$KUAISHOU-W(01024)$ announced its Q3 2024 results, which in total reflected Fastwitch's strong performance in user growth, advertising revenue and e-commerce business, with revenue up 11.4% year-on-year to CNY31.1 billion and adjusted net profit up 24.4% year-on-year to CNY3.9 billion, which exceeded the market's expectations.
Financial Data and Market Expectations
According to the earnings report released by Racer, the key financial data for the third quarter of 2024 are as follows:
Total revenue: 31.1 billion yuan, up 11.4% year-over-year
Adjusted net profit: 3.9 billion yuan, up 24.4% year-on-year
Total e-commerce turnover (GMV): 334.2 billion yuan
The market generally expected Racer's revenue growth to be around 10% and net profit growth to be around 20%, so the actual figures were basically in line with the market's expectations, with a slightly higher-than-expected increase in net profit.
Business Performance
User Growth
The average number of DAUs exceeded 400 million, a year-on-year increase of 5.4%, mainly due to the company's innovative strategies in user retention and new user acquisition, with notable contributions from overseas, especially in the Brazilian market, where daily active users grew significantly year-on-year.With the increase in the number of users, Shutterstock was able to attract more advertisers and e-commerce sellers, thus further driving revenue growth.
Advertising Revenue
Advertising revenue amounted to RMB17.6 billion, up 20% year-on-year, thanks to the improved efficiency of ad placement through AI technology.The optimization of intelligent placement capabilities and algorithms drove the increase in marketing customer consumption, the rapid growth of the out-circulating advertising business, and over 300% year-on-year growth in the consumption of short drama marketing.The overall advertising performance in Q3 was good due to the Olympics-related content and overlaid with the peak summer vacation customer acquisition season.Quick Hand is effectively utilizing its technological advantages to enhance advertising effectiveness and attract more brand cooperation.
E-commerce Business
The e-commerce business continued to grow strongly, with total transaction value (GMV) up 15.1% year-on-year to 334.2 billion yuan.The number of monthly active buyers grew 12.2% year-on-year to 133 million.Small and medium-sized merchants exceeded expectations, with the number of new merchants growing by more than 30% year-over-year and the number of product categories growing by more than 20% year-over-year.Pan-shelf e-commerce GMV continued to grow, raising its share of total e-commerce GMV to 27.0%.GMV of short video-led live-streaming transactions grew nearly 40% YoY, showing the huge potential brought by the combination of short video and e-commerce.
Live Streaming Business
Revenue from the live broadcast business was RMB9.3 billion, but the rate of decline narrowed from the previous year, indicating that the trend of professionalization and institutionalization of anchors is being strengthened, and the refined operation capability of cooperative guilds is also being improved.
Investment highlights
Exceeded expectations
Expanded user base: Shutterstock continued to optimize user experience and content recommendation algorithms, attracting more user retention.
Improved advertising effect: the accuracy of advertisement placement was improved through AI technology, attracting more advertisers to invest.
Rapid development of e-commerce business: emerging modes such as live streaming with goods have been favored by consumers, driving the rapid growth of e-commerce business.
Points of Concern
Increased competitive pressure in certain core markets may affect future user growth and revenue performance.In addition, content creators and advertisers may face more restrictions as regulatory policies change, which could also have an impact on future performance.And guidance for Q4 and next year is also critical.It needs to be watched:
User growth trends
Advertising revenue and e-commerce business performance
AI Strategy Implementation Effectiveness
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