Source: Wall Street News
Author: Ge Jiaming
Kuaishou's revenue for the first quarter was 25.22 billion yuan, and the market forecast was 24.51 billion yuan; the number of users reached a new high, with an average DAU of 374 million in the first quarter. The core artery of Kuaishou-driven growth - e-commerce GMV increased 28.4% year-on-year in the first quarter to 224.8 billion yuan.
After the Hong Kong stock market on May 22, Kuaishou released its results for the first quarter of 2023. Financial reports showed that Kuaishou achieved overall profit at the group level for the first time since listing. Revenue for the first quarter of this year exceeded expectations, and total e-commerce transaction volume (GMV), the core artery driving growth, increased 28.4% year-on-year to 224.8 billion yuan.
However, this is mainly due to the continuous growth of users. The number of Kuaishou users reached a new high in the first quarter of this year, and the average daily usage time of the average daily users, the average monthly users, and the average daily active user all soared.
Revenue exceeded expectations and increased 19.7% year over year
Financial reports show that Kuaishou's total revenue increased 19.7% year-on-year to 25.22 billion yuan, exceeding market expectations of 24.5 billion yuan. The adjusted EBITDA was 2 billion yuan, compared to a negative 1.6 billion yuan for the same period in 2022.
Online marketing services, live streaming, and other services (including e-commerce) contributed 51.8%, 37.0%, and 11.2% of revenue, respectively.
Since listing, Kuaishou has achieved overall profit at the group level (domestic+overseas) for the first time, with adjusted net profit reaching 42 million yuan. According to the data, Kuaishou's domestic business has achieved operating profit for the fourth consecutive quarter, while overseas operating losses in the first quarter narrowed 45.1% month-on-month. The loss reduction trend is obvious.
Gross profit rose from 8.8 billion yuan in the same period in 2022 to 11.7 billion yuan, an increase of 33.4%. Gross margin increased to 46.4% from 41.7% in the same period in 2022.
Q1 ad revenue increased 15.1% year over year
Judging from the specific business revenue, the advertising business is still Kuaishou's largest source of revenue.Advertising revenue in the first quarter increased 15.1% year-on-year to 13.06 billion yuan, accounting for 51.8% of total revenue, but was slower than 15.09 billion yuan in the previous quarter.
Brand advertising revenue increased more than 20% year over year for the second consecutive quarter. Growth in recent quarters was mainly driven by e-commerce related internal circulation advertising.
Looking at live streaming revenue, in the first quarter, live streaming revenue increased 18.8% year-on-year to 9.3 billion yuan, but lower than the previous quarter's 10 billion yuan. Kuaishou pointed out in its financial report that this increase benefited from the year-on-year increase in average monthly paying users and the average revenue of monthly paying users.
Looking at revenue from other services (including e-commerce), it increased 51.3% year-on-year to 2.83 billion yuan over the same period last year, but was lower than the 3.16 billion yuan in the previous quarter, and the e-commerce business continued to grow at a high level.
Total e-commerce transaction volume (GMV) increased 28.4% year-on-year to 224.8 billion yuan. The average number of participating brands per month increased by about 30% year over year, and brand self-broadcast GMV increased by about 70% year over year. The number of monthly active e-commerce buyers and customer unit prices continued to increase year over year, and the frequency of monthly orders placed increased year over year.
The increase in total e-commerce product transactions is mainly due to the increase in the number of monthly active paying users of e-commerce platforms, the rise in customer unit prices, and the increase in the frequency of monthly orders.
Kuaishou pointed out that the total number of e-commerce product transactions generated by searches doubled year-on-year in the first quarter, and search advertising revenue increased by more than 50% year-on-year.
The number of users reached a new high
The number of Kuaishou users is still expanding and reaching new highs, and there is no particularly obvious competitive influence in terms of trends for the time being.
Financial reports show that the average daily active user (DAU) increased 8.3% year over year to 374 million, and the average monthly active user (MAU) increased 9.4% year over year to 654 million, with an estimated 640 million. User stickiness (DAU/MAU) reached 57.1%, which is basically the same as the previous quarter, and overall platform traffic (total average daily user time). The average daily usage time of each daily active user was 126.8 minutes, down from 134 minutes in the previous quarter.
On the basis of the growth of high-quality users, Kuaishou's community vitality continues to increase. As of the first quarter of this year, the total number of mutually interested users reached 29.6 billion pairs, an increase of 57.6% over the previous year. Additionally, the total number of views of short videos and live content increased by more than 10% year over year.
Improving quality and efficiency is still the theme
Significant losses in the first quarter were mainly due to layoffs and reduced outsourcing.
Financial reports show that Kuaishou's sales and marketing expenses in the first quarter of this year fell 8.1% from 9.5 billion yuan in the same period of 2022 to 8.7 billion yuan in the first quarter of 2023. Its percentage of total revenue fell from 45.0% in the same period of 2022 to 34.6% in the first quarter of 2023.
R&D expenditure in the first quarter also continued the trend of the fourth quarter, falling 17.1% from 3.5 billion yuan in the same period in 2022 to 2.9 billion yuan. This is mainly due to a reduction in employee benefit expenses, including related share-based compensation expenses. Meanwhile, promotion expenses for the first quarter were reduced compared to last year.
Revenue share increased significantly compared to the same period last year. Revenue sharing generally includes the share of live streaming rewards from Kuaishou platform influencers and the share of advertiser orders.
Cheng Yixiao, founder and CEO of Kuaishou Technology, said:
“We achieved strong results in the first quarter of 2023. After listing, our net profit was corrected for the first time after group-level adjustments, making a major breakthrough in profitability. This is mainly due to the synergy and impetus of our new user metrics, revenue growth, and operational efficiency improvements.
In 2023, we will continue to use technology to bring quality experiences and services to users and empower content creators, advertisers and merchants, while unlocking the monetization potential of our vast and vibrant ecosystem and creating long-term value for our shareholders and ecosystem participants.”
Editor/Somer