HONG KONG, May 22, 2024 /PRNewswire/ -- Kuaishou Technology ("Kuaishou" or the "Company"; HKD Counter Stock Code: 01024 / RMB Counter Stock Code: 81024), a leading content community and social platform, today announced its unaudited consolidated first quarterly results for the three months ended March 31, 2024. First Quarter 2024 Key Highlights Average DAUs on Kuaishou APP were 393.8 million, representing an increase of 5.2% from 374.3 million for the same period of 2023. Average MAUs on Kuaishou APP were 697.4 million, representing an increase of 6.6% from 654.4 million for the same period of 2023. Total e-commerce GMV(1) was RMB288.1 billion, representing an increase of 28.2% from RMB224.8 billion for the same period of 2023. Total revenue increased by 16.6% to RMB29.4 billion from RMB25.2 billion for the same period of 2023. Online marketing services and live streaming contributed 56.6% and 29.2%, respectively, to the total revenue. The other 14.2% came from other services. Gross profit increased by 37.6% to RMB16.1 billion from RMB11.7 billion for the same period of 2023. Gross profit margin in the first quarter of 2024 was 54.8%, improving from 46.4% for the same period of 2023. Profit for the period was RMB4.1 billion, compared to a loss of RMB876 million for the same period of 2023. Adjusted net profit(2) increased to RMB4.4 billion from RMB42 million for the same period of 2023. Operating profit from the domestic segment(3) increased to RMB4.0 billion from RMB963 million for the same period of 2023. Operating loss from the overseas segment(3) decreased to RMB268 million by 67.4% year-over-year. Mr. Cheng Yixiao, Co-founder, Chairman, and Chief Executive Officer of Kuaishou, said, "Our robust operational and financial performance in the first quarter showcase the powerful economic moat we have created across our user and commercial ecosystems. Strong execution of our high-quality user growth strategy drove steady traffic growth. At the same time, we continued to cultivate a healthy content ecosystem, further integrating AI technology throughout our platform to strengthen experiences in content consumption, shopping and services for our users. This steadily elevated growth in our e-commerce business and improved commercialization efficiency. Our total revenue increased by 16.6% year-over-year in the first quarter, reaching RMB29.4 billion. Our operating strategy centered on improving quality and efficiency also led to increased profitability with our adjusted net profit reaching RMB4.4 billion. Looking ahead, we will continue strengthening our business by leveraging the power of short videos plus live streaming to unlock new growth opportunities. As we continue to harness technology-driven innovation, we believe we can deliver even greater value to our users, partners and shareholders." First Quarter 2024 Financial Review Revenue from our online marketing services increased by 27.4% to RMB16.7 billion for the first quarter of 2024, from RMB13.1 billion for the same period of 2023, primarily attributable to the growth in the number of marketing clients and increased consumption from marketing clients driven by our efforts to promote the application of our smart marketing solution and upgraded omni-platform marketing capabilities. Revenue from our live streaming business decreased by 8.0% to RMB8.6 billion for the first quarter of 2024 from RMB9.3 billion for the same period of 2023, due to our continuing endeavor in further building long-term sustainable live streaming ecosystem. Revenue from our other services increased by 47.6% to RMB4.2 billion for the first quarter of 2024, from RMB2.8 billion for the same period of 2023, primarily due to the growth of our e-commerce business, represented by the growth in our e-commerce GMV. The growth in e-commerce GMV was driven by increases in the number of active e-commerce paying users and active merchants as a result of our continuously refined operating strategies and expanded e-commerce scenarios. Other Key Financial Information for the First Quarter of 2024 Operating profit was RMB4.0 billion, compared to an operating loss of RMB698 million for the same period of 2023. Adjusted EBITDA(4) was RMB6.0 billion, increasing from RMB2.0 billion for the same period of 2023. Total available funds(5) reached RMB63.7 billion as of March 31, 2024. Notes: (1) Placed on or directed to our partners through our platform.(2) We define "adjusted net profit" as profit/(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, net, are not included.(4) We define "adjusted EBITDA" as adjusted net profit for the period adjusted by income tax (benefits)/expenses, depreciation of property and equipment, depreciation of right-of-use assets, amortization of intangible assets, and finance income, net.(5) Total available funds which we considered in cash management 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 We commenced the year with robust operational and financial performance during the first quarter of 2024. In the first quarter of 2024, our total revenue expanded by 16.6% year-over-year to RMB29.4 billion, with a gross profit margin of 54.8%, profit of RMB4.1 billion and profit margin of 14.0%. These results demonstrate the strong resilience of our business and economic moat created by our user and commercial ecosystems despite that the first quarter is a typical slow season for the industry. In the first quarter of 2024, we further rolled out our new traffic recommendation mechanism to all users, aligning improvements in user experience with increased monetization efficiency. Our smart marketing solution empowered marketing clients to improve their performances, attracting increased client budgets. Through our commitment to creating excellent user shopping experience, we have steadily grown our e-commerce business with a dual-drive approach of live-streaming e-commerce and shelf-based e-commerce. We have also continued our efforts to foster a healthier live-streaming ecosystem, laying a solid foundation for the platform's sustainable growth. Moreover, we made steady advances in the research, development and training of our self-developed large