36Kr Holdings Inc. Q2 FY2023 earnings call

1. Content ecosystem development: Continued to explore new growth areas, with over 30 million followers as of the end of the second quarter, up 21% year-over-year. Launched vertical media like Waves and Emergency of Intelligence. Optimized content of products like Super Review and Youth White Paper. Enriched media formats with live broadcasts and audio offerings. Accelerated optimization of short video content matrix, with over 8.3 million short video followers, up 42% year-over-year. 2. AI applications: Actively integrated AI technology into operations, such as copywriting, translation, image generation, and intelligent customer service. First live-streaming sales session hosted by digital humans in AI e-commerce store was a success. Entered strategic cooperation with Baidu to broaden AI applications. 3. Commercialization progress: Advertising revenue flat year-over-year but ARPU increased to RMB310,000, up 14% year-over-year. Enterprise value-added services revenue up 17% with increased event scale. Subscription services revenue up 11% with new training programs like cooperation with University of Oxford. 4. 36Kr Enterprise Services Review Platform: Cumulative number of reviews increased 99% year-over-year, products on platform up 40% year-over-year, merchants up 43% year-over-year.

In the second quarter of 2023, 36Kr Holdings Inc.'s total revenue was RMB84.36 million, up 3% year-over-year. Enterprise value-added services revenue reached RMB16.8 million, an increase of 17% year-over-year. Subscription services revenue was RMB10.6 million, up 11% year-over-year. Advertising revenue was RMB57 million, basically flat with the same period last year.

1. Expect advertising revenue to return to upward trend and achieve year-over-year growth in the next two quarters of 2023. 2. Anticipate gross profit margin to maintain at a high level of 55% or even between 55% to 60% as advertising, enterprise value-added services, etc., continue to grow.

1. Forward-looking statements involve inherent risks and uncertainties, and the company's results may be materially different from views expressed today. 2. Further information regarding risks and uncertainties is included in the company's prospectus and other public filings with the U.S. SEC, and the company does not assume obligation to update forward-looking statements except as required by law.

Q: How is the advertising market and the company's business recover in the third quarter? And what is the outlook for the recovery trend afterwards?

A: Lin Wei said as the market recovers, demand for advertising gradually increases. Although macro economy is in early stage of recovery, advertising will go back to upward trend and achieve year-over-year growth in next two quarters of 2023.

Q: As offline activities return to normal, what are the company's plans of upgrades to offline activities?

A: Dagang Feng said designed and launched various offline events, like All-New Summit WISE and 2C lifestyle festival CityLab, and 36Kr Business School programs are in full swing with new courses.

Q: Could you give us more color about more relevant plan about your AI internal use product offering and cooperation with the AI enterprise?

A: Dagang Feng said have consistent understanding of generative AI technology, integrated AI into day-to-day operations, entered strategic cooperation with Baidu to broaden AI applications.

Q: The short video business has been doing really well and what's our plan to further tap into this growth potential?

A: Dagang Feng said will continue to launch diversified content offerings, expand 2C products, focus on multichannel content distribution, and signed additional customers from various industries with revenue doubling year-over-year.

Q: How did the company achieve a rebound in gross profit margin this quarter?

A: Lin Wei said rebound mainly attributable to seasonality, economy of scale, and new content initiatives like Broadcasting Foreseeing 2033 which was well-received and contributed to gross profit margin growth.