breakthrough in our profitability. This milestone was achieved on the back of a strong first quarter performance driven by new records in user metrics, revenues growth and efforts in operating efficiency improvement.
In addition to healthy growth in our DAUs and MAUs, we continued to grow the number of content creators, advertisers and merchants on our platform while promoting a more integrated commercialization and traffic ecosystem. We also made substantial progress with our store-wide ROI strategy in driving end-to-end sales funnel conversion for both advertising and e-commerce businesses. As a result of these, combined with macro-economic tailwinds, our revenue growth accelerated across all three business segments (online marketing services, e-commerce and live streaming) in the first quarter of 2023 and outperformed their respective industries.
Our success in enhancing monetization and operating efficiency while maintaining our pace of business growth played a pivotal role in our profitability turnaround. Our domestic business delivered an operating profit for the fourth consecutive quarter, while the operating loss in our overseas segment also narrowed by 45.1% quarter-over-quarter, leading to an adjusted net profit at the group level in the first quarter of 2023.