language models to empower multiple business scenarios with AI technology, facilitating growth through efficiency gains. User and content ecosystem In the first quarter of 2024, average DAUs and MAUs on the Kuaishou App reached 394 million and 697 million, representing year-over-year increases of 5.2% and 6.6%, respectively. The average daily time spent per DAU on the Kuaishou App was 129.5 minutes. Our user traffic grew steadily in terms of the total user time spent increasing by 8.6% year-over-year in the first quarter of 2024. The increases in our user metrics are the strong testaments of our success in high-quality user growth strategy. By meeting user demand with superior content and continuously elevating user experience, we provide more value to the users on our platform. In terms of user growth, we optimized our user acquisition channel mix, simultaneously combining algorithms to forecast new user retention rates, thereby increasing the ROI of our user growth. Additionally, we implemented several initiatives, such as delving into the diversity of user interest and enhancing ranking strategies of the short videos' comments. These efforts not only improved user experience but also increased user time spent on the platform. In terms of content supply, we nurtured quality creators embodying distinctive Kuaishou characteristics, and created differentiated, high-quality, bespoke Kuaishou IP content for important occasions, incentivizing users to open the Kuaishou App. For example, in celebrating the Year of the Dragon with our nearly 400 million users, we continued "A Taste of Chinese New Year on Kuaishou" activities in 2024 featuring a diverse array of Chinese New Year-themed content. This included Kuaishou 1001 Nights Fans' Gala (快手一千零一夜老鐵聯歡晚會), online festival fairs (雲上廟會) and the Village Basketball Association (村BA). In addition to serving as a stage for creators to showcase their talent, these events also increased users' stickiness on Kuaishou. Meanwhile, during the Spring Festival in 2024, 20 short plays produced by Kuaishou Astral Short Plays (快手星芒短劇) received more than 100 million views each, and seven of which gained over 300 million views each. For our search business, we optimized the search function by leveraging large language model technology and refined the landing page for "search after watching" feature. These initiatives improved user penetration and overall search experience. In the first quarter of 2024, Kuaishou search's average monthly users increased by more than 15% year-over-year, and the number of daily searches peaked at nearly 800 million. In terms of search commercialization, revenue from search marketing services grew by over 50% year-over-year in the first quarter of 2024. Online marketing services In the first quarter of 2024, our revenue from online marketing services rose by 27.4% year-over-year to RMB16.7 billion, accounting for 56.6% of our total revenue. Through our robust efforts to promote the application of our smart marketing solution across various scenarios, the number of active marketing clients increased by almost 90% year-over-year in the first quarter of 2024. In the first quarter of 2024, by leveraging our AI and large language model capabilities, our smart marketing solution provided clients with end-to-end solutions to improve efficiency, covering smart creation, smart placement and smart user connection. For smart creation, our AIGC capabilities enabled the rapid generation of higher-quality creative content. In the first quarter of 2024, the peak daily spending from the clients with AIGC marketing materials exceeded RMB10 million. Regarding smart placement, our Universal Auto X (UAX) product and omni-platform marketing solution offer clients a range of automated placement functions, including bidding, real-time tracking and adjustment. In terms of smart user connection, our AI-driven customer service helps clients communicate with target users, significantly improving marketing conversion efficiency. In the first quarter of 2024, the steady growth of our e-commerce GMV continued to drive the revenue growth of enclosed loop marketing services, which outpaced the overall GMV growth. We further iterated our omni-platform marketing solution strategy and capabilities to help merchants explore our high-quality traffic and expand their GMV. With respect to smart hosting products, we tested and unveiled live-streaming hosting functions for major promotion scenarios, which improved clients' marketing performance and willingness to place ads. In the first quarter of 2024, merchants' total marketing spending through our omni-platform marketing solution or smart hosting products accounted for 30% of overall enclosed loop marketing spending. In the first quarter of 2024, the revenue of our external marketing services continued to maintain robust growth year-over-year, especially in industries like media information, gaming, and education. For paid short plays in the media information industry, the average daily marketing spending of paid short plays skyrocketed by more than four-fold year-over-year in the first quarter of 2024. This growth was fueled by our continuous optimization of our self-developed sales funnel conversion path and augmented supply and demand resulting from policy incentives. On the gaming front, in the first quarter of 2024, we validated the effectiveness of the In-Apps Ads (IAA) marketing model for Kuaishou's mini-program games, boosting the marketing spending of our gaming clients. Marketing spending in the education industry nearly doubled year-over-year in the first quarter of 2024. The increased spending was prompted by our ability to further tap into user demand, which drove an increased budget by marketing clients. Our smart placement product under external marketing services, UAX, provides customized full-lifecycle automated marketing solutions to clients in diverse industries, enhancing their marketing conversion efficiency. In the first quarter of 2024, total marketing spending through UAX more than quadrupled quarter-over-quarter. Regarding brand marketing services, we have established a rich brand