Caixin
Aug 24, 2022 08:54 PM
TECH

Narrower Second-Quarter Losses Fail to Cheer Kuaishou Investors

Kuaishou generated the bulk of its revenue in the three months from online marketing services and livestreaming. Photo: VCG
Kuaishou generated the bulk of its revenue in the three months from online marketing services and livestreaming. Photo: VCG

Kuaishou Technology Co. Ltd. reported shrinking losses and growing revenue in the second quarter, as the Hong Kong-listed company cut back spending on marketing and research and development.

But the results failed to cheer investors, with Kuaishou’s stock price dropping 8.12% on Wednesday, closing at HK$69.00 ($8.80).

In the three months through June, the Beijing-based short-video platform narrowed its adjusted net loss by 73.8% year-on-year to 1.3 billion yuan ($192.8 million) while revenue jumped 13.4% to 21.7 billion yuan, according to its earnings report released on Tuesday.

The company slashed marketing and R&D expenses 22.2% and 16.1% year-on-year to 8.8 billion yuan and 3.3 billion yuan, respectively.

Despite the lower marketing spend, Kuaishou was able to grow its monthly active users 15.9% from the same period of 2021 and daily active users by 18.5% year-on-year to 586.7 million and 347.3 million, respectively. Average daily time spend per user climbed 17.1% to 125.2 minutes.

About half of the total quarterly revenue came from sales of its online marketing services, which reached 11 billion yuan, up 10.5% year-on-year. Revenue from livestreaming hit 8.6 billion yuan, up 19%, while other services, such as e-commerce, increased 7.1% to 2.1 billion yuan.

Kuaishou has been hunting for more sources of income in its quest to become profitable. The company’s latest endeavor, launched in August, is called StreamLake, an enterprise-facing video cloud brand designed to provide services including livestreaming, on-demand broadcasting, artificial intelligence-powered content viewing, special effects integration and virtual idols.

But regulatory tightening has created a headache for one of its mainstay businesses. In May, China’s regulators issued new rules prohibiting online platforms from offering minors access to functions which would induce them to send money to livestreamers, a move that could deal a blow to Kuaishou and its peers, which get a cut from such payments.

Contact reporter Ding Yi (yiding@caixin.com) and editor Jonathan Breen (jonathanbreen@caixin.com)

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