Shulou(Shulou.com)11/24 Report--

Last night, Kuaishou released its third quarter 2022 results. According to the financial report, the company's revenue in the third quarter was 23.13 billion yuan, an increase of 12.9% over the same period last year, with an estimated loss of 22.56 billion yuan, while an adjusted net loss of 671.9 million yuan and an estimated loss of 1.74 billion yuan.

In terms of revenue structure, online marketing service revenue, which accounts for half of the revenue, rose 6.2% year-on-year, the lowest since listing, while live broadcast revenue and e-commerce revenue maintained steady growth. From the profit point of view, Kuaishou domestic business achieved two consecutive quarters of profits, overseas business losses further narrowed, but Kuaishou has yet to achieve overall profit.

Advertising revenue growth slowed, revenue growth innovation was low this quarter, Kuaishou achieved revenue of 23.13 billion yuan, exceeding outside expectations, in the face of the challenges of the external environment, still achieved 12.9% year-on-year growth.

However, Kuaishou's revenue growth in the quarter also hit the lowest since its listing, mainly due to a slowdown in revenue growth from online marketing services. Among them, online marketing services (that is, advertising), live streaming and other services (including e-commerce) accounted for 50.1%, 38.7% and 11.2% of the revenue, respectively.

In the third quarter, Kuaishou's online marketing service revenue was 11.6 billion yuan, an increase of 6.2% over the same period last year, and the growth rate fell to single digits for the first time. Kuaishou said in the financial report that the macroeconomic headwind superimposed a variety of external factors, putting pressure on Kuaishou and participants in the online advertising industry, resulting in a slowdown in the year-on-year growth of online marketing service revenue in the third quarter.

However, through the introduction of more advertisers through multiple channels and the implementation of supportive policies, the number of monthly active users of Kuaishou increased by more than 65% in the third quarter compared with the same period last year. At the same time, continue to improve the ability of commercial products, tap users' business interests, and accelerate the establishment of a positive cycle of user content ecology and business ecology. Through traffic strategy iteration, conversion link and algorithm optimization, the delivery effect is continuously improved, and the retention rate of advertisers continues to improve.

Live broadcast revenue and e-commerce revenue have maintained steady growth.

In the third quarter, the revenue of Kuaishou live broadcast business was 8.9 billion yuan, an increase of 15.8% over the same period last year. Kuaishou said that this is due to the continuous strengthening of the operation of the live broadcast business. Further enrich and enhance the interactive form of the live broadcast platform to better meet the social needs of users; at the same time, through the algorithm to build a user lifecycle management mechanism to improve the conversion rate of live broadcast payment. In the third quarter, the average monthly payment users of Kuaishou app live streaming business increased by 29.3% to 59.6 million compared with the same period last year, and the monthly payment rate of live streaming continued to increase compared with the same period last year.

In terms of e-commerce business, in the third quarter, Kuaishou e-commerce GMV increased by 26.6% compared with the same period last year to 222.5 billion yuan. Relying on the advantages of traffic and efficiency, as well as the continuous improvement of investment policies, Kuaishou continues to attract more businesses, and the number of new stores has increased by nearly 80% compared with the same period last year. In addition to live room scenarios, with the expansion of short video recommendation and other methods, the penetration and conversion rate of Kuaishou e-commerce continued to improve, with more than 100 million monthly active users and a year-on-year increase in user repurchase rate of about 1.1 percentage points.

In order to make profits at home, overseas still need to increase revenue, cut costs and increase efficiency in order to achieve profits, which is the main theme of Kuaishou this year.

In the second quarter of this year, Kuaishou showed its domestic and overseas operations separately in its performance report for the first time. Among them, the domestic business made a single-quarter profit for the first time, with an operating profit of more than 93 million yuan, compared with an operating loss of 1 billion yuan in the same period in 2021.

In the current quarter, Kuaishou's sales and marketing expenses decreased to 9.1 billion yuan from 11 billion yuan in the same period last year, accounting for 39.5% of income from 53.8%. After listing, the ratio was less than 40% for the first time; bandwidth and server costs decreased from 1.95 billion yuan in the same period last year to 1.65 billion yuan, accounting for 7.1% of income; and employee welfare expenditure also decreased to 5.4 billion yuan from 6.1 billion yuan in the same period last year.

Under the cost reduction, Kuaishou once again made a quarterly profit in its domestic business, with an operating profit of more than 375 million yuan, a nearly three-fold increase over the previous month.

In the overseas business, revenue growth has been achieved while losses have narrowed. In the third quarter, Kuaishou's overseas revenue was 189 million yuan, an increase of about 83% from the previous month and an increase of more than eight times over the same period last year. The operating loss narrowed to 1.69 billion yuan from 2.85 billion yuan in the same period last year.

Under domestic profits and overseas losses, Kuaishou's overall adjusted net loss in the third quarter was 670 million yuan, which was significantly smaller than the adjusted net loss of 4.8 billion yuan in the same period last year. The adjusted net loss rate narrowed to 2.9%, an improvement of nearly 20 percentage points over the same period last year.

Judging from the situation of each quarter over the years, Kuaishou's adjusted net loss in this quarter has reached the lowest level since its listing, which is one step closer to achieving overall profits.

Kuaishou pointed out in the financial report that it will strive to improve the operational efficiency of overseas business and gradually establish the profitability of overseas business by increasing revenue and reducing expenditure at the same time.

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