36Kr Holdings Inc. Q4 FY2024 earnings call

• Operating efficiency improved in 2024: Operating expenses in the second half of 2024 decreased by 50% vs 2023, and operating expenses as a percentage of total revenue decreased by 17% in the second half of 2024 vs 2023. - Content ecosystem: Created high-quality content on multiple fronts, broadened content specific accounts, expanded content dissemination across diverse channels. Had over 35.9 million followers by end of 2024. - Enterprise value added services: Launched major events like AI partner summit and wise conference, achieved success with these events. - Global expansion: Established presence in Japan, Southeast Asia, etc., launched 36 Kr Europe Central Station, initiated Beijing International Chamber of Commerce global expansion Service Committee. - AI initiatives: Launched AI-powered tools like AI text to image, AI meeting coverage, 36 Kr corporate Omni intelligence, integrated AI into content production and various business scenarios.

In the second half of 2024, total revenue was 128.7 million RMB. Online advertising services revenue was 100.2 million RMB; enterprise value added services revenue was 19.4 million RMB; subscription services revenue was 9 million RMB; cost of revenue was 61.8 million RMB. Gross profit was 66.9 million RMB, with a gross margin of 52%. Operating expenses were 73.1 million RMB, a 50% decrease year-over-year. For the full year 2024, total revenue was 231.1 million RMB. Online advertising services revenue was 180.6 million RMB; enterprise value added services revenue was 32.8 million RMB; subscription services revenue was 17.6 million RMB; cost of revenue was 180.7 million RMB. Gross profit was 112.3 million RMB, with a gross margin of 48.6%. Operating expenses were 119.1 million RMB, a 31.2% decrease year-over-year.

• In 2025, will continue to refine products, customer base, and organizational structure to enhance profitability. - Plan to carry on legacy IP events like wise conference and industry-specific forums. - Expand global expansion initiatives within enterprise value added services, continue to serve Chinese businesses in international ventures.

• Macroeconomic uncertainties affecting enterprise value added services due to impact on small and medium enterprises and government institutions. - Reduction in advertising spending by certain industries leading to slight decline in advertising revenue. - Potential challenges in global expansion and integrating new initiatives.

Q: The company's overall advertising revenue declined this year. Was the company's outlook for its advertising business moving forward?

A: In 2024, proactively optimized advertising products and customer base, maintained strong partnerships with key accounts, attracted premium customers, cautiously optimistic about 2025 growth despite microeconomic headwinds.

Q: Throughout 2024 what progress has a company made in reducing costs, in improving efficiency?

A: Rigorous cost control and structure optimization led to gross margin over 50% in second half 2024. Implemented cost-cutting and efficiency enhancement initiatives like relocating offices, streamlining teams, integrating AI, resulting in 50% decrease in operating expenses in second half 2024 vs 2023.

Q: What led the decline in the full year revenue from enterprise value added services. Can you share the outlook for this huge revenue from enterprise value added services?

A: Decline due to impact of macroeconomic dynamics on small and medium enterprises and government institutions, and strategic restructuring of regional outlets and service offerings. Outlook for 2025 includes carrying on legacy IP events and expanding global expansion initiatives within enterprise value added services.

Q: How does the company position itself in generative AI, across content in the product offerings?

A: Had exclusive interviews with DeepSeek founder, first in industry to report on key AI developments. Launched AI-powered products in 2024, integrated AI into content production, will continue to develop AI content ecosystem and integrate AI GC technology with content production in 2025.