marketing matrix and customized solutions for our clients. We leveraged our superior content, precise demographics coverage and efficient conversion to help clients achieve their marketing goals of improving brand awareness and sales conversion. As a result, we attracted budgets from a wider range of brand marketing clients. The number of brand marketing clients during the 2024 Chinese New Year soared by more than 120% year-over-year. The hit blockbusters from Kuaishou Astral Short Plays delivered highly effective exposure and targeted demographic reach for brands like Tmall.com and Honor Smartphones, among others. E-commerce In the first quarter of 2024, we enhanced buyer conversion efficiency through our refined operations, while further enriching our merchandise offerings and expanding e-commerce scenario. As a result, our e-commerce GMV grew by 28.2% year-over-year to RMB288.1 billion. On the user front, the e-commerce monthly active paying users increased by 22.4% year-over-year in the first quarter of 2024 to 126 million. This rise was primarily attributable to the continuous expansion of shopping scenarios, such as shelf-based and short video e-commerce, as well as the ongoing upgrade of marketing tools and features. We also reinforced policy guidance to ensure an improved end-to-end experience for consumers during and after sales. This included the implementation of policies such as "speedy refund" and "proactive service takeover by platform," significantly elevating the overall consumer experience. Notably, during the 2024 Chinese New Year Promotion, the number of paying users rose by over 60% compared with last year. On the supply side, the number of monthly active merchants grew by approximately 70% year-over-year in the first quarter of 2024, mainly due to the sustained activity level of newly on-boarded merchants. Through significant optimization and enhancement of our policies to attract merchants and augmented marketing capabilities, we have successfully engaged a diverse range of supplier types, spanning from brands and large merchants to small and medium-sized merchants. Consequently, the number of newly on-boarded monthly active merchants continued to grow year-over-year at a high speed in the first quarter of 2024. Particularly, for small and medium-sized merchants, we rolled out generous incentives for new merchants under the Gold Bound Policy (斗金政策). Meanwhile, we offered comprehensive support through various initiatives encompassing deposits, traffic generation, distribution and training to support merchants at their cold start stage. Together with the enhanced merchant incubation and education measures, merchants were being well prepared to scale up their business on our platform. We sustained strong growth among brand merchants in the first quarter of 2024. During the 2024 Chinese New Year Promotion, brand GMV rose by over 70% compared with last year. Brand merchants significantly increased their focus on both short video and shelf-based e-commerce realms. In the first quarter of 2024, brand GMV leaped by more than 110% in the short video realm and over 80% in the shelf-based realm, both on a year-over-year basis. Regarding KOL strategies, we encouraged new, small, and medium KOLs to collaborate with brands in live streaming through the Supernova Initiative (超新星計劃), while offering enhanced marketing tools for large-scale live streaming to assist leading KOLs in achieving breakthroughs. In terms of KOL distribution, we recommended high-quality merchandise toKOLs internally and helped small and medium KOLs select merchandise via external coordinators. This comprehensive approach strengthened our platform's matching capabilities while significantly increasing streamers' willingness to host live sessions and augmenting their contributions to monetization in short video content and other diverse e-commerce scenarios. In terms of e-commerce scenarios, we continued to register strong growth in shelf-based e-commerce. In the first quarter of 2024, shelf-based e-commerce GMV outgrew the overall platform, accounting for approximately 25% of total GMV. We achieved remarkable strides on both the supply and demand fronts, with more than 50% and 60% year-over-year increases in average daily active merchants and average daily paying users, respectively, in the first quarter of 2024. We also further enhanced the merchandise infrastructure, enriched merchandise offerings and improved the price management system. These measures enabled us to fulfill core user groups' needs in key categories such as fresh produce, food, personal care and daily necessities. Furthermore, the order volume of our shopping mall during the 2024 Chinese New Year Promotion soared by 98% compared with last year, with impressive performances across short video, search-induced and shelf-based e-commerce. GMV from short video-embedded shopping links, search-induced e-commerce and shelf-based e-commerce surged by 345%, 164% and 383%, respectively, compared with last year. These stellar performances demonstrated that our dual engine of content-based and shelf-based e-commerce is unlocking more new business opportunities for merchants. It's also noteworthy that our short video e-commerce GMV maintained its rapid growth in the first quarter of 2024, increasing by nearly 100% year-over-year. The short video e-commerce monthly and daily active paying users continued to rise, supported by consistently enriched content offerings. Live streaming In the first quarter of 2024, we continued our endeavor in building a healthy live-streaming ecosystem, laying a solid foundation for long-term sustainable growth. We offered strong support to mid-tier streamers, stimulated streamer activity and improved streamer quality through online training, offline lectures and streamer tasks, accelerating new streamers' growth and incentivizing talent agencies to drive their gross revenue. Meanwhile, we continued to promote emerging streaming features such as multi-host live streaming and "Grand Stage" while iterating product features and enriching our live streaming ecosystem. By the end of the first quarter of 2024, we had grown ...