36Kr Holdings Inc. Reports First Quarter 2023 Unaudited Financial Results

BEIJING, June 6, 2023 /PRNewswire/ -- 36Kr Holdings Inc. ("36Kr" or the "Company" or "We") (NASDAQ: KRKR), a prominent brand and a pioneering platform dedicated to serving New Economy participants in China, today announced its unaudited financial results for the first quarter ended March 31, 2023.

First Quarter 2023 Highlights

• Number of followers^[1] as of March 31, 2023 reached 29.3 million, an increase of 21.6% from 24.1 million as of March 31, 2022.
• Total revenues increased by 11.9% to RMB55.5 million (US$8.1 million) in the first quarter of 2023, from RMB49.6 million in the same period of 2022.
• Revenues from online advertising services increased by 11.4% to RMB41.9 million (US$6.1 million) in the first quarter of 2023, from RMB37.6 million in the same period of 2022.
• Revenues from enterprise value-added services increased by 7.3% to RMB10.0 million (US$1.5 million) in the first quarter of 2023, from RMB9.3 million in the same period of 2022.
• Revenues from subscription services increased by 35.7% to RMB3.6 million (US$0.5 million) in the first quarter of 2023, compared to RMB2.7 million in the same period of 2022.

Selected Operating Data

Mr. Dagang Feng, Co-chairman and CEO of 36Kr, commented, "We kicked off the year with stellar first quarter results as we returned to robust growth trajectory, delivering double-digit top-line growth year-over-year. The strong financial results speak to our high-quality content, compelling product offerings, and immense technological capabilities. Our user engagement metrics also continued to improve, with the number of our followers exceeding 29 million as of the end of first quarter of 2023, up 22% year-over-year. In addition, we continued to adopt cutting-edge technologies including generative AI across our content ecosystem and product matrix, facilitating higher efficiency in our operations. Particularly, our new application-level product, 36Kr Enterprise Service Review platform, achieved rapid growth across multiple operating metrics as we upgraded its various functionalities. Looking ahead, we will focus on core business development, amplifying our content advantages and driving product innovation as we seek to create greater growth potential and enterprise value."

Ms. Lin Wei, Chief Financial Officer of 36Kr, added, "We achieved upbeat financial results in the first quarter of 2023, with total revenues reaching RMB55.5 million, an increase of 12% from a year ago and all three major business segments realizing year-over-year growth. Notably, our advertising revenue grew strongly by 11% year-over-year to RMB41.9 million, underscoring the increasing customer recognition of our content strength and proactive marketing solutions. As the pandemic receded, our enterprise value-added services and subscription services also recorded solid revenue growth of 7% and 36% year-over-year, respectively, as we continued to optimize our product and service offerings. Moving forward through 2023, we will continue to cultivate our unique New Economy service platform, capturing new opportunities arising from AI technology development and applications, to drive sustainable long-term growth."

First Quarter 2023 Financial Results

Total revenues increased by 11.9% to RMB55.5 million (US$8.1 million) in the first quarter of 2023, from RMB49.6 million in the same period of 2022.

• Online advertising services revenues increased by 11.4% to RMB41.9 million (US$6.1 million) in the first quarter of 2023, from RMB37.6 million in the same period of 2022. The increase was primarily attributable to more innovative marketing solutions as well as the gradual recovery of market demand in the first quarter of 2023.
• Enterprise value-added services revenues increased by 7.3% to RMB10.0 million (US$1.5 million) in the first quarter of 2023, as we continuously developed various proactive enterprise-level services for our customers.
• Subscription services revenues increased by 35.7% to RMB3.6 million (US$0.5 million) in the first quarter of 2023, compared to RMB2.7 million in the same period of 2022. The increase was primarily attributable to our continuous efforts to offer high-quality subscription products to our subscribers.

Cost of revenues was RMB32.4 million (US$4.7 million) in the first quarter of 2023, compared to RMB23.9 million in the same period of 2022. The increase was primarily attributable to higher fulfillment costs and content costs.

Gross profit was RMB23.1 million (US$3.4 million) in the first quarter of 2023, compared to RMB25.7 million in the same period of 2022. Gross profit margin was 41.6% in the first quarter of 2023, compared to 51.8% in the same period of 2022.

Operating expenses were RMB63.6 million (US$9.3 million) in the first quarter of 2023, compared to RMB33.4 million in the same period of 2022.

• Sales and marketing expenses were RMB31.0 million (US$4.5 million) in the first quarter of 2023, an increase of 4.4% from RMB29.7 million in the same period of 2022. The increase was primarily attributable to the increase in payroll-related expenses, partially offset by the decrease in marketing related expenses.
• General and administrative expenses were RMB17.2 million (US$2.5 million) in the first quarter of 2023, compared to RMB (10.0) million in the same period of 2022. The fluctuation was primarily attributable to the release of the allowance for credit losses of RMB32.9 million in the same period of 2022 which was mainly due to the cash collection from account receivables fully impaired in previous year, partially offset by the decrease in payroll-related expenses and share-based compensation expenses.
• Research and development expenses were RMB15.5 million (US$2.3 million) in the first quarter of 2023, an increase of 12.3% from RMB13.8 million in the same period of 2022. The increase was primarily attributable to the increase in payroll-related expenses.

Share-based compensation expenses recognized in cost of revenues, sales and marketing expenses, research and development expenses, as well as general and administrative expenses totaled RMB1.9 million (US$0.3 million) in the first quarter of 2023, compared to RMB4.1 million in the same period of 2022. 

Other income was RMB1.2 million (US$0.2 million) in the first quarter of 2023, compared to RMB40.3 million in the same period of 2022. The decrease was primarily attributable to the Company recognized approximately RMB 38.0 million of gain arising from a disposal of a subsidiary in the first quarter of 2022.

Income tax credit was RMB0.24 million (US$0.03 million) in the first quarter of 2023, compared to RMB0.01 million in the same period of 2022.

Net loss was RMB39.0 million (US$5.7 million) in the first quarter of 2023, compared to net income of RMB32.6 million in the same period of 2022. Non-GAAP adjusted net loss^[6] was RMB37.1 million (US$5.4 million) in the first quarter of 2023, compared to non-GAAP adjusted net income of RMB36.7 million in the same period of 2022.

Net loss attributable to 36Kr Holdings Inc.'s ordinary shareholders was RMB38.4 million (US$5.6 million) in the first quarter of 2023, compared to net income attributable to 36Kr Holdings Inc.'s ordinary shareholders of RMB33.0 million in the same period of 2022.

Basic and diluted net loss per ADS was both RMB0.923 (US$0.134) in the first quarter of 2023, compared to basic and diluted net income per ADS of RMB0.802 in the same period of 2022.

Certain Balance Sheet Items

As of March 31, 2023, the Company had cash, cash equivalents, restricted cash and short-term investments of RMB169.8 million (US$24.7 million), compared to RMB184.9 million as of December 31, 2022. The decrease was mainly attributable to payment of year-end employee bonus and benefits, as well as small-sized long-term investment in a New-Economy start-up company in the first quarter of 2023.