Following its first annual loss since going public in 2024, Kunlun Tech Co.,Ltd. (300418) continued to face challenging performance in its 2025 interim results. On August 23, Kunlun Tech released its 2025 interim report showing the company recorded an attributable net loss of approximately 856 million yuan in the first half, representing a widening loss year-on-year. Additionally, the company's sales expenses reached approximately 1.83 billion yuan in the first half, surging 95.57% compared to the same period last year. Notably, during the reporting period, Kunlun Tech's overseas revenue proportion climbed significantly, growing 56.02% year-on-year and accounting for 92.17% of total revenue.
According to the financial report, Kunlun Tech achieved operating revenue of approximately 3.73 billion yuan in the first half of this year, up 49.23% year-on-year. The corresponding attributable net loss was approximately 856 million yuan, compared to a loss of about 389 million yuan in the same period last year, indicating a widening loss. The adjusted net loss after extraordinary items was approximately 859 million yuan, compared to 407 million yuan in the previous year, also showing increased losses.
However, Kunlun Tech stated that through improved operational efficiency, optimized resource allocation, and strengthened investment management, the company's quarterly loss amount decreased significantly in Q2 with substantially narrowed loss margins, meeting annual operational expectations.
Established in 2008, Kunlun Tech was listed on the Shenzhen Stock Exchange ChiNext board in 2015. The company's main businesses include AGI and AIGC services, overseas information distribution and metaverse operations, and investment activities. Notably, in the first half of this year, Kunlun Tech's overseas revenue proportion increased substantially, with overseas revenue reaching 3.44 billion yuan, up 56.02% year-on-year, representing 92.17% of total revenue, an increase of 4 percentage points compared to the previous year. The company's overseas operations primarily target Europe, America, Southeast Asia, Middle East, and Africa.
The interim report showed that among Kunlun Tech's main business segments, the short-form drama platform generated operating revenue of approximately 583 million yuan in the first half with a gross margin of 83.09%. The advertising business achieved operating revenue of approximately 1.43 billion yuan, up 61.05% year-on-year, with a gross margin of 44.58%, down 8.48% compared to the previous year. Opera search operations generated approximately 691 million yuan in operating revenue, up 10.89% year-on-year, with a gross margin of 95.37%. The overseas social networking business recorded operating revenue of approximately 520 million yuan, up 10.2% year-on-year, with a gross margin of 74.58%, declining 12.95% compared to the previous year.
According to the financial report, within the short-form drama segment, Kunlun Tech's DramaWave platform maintained strong growth momentum. Benefiting from a diversified distribution model combining "paid + free" approaches, DramaWave effectively covers global user groups across different consumption levels. By the end of the reporting period, the platform's annualized revenue run rate (ARR) exceeded $240 million (monthly transaction volume surpassed $20 million), demonstrating strong commercialization potential and providing a solid foundation for sustainable platform growth.
From the first-half financial data perspective, Kunlun Tech's sales expenses were particularly notable. The company's sales expenses reached approximately 1.83 billion yuan in the first half of this year, compared to about 934 million yuan in the same period last year, representing a 95.57% increase. Regarding the reason for sales expense changes, Kunlun Tech explained that this was primarily due to increased marketing and channel costs during the reporting period.
Industry expert Yuan Shuai explained that the substantial increase in sales expenses indicates the company may be actively expanding its market presence. Increased sales investment can enhance product visibility and market share to some extent. However, it may also compress profit margins. If sales expense growth fails to generate expected revenue increases, or if revenue growth cannot offset the rise in sales costs, the company could face financial constraints.
It's worth noting that the 2024 annual report showed Kunlun Tech recorded its first annual net loss since listing. On April 26 this year, the company released its 2024 annual report showing operating revenue of approximately 5.66 billion yuan, up 15.2% year-on-year, while recording an attributable net loss of approximately 1.60 billion yuan, turning from profit to loss. The adjusted net loss after extraordinary items was approximately 1.64 billion yuan, also representing a shift from profit to loss.
Comments